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CNN CAPITAL GANG

Congress Holds Hearings on Steroid use in Major League Baseball; Polls Show Approval of President's Social Security Plan Falling; Senate Votes To Open the ANWR

Aired March 19, 2005 - 19:00   ET

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


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

A marathon day-long hearing on steroids in baseball began with testimony by a Hall of Fame pitcher who is now a senator.

(BEGIN VIDEO CLIP)

SEN. JIM BUNNING (R), KENTUCKY: What's happening in baseball now is not natural, and it isn't right. Baseball has to get its act together, or else.

(END VIDEO CLIP)

HUNT: One current baseball player denied use of steroids, but a former home-run-hitting champion refused to answer that question.

(BEGIN VIDEO CLIP)

RAFAEL PALMEIRO, MAJOR LEAGUE BASEBALL PLAYER: I have never used steroids, period. I do not know how to say it any more clearly than that -- never.

MARK MCGWIRE, FORMER MAJOR LEAGUE BASEBALL PLAYER: Asking me or any other player to answer questions about who took steroids in front of television cameras will not solve the problem. My lawyers have advised me that I cannot answer these questions without jeopardizing my friends, my family and myself.

(END VIDEO CLIP)

HUNT: The commissioner of major league baseball concluded the hearing with this declaration.

(BEGIN VIDEO CLIP)

BUD SELIG, MLB COMMISSIONER: The only way to finally get to the root problem here and solve it is through the toughest kind of testing program...

(END VIDEO CLIP)

HUNT: Bob, dramatic hearing. What did it accomplish?

BOB NOVAK, CAPITAL GANG: Well, I think it got this -- Tom Davis's committee, which had disappeared for several years, back on television. It was -- provided some -- there was not many crimes this week, so it helped cable television to fill out.

But seriously, I don't think it accomplished anything. The -- if -- everybody looked various degrees of bad -- Bud Selig always looks bad. But Mark McGwire, who is a nice man and a -- I enjoyed him as a player -- I think he looked terrible. He took, in effect, the 5th Amendment. The lawyers said that would help him. It didn't help him, it hurt him.

HUNT: Now, the all-time home run champ supposedly really did take it on the chin. Margaret?

MARGARET CARLSON, CAPITAL GANG: I haven't seen the Congress so united, Democrats and Republicans, since 9/11. I also haven't heard so many baseball metaphors and analogies badly used since I got a ride home with Bob Novak.

(LAUGHTER)

CARLSON: It isn't -- you know, Mark McGwire took a variation of the 5th by saying, I'm not here to talk about the future -- the past, I'm -- you know? Well, that's the only thing you're here for. And for those of us who don't follow it as closely as some other people on this panel, it makes me glad not to be invested in baseball because there you have -- these records don't even mean anything because what these guys were doing to get those -- those home runs was not what Babe Ruth and Roger Maris and Ted Williams were doing.

HUNT: Stop while you're ahead, Margaret. Mark?

MARK SHIELDS, CAPITAL GANG: Al, I say kudos to Henry Waxman, the ranking Democrat, and Tom Davis, the chairman of the committee, for holding this. Baseball had an approach to drugs. Twenty years ago, Peter Ueberroth, the commissioner of baseball, said there's a dark cloud over baseball that's drugs, and it's been with us ever since. And baseball is a game, Al, that does exist -- Margaret's absolutely right -- by records, from grandparent to grandchild. We went from 1927 to 1961 from 60 home runs of Babe Ruth all the way to Roger Maris. And I mean, let's be honest about it. These guys are freaks. They're physical freaks.

And they've -- what Jim Bunning, the Republican senator from Kentucky, said in his opening statement, is absolutely right. He said, When I played with Ted Williams and Henry Aaron and Willie Mays, they didn't get 40 pounds heavier in their 30s and they didn't hit more home runs. They defied age and they defied logic. And these records ought to all be thrown out.

HUNT: Kate?

KATE O'BEIRNE, CAPITAL GANG: I think it's certainly true that baseball has been too weak for too long about addressing this problem. I think the players union is clearly too powerful. I think I could second everything Mark Shields just said about it and still not see a congressional responsibility and still fully appreciate that Congress itself is late to the game. They have no authority over the issue anyway. They're not even thinking of legislating. They wanted TV cameras. They got TV cameras, so I suppose the hearings were successful.

They -- I have not seen such perfect attendance at a congressional hearing...

HUNT: Yes, you're right.

O'BEIRNE: ... ever.

CARLSON: Yes.

O'BEIRNE: They didn't even take a 7th-inning stretch -- there I go, Margaret -- for fear of missing camera time. They were purely grandstanding.

NOVAK: Kate -- Kate is...

(CROSSTALK)

HUNT: No, no. I want in here because I couldn't disagree with you more. It is called the national pastime.

SHIELDS: That's right.

HUNT: If Congress does not have a right to look at something that is -- that is marring the national pastime, I don't know what they do have a right to look at. It could have been done in a really irresponsible, demagogic way. I think -- I think Mark's right that -- that Tom Davis and Henry Waxman did not do that.

And moreover, Bob, it did accomplish something because major league baseball was not only stonewalling, they were deceiving. They had put out something that was totally untrue, and this hearing put them on record that you can't get away with that anymore. It's going to change major league baseball's response.

NOVAK: I couldn't disagree with you more. I agree completely with Kate. I don't think anything that Mark said, which is quite correct, we didn't know before this hearing. And you know, it used to be that liberals like you used to say, Well, why are we investigating the communists because we're not going to legislate anything? Well, they're not going to legislate anything on this. It's just -- it was a -- it was a grandstand show. And I wish Tom Davis, who I like, would -- would do some of the things that his -- that Dan Burton used to do and go into the situation in Colombia and -- and the drug running by Castro...

(CROSSTALK)

HUNT: That's just what we need, Tom Davis to be more like Danny Burton! CARLSON: It's so hard -- it's hard to -- it's so hard to shame people that we've all known about this steroid thing for so long, but baseball has been immune to people leaving stadiums because...

O'BEIRNE: Mark, it's not...

CARLSON: ... they know...

O'BEIRNE: ... Congress's job to shame people! And whenever they go beyond their -- their enumerated powers, it's always on behalf of the children, on behalf of the children. Yet again, they're saying on behalf of the kids, like children race home from school to watch a congressional hearing to see what congressmen are saying about steroids?

NOVAK: Without being...

SHIELDS: Well...

NOVAK: Without being nasty, you indicted you didn't need baseball. Baseball doesn't need you and...

CARLSON: I used to love baseball when I was growing up...

HUNT: Mark -- Mark...

CARLSON: ... but it's been corrupted!

SHIELDS: Baseball's approach, including the commissioner and the union, was just exactly like Enron's: We're investigating ourselves. Well, baloney. Congress does give them an anti-trust exemption, and that's -- that's what sustains baseball and allows it to operate as a monopoly. And if they just start getting serious about that, then baseball will comply.

HUNT: Some sports writers love to take shots at this. They don't understand it. Tom Boswell, the greatest baseball writer in America, "The Washington Post" -- everyone ought to read his Friday column. He understood what an incredibly valuable and what an incredibly sad day this was.

When THE GANG returns: Is the fix in against the president's Social Security plan?

(COMMERCIAL BREAK)

HUNT: Welcome back. Polls show declining support for President Bush's Social Security revision. The ABC/"Washington Post" poll shows 37 percent support the plan, while 55 percent oppose.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: It's important for the American people to understand that I believe the Social Security system has worked well, that Franklin Roosevelt did a positive thing when he created the Social Security system, but that I am deeply concerned about the Social Security system for younger -- younger Americans.

(END VIDEO CLIP)

HUNT: Some Democrats rule out any compromise.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Why should we put a plan out? We will go -- our plan is to stop him from -- stop him! He must be stopped. He must not be allowed to go forward with these private accounts.

(END VIDEO CLIP)

HUNT: Mark, can the Democrats take a victory lap on Social Security?

SHIELDS: Al, it would not only be premature, it would be unseemly for the Democrats. But it was great to hear President Bush praising President Roosevelt. I mean, I hadn't heard him do that recently.

Democrats shouldn't take a victory lap, but Al, the Republicans are the story. I mean, they're tucking their tails. No more town meetings. You know, I think the Republicans could take a page out of the book of Rick Santorum, the Republican senator from Pennsylvania, who went back to his state, took on the town meetings, opened them up, met the criticism. But they all want to have these friendly little groups with no tough questions, starting with the president, so they've called off all town meetings. That's all you need to know where the status of Social Security is politically.

HUNT: Kate, six weeks ago, the president...

O'BEIRNE: I'm...

HUNT: ... unveiled it. It's been heading south since then, hasn't it?

O'BEIRNE: The president hasn't unveiled anything, Al! There is no plan! I think it sounds so desperate for Nancy Pelosi -- Stop him, stop him, stop this man before he wins again, is what she's saying, of course. When you talk to people in the administration, they are perfectly comfortable with where they are. They wanted the predicate for any reform, for any kind of bipartisan get-togethers to talk about solutions is, Is there a problem? They like where the polls are with respect to the public, majority of the public now recognizing something has to be done. The program has real trouble. They like where they are.

HUNT: Margaret, they're in good shape.

CARLSON: The president's major mistake was going out with personal accounts and the Democrats being very effective, showing how personal accounts had absolutely nothing to do to solve the solvency of Social Security. But as for a plan, Kate, you can't say this is the most urgent thing in America, but I don't have a plan. You go first. That's...

(CROSSTALK)

O'BEIRNE: Let's work together, is what he's saying!

CARLSON: No, he's saying, You go first. And you know, there's no Colin Powell to come along and save this, as he saved going into Iraq and going before the -- you know, the U.N. So Bush now has most of the people on his own team saying, Oh, no, no. No more town meetings for me. And he's going to Florida this week -- this weekend, and I think there's -- it's going to be a closed meeting there on Social Security.

HUNT: Bob, for Bush to succeed in this or have something he calls success, does he have to get something on -- on personal accounts?

NOVAK: To have any success, of course, he does. If he just has a changing of the index, which is a reduction in benefits, that's not going to do it. And he's not going to go for a tax increase.

I agree with Mark, which I rarely do, that the Republicans look like chickens. They look like they're afraid of combat. But I think the Democrats really look bad because I -- I was talking to some very prominent ones, and I didn't realize that not only is personal accounts off the table, any indexing of -- of the -- of how many -- how the benefits will be is off the table. They are saying, We will not go along with any reduction in benefits to our constituents in the future! I mean, they're being very responsible, and -- and...

HUNT: You meant to say irresponsible, I think.

NOVAK: Irresponsible. And Nancy Pelosi...

(CROSSTALK)

NOVAK: Nancy Pelosi, I thought, just typifies exactly what's going on when she says, Stop him, stop him, stop him.

CARLSON: I agree with Bob, in that Democrats have to pivot now and acknowledge, yes, there's a problem, and put forward a proposal for fixing...

O'BEIRNE: And when that happens...

CARLSON: ... Social Security...

O'BEIRNE: ... the Republicans are confident that personal accounts, plus some other things which do affect solvency, will look a lot better than what liberal Democrats are likely to come up, which happens to be tax increases!

CARLSON: Kate, not only would personal...

HUNT: Mark -- Mark -- hurt Social Security, they're going to hurt the economy. HUNT: Mark, the problem is that people say the concept of personal or private accounts is not such a bad concept, but the minute you say it has to be accompanied by benefit cuts, that's when...

SHIELDS: And tax increases.

HUNT: ... it plummets.

SHIELDS: No, that's absolutely...

CARLSON: And all that borrowing.

SHIELDS: That's absolutely right, Al. And the reality is that the president said there was a crisis. The president said, I have a plan. He said that in the 2000 campaign, said it in 2004 campaign. We just haven't seen the plan unveiled.

O'BEIRNE: Oh!

SHIELDS: And I would -- I would point out if the people in the White House feel so good about the polls, thank goodness they haven't seen the CNN/"USA Today" Gallup poll, which shows 35 percent approval for the president's handling of the Social Security issue.

O'BEIRNE: And it shows 76 percent of people under age 50 like the idea of the personal accounts, and people above that age won't be affected by them!

NOVAK: Let me just say that the idea that you have the benefit cuts, Mark, because you have personal accounts is ridiculous. It's absolutely ridiculous. You're going to have to have benefit cuts. Pat Moynihan said you had to have benefit cuts. Everybody knows it, and the demagogueing that's going on -- I was -- I was talking with two members of the Social Security subcommittee of the Ways and Means Committee. They say, We will not have any benefit cuts for our constituents. They're crazy! They're going to have to have them!

HUNT: You know, Bob, you're right on that. I think there are going to have to be benefit cuts, but I also think that if you move to some -- (UNINTELLIGIBLE) some kind of indexing, you can do it in a very progressive way.

NOVAK: I agree with that!

HUNT: And I think that's what...

NOVAK: But it's still -- they say they -- they want no benefit cuts!

CARLSON: Do you think borrowing a trillion dollars...

SHIELDS: Did the president...

(CROSSTALK)

CARLSON: ... personal accounts is a good idea? (CROSSTALK)

SHIELDS: ... any of his three dozen appearances when he mentioned it, ever mentioned benefit cuts? He never did.

NOVAK: But he told...

SHIELDS: He never did! No, Bob, but I mean, seriously, he never has.

HUNT: Kate, they at some point...

NOVAK: Do you think -- you think you can get by in this -- with this system without benefit cuts?

SHIELDS: I think -- I think you have to have benefit cuts. I'd like to see you struck from the Social Security rolls, and people of your ilk.

NOVAK: I'd like to see you struck, too!

(LAUGHTER)

HUNT: Would you? Well, we'll have a compromise here. We'll strike...

(CROSSTALK)

HUNT: Kate -- Kate, just finally, just -- we only have about 20 seconds...

NOVAK: Do you get Social Security?

HUNT: At some point, an administration usually takes the initiative on a proposal, and then Congress decides (UNINTELLIGIBLE) They have to come up with an actual proposal, don't they, soon?

O'BEIRNE: No! I think they're going to -- no, I think they're going to watch. I think you can watch Bill Thomas in the House -- and we already are seeing proposals coming up in the Senate, and I think the White House is going to work with everybody who's willing to work constructively!

HUNT: Kate has the last constructive word.

Next on CAPITAL GANG: To drill or not to drill. Alaska's oil could be gushing.

(COMMERCIAL BREAK)

HUNT: Welcome back.

Republican senator Ted Stevens of Alaska succeeded in getting a majority vote, 51 to 49, for oil drilling in the Arctic National Wildlife Refuge by attaching it to the budget resolution.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: We should not take the energy policy of the United States and dump it into a tiny debate onto the budget for a back-door effort to find 50 votes. This is an abuse of power. Once again, special interest effort is defeating the desires of the American people to preserve wilderness.

SEN. TED STEVENS (R), ALASKA: I want to tell my friend, the former presidential candidate, Mr. Kerry, that I take umbrage at his comment that I am guilty of unethical conduct because I'm supporting the budget resolution reported by the Budget Committee! Maybe Senator Kerry would like to come explain why he has singled me out for unethical conduct!

(END VIDEO CLIP)

HUNT: The budget resolution itself passed 51 to 49 in the wee hours of Friday morning.

Margaret, have the environmentalists lost the battle of ANWR.

CARLSON: Uh-huh.

HUNT: Well, we can move on to the next topic.

CARLSON: Yes.

(CROSSTALK)

CARLSON: Bob, I yield my time! You know, the Congress had two pieces of our national heritage before them, steroid use in baseball and ANWR, and they decided to emphasize baseball this week, which, by the way, they can't really regulate.

Here's the -- here's the thing about ANWR. It's not that it's so bad for the caribou, it's not that helpful to our energy needs. You know, we could each -- each American could go home and change a 100- watt bulb for a 40-watt bulb, and we'd get just as much energy as we're going to get from drilling in ANWR.

HUNT: And Bob, you could ride public transportation.

NOVAK: That'll be the day. I -- I would -- the bill that passed, the Senate bill, is a terrible budget resolution. They -- a bipartisan liberal coalition voted down the very necessary cuts in Medicaid that were necessary to start getting cuts in entitlements, and it's a lousy bill. And the question -- the question is, is it worth passing even with ANWR? People ask me -- people are asking themselves that. If it's improved in conference, will the -- will the Senate even pass a good -- a good bill? So I think it's premature to say because they won this 50-to-49 vote, they -- it is attached to the budget resolution. There hasn't been a budget resolution in what, since -- in three years.

HUNT: Right.

NOVAK: And there may not be one this year.

HUNT: Mark?

SHIELDS: Al, you're in a terrible situation if you're a House Republican. You're about to add $2 trillion to the national debt over the next five years, by the budget resolution that they're -- that they've approved. So what you've got to do is you've got to have some kind of a sweetener, and that's what ANWR is. ANWR is a sweetener.

Now, having said something good about Jim Bunning earlier -- Jim Bunning did his party a terrible disservice yesterday by putting in an amendment on the budget bill that would exempt from any responsibility for paying income taxes for the richest one quarter of Americans on Social Security. I mean, it just makes no sense. It's going to cost $64 billion. And it just got the budget further out of whack, and it's the kind of thing Republicans don't want to have, those two issues joined, deficit here and know that 48 percent of that deficit was caused by George Bush's tax cuts.

HUNT: It's a free-lunch budget, isn't it, Kate? I mean, lots of tax cuts, lots of -- you don't really cut back on spending.

O'BEIRNE: Silly me. I thought we were talking about ANWR.

HUNT: OK. Go ahead. You talk about ANWR.

O'BEIRNE: The people who live the closest to this pristine -- this pristine area are most in favor of drilling. It'll really benefit them economically, and they could sure use it. And look, elections matter. Republicans have now passed tort reform. Republicans have passed bankruptcy reform. And after 10 years, they finally -- I don't know if it'll last, hopefully, it will -- are permitting drilling in ANWR. A majority of the House and Senate appreciate it could be done in an environmentally safe way. And all the hysterical claims to the contrary are good for fund-raising letters, but they shouldn't control our energy policy.

HUNT: Does this suggest that other environmental measures are in trouble or other anti-environmental measures...

CARLSON: Well...

HUNT: ... are going to...

CARLSON: You know, at one point, I thought that the environmentalists could have begun to compromise on ANWR in exchange for getting something on global warming, which everybody but this country now agrees is a terrible problem.

Kate, you know, the president in 2000 was an environmental president. He stressed the environment. He's completely...

(CROSSTALK)

CARLSON: ... on Clean Skies Initiative in so many ways. He hasn't cared one whit about the environment. And you know, there he was in the election, against nation building, for the environment, complete bait and switch.

HUNT: Bob, you're not an environmentalist, are you?

NOVAK: I certainly like the environment. I've never been against it.

(CROSSTALK)

NOVAK: This -- this little -- little area of the huge ANWR, Arctic wildlife refuge -- it's just such a small little part, it's the garden clubs that -- that dictate the policy. But we've -- we've debated this many times. I think we know where we all stand for. The interesting thing to me is that -- how -- whether this is just a sham, putting it in this Senate bill, because one thing that the Congress has shown -- it does not want to cut spending. It does not want to cut -- if -- there's not a clear majority in the Senate for finally getting entitlements under control.

HUNT: You would agree with that, given...

SHIELDS: I would. I would say also I've never thought of Bob as a birds and bunnies kind of guy, but...

O'BEIRNE: Well, bulls and bears...

(CROSSTALK)

HUNT: ... caribou kind of guy. He's a secret caribou fan. And on that -- coming up next in the second half of THE CAPITAL GANG: Is Paul Wolfowitz a wise choice to head the World Bank? We'll go "Beyond the Beltway" to look at China's latest threat to Taiwan, and our "Outrages of the Week" all after the break.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

(NEWSBREAK)

HUNT: Welcome back to the second half of CAPITAL GANG.

President Bush selected Deputy Secretary of Defense Paul Wolfowitz to be president of the World Bank.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He is a man of good experiences. He helped manage a large organization. He's a skilled diplomat. And, Paul is committed to development. He's a compassionate, decent man who will do a fine job in the World Bank.

REP. NANCY PELOSI (D), MINORITY LEADER: The president's selection of Mr. Wolfowitz to head the World Bank is hard to understand. As one who served as the ranking Democrat on foreign operations for years and worked closely with the World Bank, I don't see a match in commitment to the vision of the World Bank. (END VIDEO CLIP)

HUNT: However, Democratic Senators praised the selection. Joe Biden of Delaware said, "Paul is a brilliant guy and a serious person." Patrick Leahy of Vermont said, "I know him to be an extraordinarily intelligent, creative thinker."

The selection does not require Senate confirmation but approval by other World Bank members is needed.

Kate, is a hard line military hawk a good choice to head the World Bank?

O'BEIRNE: Al, I think choosing Paul Wolfowitz is an inspired choice. As the Democratic Senators expressed, I think, everybody's opinion about Paul Wolfowitz. He's a brilliant man. He has long been committed and interested in development issues. He's experienced in managing, which is essentially his job at the Pentagon, large organizations.

Despite Nancy no, I think he's going to be approved and really I think shows the president's intent by sending people like John Bolton to the U.N. and Paul Wolfowitz to the World Bank. He is not giving up on these big, international organizations. He's going to send challenging people and see if they can be made to work.

HUNT: Mark.

SHIELDS: Al, Paul Wolfowitz is smart. He could ace the SATs. He's been wrong on every important question of this administration. He was wrong about Iraq and the number of troops that were required, with a disdain for General Shinseki on the number of troops required.

He excluded the State Department in the post-Iraqi consideration. He said, Al that it would pay for it with its own oil revenues. It's going to cost us somewhere in the neighborhood of $300 billion.

I mean at every possible -- we're going to be welcomed as liberators. We had 14 attacks per day a year ago on American troops in Iraq. Today we have 70 attacks. We've gone from 38 nations in the coalition down to 14.

I mean, Al, this man has been wrong on every important question in this administration where he's made policy that effect American lives and other lives.

HUNT: Bob.

NOVAK: Well, Mark has him responsible for all the mistakes. I think he's also responsible for gingivitis. I think all these things are...

SHIELDS: No, he isn't.

NOVAK: ...have been laid at the door of Paul Wolfowitz. I agree with Kate. I think two things that have made me happy in the last month are John Bolton and Paul Wolfowitz.

Wolfowitz is a brilliant guy. And I'll tell you something else. They need somebody at the World Bank, the first person at the World Bank that's going to take a look at that organization, which is not good. It has been bad for development around the world. It has had bad projects and I think he is an independent enough person to go into that.

And, Mark, I'll tell you something else that you ought to appreciate. He is a guy who has devoted his whole life to public service. He is really -- he has not made money. He has been a selfless person and I just think it's a fabulous appointment and I'm glad that Pat Leahy and Joe Biden agree with me.

HUNT: Margaret.

CARLSON: Bob, since when do you like selfless people who haven't made money and devoted themselves to public service.

HUNT: That's the headline.

CARLSON: Yes. Listen, I agree with Kate and Bob in part. Pre- Bush administration or pre-Iraq, Paul Wolfowitz was a good guy, very smart, very public service oriented, not a mogul, but he lost his way when he came into the Bush administration and there's nothing that recommends him for the bank management.

He was in charge of managing post-war Iraq and he missed by a factor of say $1 billion how much it was going to cost to reconstruct Iraq, which hasn't gone very well and in a host of things that Mark put up.

NOVAK: Including gingivitis.

HUNT: Let me just say I agree with Margaret and Mark on the abysmal post-Iraq record of Paul Wolfowitz and the treatment of General Shinseki.

But I will tell you this. Unlike John Bolton, I think this is going to turn out to be a good appointment because I think the most interesting thing about Paul Wolfowitz' background is not at the Pentagon but as ambassador to Indonesia where he was a good ambassador. He had a real, I think, empathy for the poor people of that country and I think he's going to take...

NOVAK: Can I ask you a question?

HUNT: And I think he's going to take development seriously.

NOVAK: Can I ask you a question?

HUNT: Yes, Bob.

NOVAK: Do you think that the World Bank, like the U.N., needs reform? HUNT: Oh, I think every institution, even the CAPITAL GANG, needs reform, Bob, but I'll tell you something. I think Jim Wolfensohn has been a very, very good head of the World Bank.

NOVAK: That's what I figured you'd say.

HUNT: And I think Paul Wolfowitz will follow in those kind of footsteps.

NOVAK: I hope not.

HUNT: I really do. Yes, Mark.

SHIELDS: Okay, let me just say that the World Bank, unlike John Bolton at the U.N., who really dislikes and has total contempt for the institution, it's like making David Duke the Civil Rights Commission chairman.

NOVAK: Come on.

SHIELDS: It is.

NOVAK: That's unfair.

SHIELDS: He really -- he does not believe in the U.N. He's been very clear about it and Paul Wolfowitz does believe in the World Bank. But, Al, this is one more example in the Bush administration people fail up.

HUNT: All right. Mark Shields had the last word.

Coming up, the CAPITAL GANG classic, saber rattling by China a year and a half ago.

(BEGIN VIDEO CLIP)

ANNOUNCER: Here's your CAPITAL GANG trivia question of the week. Which former secretary of defense also served as president of the World Bank: a) George Marshall; b) Robert McNamara; or, c) Caspar Weinberger? We'll have the answer right after the break.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: Before the break we asked which former secretary of defense also served as president of the World Bank. The answer is B, Robert McNamara.

(END VIDEO CLIP)

HUNT: Welcome back.

A year and a half ago with the Chinese prime minister visiting Washington, President Bush criticized a Taiwanese referendum seeking independence and demanding that China remove missiles aimed at the island nation.

The CAPITAL GANG discussed it on December 13, 2003. Our guest was Republican Senator Oren Hatch of Utah.

(BEGIN VIDEOTAPE)

NOVAK: What this is, this is the deal that was cut by Richard Nixon, the Shanghai agreement, which was that you play the Chinese card against the Soviet Union -- remember the Soviet Union -- it was a big important thing in return for one China policy.

CARLSON: On the one hand, you have Chinese saber rattling and missiles and, on the other, you have little Taiwan with a referendum and Bush decides to coddle the dictators.

SEN. OREN HATCH (R), UTAH: Of course the Chinese interpret the referendum as a threat but I think Bush by getting rid of the process of what you call the strategic ambiguity for a process of clarity I think was a smart move on his part and I think he did a good job.

HUNT: This is a country that has made extraordinary strides with economic liberalization. It's a totally different China than it was ten years ago. They do a pretty lousy job in human rights and I wish both the Clinton and the Bush administration would keep on the pressure more than they do in that area.

SHIELDS: I made the mistake of believing George Bush when he talked about his commitment to democracy.

(END VIDEOTAPE)

HUNT: Mark, there has been no war in the Taiwan Straits since that show, a year and a half ago. Was the gang's criticism of President Bush unjustified?

SHIELDS: Al, when forced to choose between the consensus of my CAPITAL GANG colleagues and the Republican president of the United States, it's an easy call for me. I'll come down on my colleagues' side.

I thought Bob made a very good point that it was a policy born in the Cold War, the Shanghai agreement. There's no question about it. But, you know, I just -- I'm interested because George Bush has brought great morality and a dimension of morality to our foreign policy and does the United States have permanent allies and permanent friends or do we just have interests in that area?

HUNT: Kate.

O'BEIRNE: Had I been in your company that evening, I would have said the president was exactly right. America pays for provocations on the part of Taiwan. So, I think he said and did exactly the right thing.

HUNT: Margaret.

CARLSON: Oren Hatch said coming in on Bush's strategic ambiguity. Since our president doesn't do ambiguity, any ambiguity he's able to show I think is good diplomacy when it comes to this.

HUNT: You're not in ambiguity are you, Bob?

NOVAK: No, I think when Mark said that he was deceived by the president on democracy I think you're wrong on that. But let's say China is a small exception.

SHIELDS: Oh, okay. I see rather than a major exception.

HUNT: Well, all right on that. That's a bit of ambiguous note for Robert Novak and we'll end on that.

Next on CAPITAL GANG, we'll stick with China, China's latest threat to Taiwan. CNN's Mike Chinoy joins us after the break.

(COMMERCIAL BREAK)

HUNT: Welcome back.

The Chinese National Peoples Congress voted 2,896 to zero to approve an anti-secession law threatening use of force if Taiwan moves towards independence. Chinese President Hu, assuming formal control of China's military, said, "We shall step up preparations for possible military struggles and enhance our capabilities to cope with crises, safeguard peace, prevent wars and win the wars if any."

(BEGIN VIDEO CLIP)

WEN JIABAO, CHINESE PREMIER (through translator): The law is meant to check and oppose Taiwan independence forces. Only by checking and opposing Taiwan independence forces will peace emerge in the Taiwan Strait.

JOSEPH WU, TAIWAN MAINLAND AFFAIRS COUNCIL (through translator): We will employ necessary measures to reduce the negative impact caused by the irrational actions of the Chinese authorities.

(END VIDEO CLIP)

HUNT: The Bush administration signaled disapproval of the Chinese resolution.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We don't believe anyone should be taking unilateral steps or make unilateral changes that increases tensions and that's why we view the adoption of this anti-secession law as not helpful but we'll continue to encourage cross-strait dialogue or we continue to support the one China policy.

(END VIDEO CLIP) HUNT: Joining us now from Taipei is CNN's Senior Asia Correspondent Mike Chinoy. Mike, a lot of verbal saber rattling, has the anti-secession resolution increased the danger of military conflict?

MIKE CHINOY, CNN SR. ASIA CORRESPONDENT: Well, it certainly made the atmosphere a little bit more tense but, in fact, my sense is that it has not necessarily increased the danger of conflict.

And since the passage of the law, Chinese officials have gone out of their way to stress that this law is not, in fact, designed to give a blank check to Beijing to initiate hostilities but rather is designed to create a framework for a peaceful resolution of the conflict between Taiwan and China.

So, a lot of analysts and observers that I've been speaking to believe that unless the political reaction here in Taiwan spirals so out of control that Taiwan takes steps that forces China to act, in fact, it doesn't necessarily increase the danger of an armed conflict.

NOVAK: Well, Mike, what is your outlook on what the reaction in Taipei is? Is there a certain bunch of hotheads who want to go a little bit farther or is there some concern about provoking the Peoples Republic too much?

CHINOY: Well, there's no question that popular reaction here has been uniformly negative across the political spectrum. People don't like this law and, in fact, a week from Saturday there's supposed to be a march. The government is hoping for a million people to take to the streets.

But so far, Taiwan's President Chen Shui-bian has been quite careful in his reaction. He's been critical but he's left a lot of really harsh rhetoric to underlings trying to keep his options open.

And I think the reason for that is if you look closely at this law, even though there are some references to the use of non-peaceful means to resolve the Taiwan dispute there are also some things in there that are, in fact, from Taiwan's point of view fairly encouraging in the kind of language that the Chinese used.

So, this does not -- this certainly sours an atmosphere that had frankly in the last couple of months been getting a little bit better between the two sides but it doesn't sort of take this thing off the cliff.

CARLSON: Mike, has the appointment of the -- the nomination of John Bolton to be U.N. ambassador, a fairly prominent role, and he being pretty vocal about being pro-Taiwan, has that had any impact there? Are the Taiwanese aware of this and does it agitate them and make them -- rattle their saber any more strongly?

CHINOY: The Taiwanese watch political developments in the United States extremely closely and the fact that John Bolton is considered a long-time friend of Taiwan, the fact that he's been nominated to be U.N. ambassador has certainly not gone unnoticed here. Equally, the Taiwanese were very pleased to see a resolution passed in U.S. Congress criticizing the anti-secession law. So, they do follow these things very closely but they've also got to weigh a lot of other factors here, not least of which is that they can't change the geography. They're 90 miles away from mainland China and they've got to find some way to live with that fact.

But no question, in terms of morale, it's encouraging from Taiwan's point of view to see someone who is a long-time supporter of Taiwan in that kind of prominent position.

HUNT: Kate.

O'BEIRNE: Mike, under President Clinton it was U.S. policy to have strategic ambiguity about the U.S. cluster in the Taiwan straits. Under President Bush, is there more strategic clarity?

CHINOY: There certainly has been more clarity. The president on record early in his administration as saying the U.S. -- of his first administration saying the U.S. would do "whatever it takes" to defend Taiwan.

And interestingly, one of the consequences of this anti-secession law that Beijing would have been very unhappy with is that the United States and Japan recently had high level consultations. Both indicated that peace in the Taiwan straits was a strategic concern for both of them.

So, one of the consequences of this whole process of implementing the anti-secession law is actually to bring the U.S. and Japan closer together on Taiwan's side.

There is a certain sense in some ways in which Beijing has kind of shot itself in the foot on this thing and that is one reason why Chinese spokesmen have been back peddling in a lot of ways and trying to emphasize the conciliatory angles of the anti-secession law and downplaying the military threat side of it.

SHIELDS: Mike, we have less than minute. Let me ask you. You said the Chinese pay close attention to domestic politics here in this country. In 2001, 30 percent of the publicly held debt in the United States was held by foreigners. That went to 37 percent in 2003. Now it's at 44 percent and the big bond holders, as you know, are Japan and China. What does that do to China in its relations with the United States? Does it more or less help us on North Korea for example?

CHINOY: Well, I mean the Chinese have all sorts of strategic interests. Their economic interests would not be served by pulling out all the money they've invested in the U.S.

On North Korea, the Chinese have mixed feelings. They don't want a nuclear North Korea. They don't want North Korea to collapse. And so they'd like to see a deal and do not support efforts from the U.S. side that would accelerate the process of regime change. On Taiwan though, should the situation ever deteriorate into a total crisis, the fact that China has so much financial stake in the U.S. does give them a potential weapon to use if the U.S. and China seem to be on a collision course over Taiwan.

But the bottom line in relation to this anti-secession law is that for the moment the sense here is that the Chinese are still looking for a peaceful way out and that this law does not change that dynamic and make the use of force more likely anytime soon.

HUNT: Hey, Mike thanks very much for joining us.

The gang will be back with our "Outrages of the Week."

(COMMERCIAL BREAK)

HUNT: And now for the "Outrages of the Week."

Terri Schiavo, a severely brain damaged woman, has lived in a vegetative state for 15 years. Her husband wants to have her feeding tube removed. That's a difficult and delicate issue but one that publicity seeking Congressmen have no right to be involved in.

A House committee wants to hold a hearing in her hospital room and a Senate committee wants her brought to Washington. These are cheap stunts. Politicians instead ought to make sure all people with disabilities have a better life and access to more resources -- Kate.

O'BEIRNE: This week marked the latest round in the battle over the life of Terri Schiavo whose parents fight to allow her to continue to live, while her husband, now living with another woman and their two children, fights to have her feeding tube removed.

Let's be clear. Once the feeding tube is removed, she is not being allowed to die. She's being killed by being denied food. A death row inmate has more due process rights than this disabled woman who now faces a death sentence -- Bob.

NOVAK: Liberals on Harvard's faculty show their true colors by voting no confidence in their fellow liberal Larry Summers as Harvard's president. His sin, he was politically incorrect in explaining why women have trouble competing with me in the higher reaches of science.

For several weeks, President Summers has been bowing and scraping, apologizing for being honest. When his faculty members this week indicated they could not accept his apology for being political incorrect, he issued a statement telling the Harvard dons to move on to other problems. It's about time, Larry.

HUNT: Dr. Carlson.

CARLSON: Yes, right, in higher science.

Tom DeLay was so ticked off at the three slaps on the wrist he got last year that he bullied Speaker Dennis Hastert and even moderates like Nancy Johnson into gutting the Ethics Committee.

Written in secret by the leadership, the new rigged rules assure gridlock and the deep-sixing of ethics complaints without a paper trail. Hastert also replaced members with any sign of a spine with totally loyal foot soldiers. A warning on the Capitol Hill building, you are now entering an ethics free zone.

HUNT: Mark.

SHIELDS: Al, in the first round of the NCAA men's basketball tournament two teams, Louisiana State University and the University of Minnesota, shared a humiliating distinction. In the past ten years, neither LSU nor Minnesota has graduated a single entering freshman basketball player.

Among other (UNINTELLIGIBLE) schools the record is not much better. Louisville's graduation rate is 17 percent and Oklahoma State is an abysmal 11 percent. Two-thirds of the schools graduate fewer than one-half of their players.

Next year the NCAA will impose sanctions, loss of scholarships and an exclusion from tournaments to schools without a 50 percent graduation rate. It is long overdue.

HUNT: It is. And this is Al Hunt saying goodnight for the CAPITAL GANG. Thanks for joining us.

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