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CNN LARRY KING LIVE

Midterm Elections '06

Aired October 12, 2006 - 21:00   ET

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


(BEGIN VIDEO CLIP)
LARRY KING, CNN HOST (voice-over): Tonight, sex, trust, abuse of power, the Foley fallout just won't quit. Today, the disgraced ex- congressman's former chief of staff testified for hours before the House Ethics Committee. The House majority leader and others are waiting their turn.

With the elections less than a month away, will Washington's most sensational scandal in years end more than a decade of Republican congressional rule? The debate starts now on LARRY KING LIVE.

(END VIDEO CLIP)

KING: Good evening.

We have a major panel discussion coming. And, in the middle of it all, we'll met Ed Gillespie and Terry McAuliffe, two former chairmen of their respective parties, the Republican and Democratic Parties to go at it.

Let's start with Andrew Sullivan in New York. He blogs on andrewsullivan.com. He's the author of "The Conservative Soul, How we lost it and how to get it back." Andrew, what's your read on the whole Foley thing?

ANDREW SULLIVAN, AUTHOR, "THE CONSERVATIVE SOUL": Well, I think it gets to the whole idea that they've been in power too long and that they've gotten very used to power and they're abusing their power, not only over pages but spending billions of dollars that they don't have, not protecting the border, and betraying basic conservative principles of limited government. And, it's time to get back to those principles, which means some conservatives are saying kick these people out.

KING: So, you are saying the Bush administration is not conservative?

SULLIVAN: Yes, I am saying that. I'm saying that when you've increased the debt the next generation has to pay from $20 trillion to $43 trillion in five years, when you can't even control your own borders, when you've engaged in a war that you haven't planned for and have no strategy for that's not conservative in my book.

KING: Amy Holmes is in Washington. She's a GOP strategist and a former speechwriter for Senate Majority Leader Bill Frist; Amy, staying now on the Foley matter, what's your read on that and its effect on the coming elections?

AMY HOLMES, GOP STRATEGIST: Well, obviously it hasn't been good and it's been crowding out the Republican message for the past two weeks. But, interestingly enough, there's this new polling data that's showing that there actually hasn't been a Foley effect.

The Pew Research Center did polling before and after the scandal and they didn't find any difference in intensity among Republican or Democratic voters. Now, of course, the big challenge for Republicans is that intensity might be low.

So in this home stretch that's where Ken Mehlman gets out and does his magic, does turn out, you know, get out the vote efforts and where these politicians are really going to have to show their skills as retail politicians shaking every hand and getting reconnected with their constituents.

KING: Dennis Prager is host of "The Dennis Prager Show" one of the more popular programs on radio. He's a best-selling author and lecturer and certainly can be called a self-admitted moralist.

DENNIS PRAGER, HOST, "THE DENNIS PRAGER SHOW": Self-admitted moralist. All right, I admit it.

KING: I accuse you of it. Does the Foley matter bother you?

PRAGER: The matter bothers me but not politically. A congressman is given a page to nurture and take care of and not to try to have an affair with, with same-sex or opposite sex, so that bothers me. There's no question about it and a great deal in fact but, it doesn't bother me politically.

KING: Why?

PRAGER: Because it will have no repercussion in my opinion. Even "The New York Times" I'm sure through its great chagrin had on the front page that conservative, religious conservatives, the people most likely to be offended by such a sexual scandal, are not at all turning away from the Republicans. It was a front page article.

KING: Why aren't they offended?

PRAGER: Oh, they are offended but they're not going to -- they're not going to stop voting Republican as a result. That was what the article was about. They're going to still go to the polls and they should because what is the alternative, a party that doesn't share any of their values.

So, as much as any conservative might say, "Well, it's not been a conservative enough administration," when you look at the alternative, you end up voting Republican.

KING: Andrew, what's the effect going to be in your opinion on the congressional races?

SULLIVAN: Look, I think Dennis is wrong. It's not that they're not being conservative enough. The way they've spent money and built up debt for the next generation is not just a deviation from conservatism it's an attack upon conservatism. The way conservatives have always wanted to protect people from government power, rather increasing government power, is an attack upon conservatism, isn't a defense of it.

I think the Foley thing speaks to a general sense and it's true of both parties, Larry, Democrats or Republicans. If they're in power too long, this was true of the Democrats in the late '80s, if they've been in power too long, and early '90s, they get corrupt. It happens to all of them and it's time for the people to tell them that. And the only way you can really tell them that is to punish them at the polls.

KING: Arianna Huffington joins us, the founder and editor of huffingtonpost.com, the nationally syndicated columnist and author. She's in Chicago. Her newest book is, by the way, "On Becoming Fearless in Love, Work and Life." There you see its cover.

Arianna, let's jump in with you who arrived a little late because of air traffic problems in Chicago. What's your thought on the Foley matter?

ARIANNA HUFFINGTON, CO-FOUNDER, HUFFINGTONPOST.COM: Well, I actually think that this is not ultimately about sex and sorted IMs. It's about trust when it comes to politics in November. And it's the tipping point. It's part of a building narrative that you can't trust the GOP.

You can't trust them to tell the truth on Iraq. You can't trust them to tell the truth about the impact of tax cuts. You can't trust them on Katrina. And now, this is something which may not be as huge as Iraq, or as huge as many of the other issues that we mentioned, but it is the tipping point and that's how elections are won or lost.

I mean you remember in '94, Newt Gingrich tried to lump everything together. He even tried to lump Susan Smith, a woman who drowned two of her children, and Newt Gingrich just a few days before the election in '94 went out to the country and said, "This is all a demonstration of how sick our system has become. It's time for a change and the only way to change is to vote Republican." Well, right now it's time for a change and the only way to change is to vote Democrat.

KING: Amy, how would you respond?

HOLMES: Well, I would respond that if we're, you know that it's unfair to be tarring the Republican Party with the sexual predations of one man who has resigned from office. Speaker Hastert came forward I thought appropriately to call on FBI investigators to come into the situation.

I think when we start talking what Arianna and Andrew have been referring to in terms of, you know, policy issues that is good turf for Republicans to be playing on because they can talk about unemployment at 4.6 percent. They can talk about falling inflation, falling gas prices. But I don't think that trying in the Foley affair, every Republican has denounced this. There is no one who is in favor of this man's behavior.

SULLIVAN: But, no one -- no one has taken responsibility. It used to a conservative idea that you took personal responsibility. If the speaker did not know about this, and apparently a lot of people did for many years, he should have known about it and he should take responsibility, just as Rumsfeld will not take responsibility for losing this war, just as no one took responsibility for Abu Ghraib, just as no one has taken responsibility for the debt. This is about responsibility and taking it.

KING: Would you agree, Dennis that things are generally, as perceived by the public in looking at the polls, not going well for the incumbent party?

PRAGER: I might have thought that until, oh, even a few weeks ago but...

KING: Bush is at 38.

PRAGER: Well, OK, first of all I'm not sure that people vote for their senator or their representative as a referendum on how popular the president is. Secondly, people are frustrated about Iraq. I'm frustrated about Iraq. But the Democrats don't have an answer to Iraq. They can only complain.

KING: But what if no answer is better than what's going on?

PRAGER: No answer is never better than what's going on.

KING: In other words keep them dying that's better.

PRAGER: Well, that's not the policy keep them dying. It's they will die far more if we leave.

KING: I see.

PRAGER: And everybody knows that including most Democrats.

KING: Except the public.

PRAGER: The public does know that. The American people are not stupid.

HUFFINGTON: Well, Dennis you can't -- Dennis, you can't say everybody knows that.

KING: You think the American people favor this war?

PRAGER: No, I think that the American people know that the Democrats will not handle it better and will handle it worse.

KING: Arianna, true, your party has no plan?

HUFFINGTON: Well, first of all, the numbers are changing significantly. I agree that the Democratic Party is not united behind one plan but there are very distinct, very clear voices within the Democratic Party putting forward an alternative plan, starting with Jack Murtha, who is a hawkish Democrat who believes that we need to redeploy our troops, who believes that our very presence in Iraq at the moment is exacerbating the violence.

And, incidentally, that happens to be the view of the majority of Iraqis in a very good latest poll in Iraq that by vast majorities the Iraqi people want us to leave. And we're supposed to be there to do their will.

We're supposed to be celebrating the fact that they're voting and exercising their free will. So, why don't we listen to what they want? They're actually celebrating the fact that there is violence against American troops. That's how bad things have gotten.

KING: Arianna, hold it. Hold it one second. We'll get right back. I got to take a break. We'll come right back with our panel on this edition of LARRY KING LIVE. Don't go away.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to say this to you. I am proud to be standing with the current speaker of the House who is going to be the future speaker of the House.

(END VIDEO CLIP)

KING: That was tonight in Illinois. Is he right, by the way, Dennis?

PRAGER: The future after the elections?

KING: Yes.

PRAGER: I don't think so.

KING: You think the Democrats will win.

PRAGER: But I think -- I certainly think -- no, no, the Democrats won't win. I just think -- I think that there will be a newer...

KING: (INAUDIBLE).

PRAGER: I think the Republicans will retain Congress and I believe, I mean which is a pretty bold thing to say right now I admit, and I think that he will simply desire a new speaker.

KING: Who does the buck stop with, as Arianna mentioned, with Foley? Is it just Foley?

PRAGER: I think so.

KING: In other words (INAUDIBLE).

PRAGER: Listen, in Miami -- listen...

SULLIVAN: I'm amazed Dennis that you...

PRAGER: This is very important.

KING: Hold on, let him finish.

PRAGER: Wait, wait, wait (INAUDIBLE). You and I are wonderful comrades. I know that. Hold on a sec and I mean that. He's published me and I have him on my show.

The "Miami Herald" and "The St. Petersburg Times" all had the same e-mails that purportedly were given to Hastert and they did nothing with them because they said, "We don't know what this shows." Now, if liberal newspapers aren't going to publish something about a Republican congressman, it means that it really wasn't that clear.

KING: But how about further things we've learned?

PRAGER: The further things were not known though. The IMs, the instant messages, which were purely sexual, those were not known to anybody in the Republican administration.

KING: Nobody covered up anything after that?

PRAGER: No, not that we know of to the extent that we know.

KING: Then what's all this investigation about?

PRAGER: Well they're having an investigation. But on the basis of what we now know, all he saw were a couple of e-mails, send me your picture and when is your birthday?

KING: We have straightened out Ed Schultz and we want to bring him in. He was scheduled so we have total balance, although Mr. Sullivan has thrown me a little. I'm not sure we have total balance.

Ed Schultz is the host of "The Ed Schultz Show," nationally syndicated on the Jones Radio Network. He's billed as America's number one progressive talker and the author of "Straight Talk From the Heartland." What's your read on the Foley matter as it affects the elections, Ed?

ED SCHULTZ, RADIO HOST, "THE ED SCHULTZ SHOW": Well, Larry, I see it differently. I do believe that there is going to be a political fallout to all of this because I think it's part of a pattern that has taken place within the conservative movement.

You know, you can nitpick this or wordsmith it anyway you want. The fact is they knew about Foley a number of years before he ran for office in 2004 and they didn't do anything about it.

The fact is Karl Rove said in January of '04 that he needed to get four million evangelical Christians out to vote and that was going to be the difference. Now, I just wonder if the evangelical Christians had known about this story would they have voted for George Bush and bought into this full line of GOP about how the Democrats are Godless and about how the Democrats aren't the party of moral value.

So, they went around putting up these vote value signs in South Dakota and went after Tom Daschle and his faith and it worked. But I think if this gay story had come out the way it was, I think it would have been different. And it is a gay story and it is about pedophilia and it is about not telling the truth to the American people.

And, I think the American people right now are politically exhausted. They just want to know what the truth is. They just want an investigation and they just want to get to the bottom of it and they want to know when they go in that booth that they're voting for somebody that's going to be honest with them.

SULLIVAN: Excuse me but this is not a gay story.

KING: Amy Holmes -- Amy.

SULLIVAN: This is not a gay story, Larry. I'm not going to let him get away with that.

HOLMES: Yes, I agree, Andrew.

SULLIVAN: This has absolutely nothing to do with gay people.

KING: Nothing?

SULLIVAN: It has everything to do with the abuse of power. If this had been done to a girl page, it would have been just as appalling. And to tie gay people with a pedophile brush from the left is really disgusting and I think you need to withdraw that remark.

SCHULTZ: Well, the point I'm trying to make, well I'll use you as an example, what are you doing in the Republican Party? Do tax cuts mean that much to you?

SULLIVAN: I'm not a Republican.

SCHULTZ: This is a party that -- this is a party that has thrown you under the bus. This is a party that has totally disregarded. This is a party that has kept this story in the closet and they've run around the country putting the gay marriage amendment on eleven states, one of them in Ohio, and told the people that they were the party of moral value. I think that's wrong and I think the people have got this figured out this time and there will be a political fallout.

HOLMES: But I'd like to jump in here.

KING: Let Amy say a word -- Amy.

HOLMES: I'd like to jump in and agree with Andrew that to conflate homosexuality with pedophilia is a very nasty charge and I think totally irresponsible. And, by the way, there is no evidence... SCHULTZ: Well, I wasn't doing that.

HOLMES: ...there is no evidence that GOP leadership or Karl Rove knew anything about Mark Foley's behavior towards these young male pages.

SCHULTZ: You're going to tell me that Karl Rove doesn't know what's going on in the Republican Party?

HOLMES: He is not reading Mark Foley's instant messages or e- mails.

SCHULTZ: He's the one that told Foley to run.

HOLMES: Karl Rove is a powerful man but he is not all-seeing and all-knowing. He did not know about Mark Foley's IM-ing pages and I think that is a very nasty charge.

SCHULTZ: Did he or did he not tell Foley to run? They knew about Foley and they encouraged him to run in '04.

KING: One at a time, guys.

SCHULTZ: That's a fact.

KING: One at a time. I got a lot of guests here. We're trying to control it.

HUFFINGTON: OK, Larry...

KING: Let me take a break. Hold it, Arianna, I'll come back with you.

But first, up next a couple of party guys square off against each other, the former chairman of the Democratic and Republican Parties. The fireworks begin when we come back.

(COMMERCIAL BREAK)

KING: Two friends, two terrific guys, two formers, join us in Washington, Ed Gillespie, the former chairman of the Republican National Committee, the author of "Winning Right, Campaign Politics and Conservative Policies," there you see its cover; and, Terry McAuliffe, the former chairman of the Democratic National Committee.

Ed, what's the effect of the Foley matter on your party?

ED GILLESPIE, FORMER CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Oh, I don't think we're seeing an effect other than a distraction. The fact is in races across the country in congressional districts and in states, Republicans are talking about their policies. They're talking about the economic growth we're seeing under Republican tax cuts and the fact that if Democrats were to take control of the House, they would reverse all of that.

Charles Rangel would be the head of the tax-writing committee in the House. He says there's not a single tax cut that George Bush has passed that he would extend. That would reverse that economic growth.

Those are the kinds of issues that voters are making a vote determination on when they go to the voting booth on November 7. And, we're doing well on those issues -- Larry.

KING: Terry, how is the Democratic Party going to do on November 7th?

TERRY MCAULIFFE, FORMER CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: Well, I think there's now about 45 Republican seats that are now in play that is double what we had probably six or seven months ago.

You know the whole Foley issue, I don't know how many votes that's actually going to change but what I do think it will greatly affect is turnout. And, when you add the whole Foley issue on top of what you've seen with this Bush administration, the Congress, the record deficits, what's happened in Iraq, the mismanagement in Iraq, Terri Schiavo, stem cell, you just go through the litany of issues that Americans are facing today.

And they're looking at this Republican Congress and they're saying, "What have you done for me?" And I think this is going to greatly affect the turnout for the Republicans. The evangelicals are very upset about the Foley, the cover-up, the issue that went on with Republicans who knew about this for many years and wanted to win this seat and therefore didn't do anything about this predator.

And, also the issue of the gigantic deficits, I think all of that is coming together. The Democrats are going to have a great night on November 7th in the House, Senate, and I think we probably net five new Democratic governors.

GILLESPIE: Larry, can I address a couple of those points just quickly?

KING: Sure.

GILLESPIE: First of all, the deficit we just found out yesterday the president's goal of cutting the deficit in half over five years, he beat that goal by three years. The deficit has been cut in half and it's on its way, I think, to balance.

The second thing is there's no evidence that the leadership knew about any of this and covered it up for years. And there is an investigation going on right now as well there should be. But, in the previous segment, Amy pointed out the fact is the speaker wasn't aware of the instant messages. They were graphically different literally from the e-mail.

And, third, you know, the notion that evangelical voters are going to go and vote for Democrats or not vote at all so that Nancy Pelosi, a San Francisco liberal, can get control of the agenda in the House of Representatives is naive. That's just not going to happen. I know it's a hope on the Democratic side but it's not demonstrated in the polling data. KING: Nobody knows what's really going to happen. Terry, what do you think is the effect of the Iraq war on the congressional elections?

MCAULIFFE: Well, if you look at all the polls, in fact, if you look at the CNN poll today the Democrats now lead on the issues of who would do a better job on the issue of terrorism. We now lead on the issue of who would be -- do more for the morality of this country. The Democrats lead on that on economic issues.

But the war in Iraq, as you know, we've lost many of our troops. We've seen 20,000 of our troops who have been wounded, 10,000 of those are now permanently maimed, 2,700 soldiers have been killed. We've spent hundreds of billions of dollars.

This is a war that -- this is George Bush's war and we now have a civil war in Iraq because what George Bush has done, he misled us from day one. He didn't have a plan for what to do after major combat operations were over.

But it's the war, it's also the deficit. Ed says well he's cut the surplus in -- or the deficit in half. He's still talking deficits. With Bill Clinton, we had two years of surpluses his last two years for the first time in 50 years.

Their party is the party of deficit spending. Over Bill Clinton's term, spending non-defense was up 3.2 percent. Under George Bush it's up 8 percent under George Bush.

KING: We're veering off.

GILLESPIE: Yes.

MCAULIFFE: These are the biggest spenders we've ever had in the history of our country (INAUDIBLE).

GILLESPIE: Larry.

KING: Ed.

GILLESPIE: Larry, I was there when the Republicans took control of the House of Representatives, I'm proud to say, and the Senate in 1995 and that's when we got balanced budgets. Before Republicans took over Congress the Clinton budgets projected deficits for as far as the eye can see.

But, I do agree with Terry. I think the Iraq war and the war on terror are going to be central issues in the election in November and that's why Republican candidates, a majority, are going to win, and we're going to keep control of the House and the Senate -- yes.

KING: Ed, you're not saying, are you that the Iraq war is going well?

GILLESPIE: I'm not saying the Iraq war is going well. I'm saying that success is imperative and the fact is what we need to do is to make sure that we complete the goal of having a free and stable Iraq that is an ally in the war on terror in the heart of the Middle East, not turn it over to those who would seek to do us harm and be enemies and wage terror upon us, terrorism upon us.

An immediate withdrawal, as Nancy Pelosi and Howard Dean and other Democratic leaders in the Congress have called for is what would result in that and voters are going to have to weigh this decision carefully, Larry.

They're also going to have to look at where Democrats are on the NSA wiretap program, which has intercepted and helped protect American lives since September 11, 2001.

They got to look at whether or not Democrats support an effort to allow for terrorist suspects in Guantanamo to clog our courts with civil lawsuits so that they can get high speed access to the Internet. I mean those are legitimate discussions of how we treat folks in the war on (INAUDIBLE).

MCAULIFFE: Ed thinks this war is going great.

GILLESPIE: I didn't say that.

MCAULIFFE: And I want everyone who's watching your show...

GILLESPIE: I didn't say that, Terry.

(CROSSTALK)

KING: He didn't say that Terry.

GILLESPIE: That's not what I said.

MCAULIFFE: ...who thinks this war is going great then you vote, you vote you for the Republicans. But I will tell you this. The NIE has just come out and said that we now have more terrorists today because of the war in Iraq. We have created more terrorists. We have instability throughout the Middle East. We have a civil war. This is George Bush's bungle and it will affect our nation for many years to come.

We now have North Korea, which has now (INAUDIBLE) they're talking about now nuclear weapons. This didn't happen under Bill Clinton. Our world is less safe because of George Bush and he spent us into a gigantic hole that our children will be paying off for many years to come. It's time for a change.

GILLESPIE: Let's be clear, Larry.

(CROSSTALK)

KING: One at a time. Ed, you got 30 seconds, Ed.

GILLESPIE: Well, when Madeleine Albright took the Michael Jordan signed basketball over to Kim Jong Il and they cut a deal for more support for the North Korean government in exchange for them not developing a nuclear weapons program and then turned a blind eye to that that's when they were developing that program.

And the fact is the Democratic leaders in the House are opposed to a missile defense system that now we see once more why it is in our national security interest to have one and they are against that.

So, these are the issues that voters are going to weigh and weigh carefully. And, again, that's why we'll win on the issues, Larry, if the issues are about he national security and economic (INAUDIBLE).

MCAULIFFE: Just remember plutonium under George Bush 41, George Bush 43 a reactor that was built under Ronald Reagan, not one iota of plutonium was enriched when Bill Clinton was president.

KING: Gentlemen...

MCAULIFFE: Bush 41, Bush 43, this is their problem, once again made us less safe.

KING: Gentlemen, we'll see you both on election night.

MCAULIFFE: All right, Larry.

GILLESPIE: All right, Larry.

KING: Ed Gillespie and Terry McAuliffe, the two former chairmen of their respective parties.

We'll be back with our panel and more. Don't go away.

(COMMERCIAL BREAK)

KING: We have an outstanding panel. They're all very good, and therefore we'll hope to get everybody in and give them a lot of time.

Arianna Huffington, is there a key issue?

HUFFINGTON: A key issue?

KING: Yes, in the campaign? Is there one thing that is going to single out?

HUFFINGTON: Well, I think the defining issue, as we find out from every poll, is Iraq. What is so interesting, and from what Ed Gillespie said, is that right now they would rather talk about the deficit than talk about national security.

The one advantage that this president has had since 9/11 has been national security. And he's losing that advantage.

And, Larry, he's losing that advantage, including with security moms -- remember, in 2004, it was the so-called security moms who gave George Bush the White House. It was the moms who were married with children, who believed that George Bush would keep them safe, and they trusted him more than they trusted John Kerry on national security.

He's now losing them. By double digit numbers, they say they re favoring congressional Democrats. That's huge, including Southern women.

KING: So, to you, that's the central issue. Dennis, what is it to you, central issue? Is there one?

PRAGER: I don't think there is a central issue. I think people will ask themselves A, is my congressman the want I want to reelect, is my senator a new one or one I want to reelect? And who is better for the country? If it's security, I will still -- whatever polls say, I still bet on the Republicans in people's minds. It's the Democrats who emasculated the CIA, which caused a lot of our problems. You can't do covert operations, you need to get legal permission to do anything you do in a foreign country. It is the Democrats who largely have been opposed to the just the massive tapping of phone calls by computers.

KING: You said it wouldn't matter, it was all individual race by race?

PRAGER: Right. But if it does -- where it would matter, the Republicans would still come out ahead.

KING: I see. Ed Schultz, what do you think?

SCHULTZ: Well, I think Dennis is overstating the Democratic position here. No one on the Democratic side has said, don't go after terrorists and don't use every tool possible. All they've asked for, Larry, is oversight. Just bring them into the loop on what's going on. Why do we have an Intelligence Committee? Why is Jay Rockefeller writing letters to the vice president asking him what the heck is going on and then gets no response?

I mean, it has been about absolute power. It has been about a cabal trying to make all the decisions and excluding the Democrats.

The Democrats haven't had any input on any of this stuff. They've been excluded.

And then the right wing sound machine goes out and says, well, the Democrats, you know, they're weak on terror, they don't want to do anything. No, they just want oversight.

KING: Andrew Sullivan, what is your thought? Is there a central issue?

SULLIVAN: Yes. And to paraphrase, it's the war, stupid. I mean, people know that the president told us that this war was the most critical thing for our generation, that our very survival depended on it. And they have watched this war closely, and they're not stupid.

And the evidence is that the violence is spiraling, that we're losing more people, that innocent Iraqis are dying now at record levels. The suicide attacks are soaring. We obviously do not have a successful strategy. We do not have a successful plan.

And what the president does whenever that happens is support the people who have presided over failure. He gives Congressional Medals of Honor to people who screwed it up. He's kept Rumsfeld at war, the defense secretary, who has bungled this war, and then he's telling Denny Hastert that he's done a great job when he presided over Congress in which this guy was at large and manhandling and groping and preying upon pages.

That's what it is about. It is about the war and taking responsibility for it. And the Democrats may not have a plan, but the president's plan is clearly failing.

KING: Amy Holmes, the president said yesterday, as he said frequently, that by fighting the war in Iraq, he prevents there being a war on our soil. Do you accept that?

HOLMES: Well, I do accept that. And the NIE report that was referenced in the previous panel with Terry and Ed also states that if we were to pull our troops out, if we were to cut and run, then in fact we would be worsening the problem there and we would have, you know, just a complete mess on our hands.

SULLIVAN: How much worse can it get?

HOLMES: This NIE report said that we need to stay and stay to win. And I agree that winning is the only strategy. But you're asking the other panelists what they thought were the key issues in this election.

SULLIVAN: Do you think we're winning this war?

HOLMES: I agree that Iraq...

KING: Let her finish.

HOLMES: I agree that Iraq is a key central issue to this election. I think violence in Iraq does complicate Republican election chances. But there is also polling data out there that shows that when you ask constituents, are they happy with their congressman, they get 60 percent approval ratings. So when we're talking about accepting responsibility for the war, that's also Democrats who voted in favor of President Bush moving forward into Iraq. That was not a purely Republican vote or Bush's war, as his opponents like to say.

KING: Arianna, if we see a huge turnout on November 7th, what would that indicate to you?

HUFFINGTON: Well, it depends on who turns out. I think there is no question that judging by the polls so far, the Foley incident and what it implies is going to depress turnout among conservatives. Because this is not just Democrats who are criticizing the leadership for the way they basically allowed Foley to get away with it. It's also very conservative Republicans, like Richard Viguerie, who said that basically, once again, Republicans, the leadership, put expediency and staying in power above principle.

So there is a lot of turmoil at the moment within the conservative base. And on top of it, if we look at the economy, you know, Ed Gillespie may be talking about the deficit, which is at the moment what the surplus was when Clinton was in power. But much more significant is that people know that their lives, their economic lives are not going well. The middle class is being squeezed.

You have a report in "The Wall Street Journal" today that CEO salaries have increased 369 times more than the average worker. This is unprecedented. So all that is something which people are feeling right now. That's why Sherrod Brown running for the Senate in Ohio is actually doing so well, because he's running on a Democratic populist agenda, and the Democratic Party has to do some soul-searching as to whether it is going to be the DNC party or a new party.

HOLMES: He's also doing well because of very specific local corruption charges against local politicians there in Ohio. I don't think that that is a fair or a good example for the national picture.

KING: Let me get a break and we'll come back with more of our panel on this edition of "LARRY KING LIVE." Don't go away.

(COMMERCIAL BREAK)

KING: We have been talking about local congressional campaigns. We're going to show you a couple of ads, television ads for two of them. The first is for GOP Congressman Tom Reynolds of New York, and then Democratic congressional candidate Patty Wetterling in Minnesota. First, Reynolds in New York. Watch.

(BEGIN VIDEO CLIP)

REP. THOMAS REYNOLDS, (R-NY): Last week we all learned of other e-mails, worse than anything I had heard before. I immediately forced Foley to resign. Nobody's angrier and more disappointed that be me that I didn't catch his lies. I trusted that others had investigated. Looking back, more should have been done, and for that, I am sorry.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It shocks the conscience. Congressional leaders admitted covering up the predatory behavior of a Congressman who used the Internet to molest children. For over a year, they knowingly ignored the welfare of children to protect their own power.

For 17 years Patty Wetterling has fought for tougher penalties against those who harm children. That's why she's demanding a criminal investigation and the immediate expulsion of any Congressman involved in this crime and cover-up.

PATTY WETTERLING, CONGRESSIONAL CANDIDATE, (D-MN): I'm Patty Wetterling, and I approve this message.

(END VIDEO CLIP)

KING: Two classic ads, a major issue. Mr. Prager, your thoughts on Mr. Reynolds' apologizing? PRAGER: Well, this Patty Wetterling ad, which I had not seen before, is dishonest. He didn't molest children. I mean, it's bad enough what he did.

KING: Well, he verbally molested them.

PRAGER: Well, he...

SULLIVAN: They weren't children, KING. They were over 16.

(CROSSTALK)

HOLMES: Well, it is also flat out dishonest that she's saying this.

PRAGER: A very important point -- they show her with a child, but he wasn't doing...

KING: Let's say it is dishonest. Is it effective?

(CROSSTALK)

HOLES: It was also dishonest because...

PRAGER: Dishonesty may well be effective.

KING: Amy, you're talking at the same time as other people. We can't hear you. Amy, does honest or dishonest, the Reynolds ad is a classic example of, the Republicans may be in trouble, and her ad is a classic example of someone on the offensive?

HOLMES: I think that's right. I mean the Reynolds race was already going to be a close one. Now it is a nail-biter because of this Foley business. But Patty Wetterling's ad is flat out dishonest. The GOP leaders, Congressmen have not admitted to some cover-up. I don't believe a cover-up existed. I think she over reached on that ad. I think that that was irresponsible.

SULLIVAN: You know, Larry, I think what some voters are thinking is maybe it's about time we had divided government. Regardless of whether you're a Democrat or Republican, doesn't it work better, sometimes, when there's some group there that actually checks the power of other people?

And whatever view you have, divided government worked pretty well with Gingrich and Clinton. Maybe it's time to put a check on the Republicans, by having one of the houses with a different party. Then we might actually have a debate.

KING: Good point.

Ed Schultz?

SCHULTZ: Well, I think the point on the Reynolds ad is that he's just trying to save his reputation. He knows where this election's going, and he's the guy who is head the re-election campaign, who encouraged Foley to run again.

All this talk about "We're not really sure if it is a cover-up," give me a break. You got discrepancy after discrepancy within the Republican party trying to cover this thing up. It wasn't until eight days after the story broke that Denny Hastert decided to call an investigation on it. So as far as the -- and also the ad on Reynolds, well, he's trying to save his reputation. He knows where this is going. He wants to be able to look back on it and say, well, I told the truth to the voters. But it's too little too late. And I think...

(CROSSTALK)

PRAGER: I'd just like to know, Ed, do you think...

KING: Hold on, hold on. Arianna, you're next. Hold on.

PRAGER: Just curious. Do you think the Patty Wetterling ad was honest?

SCHULTZ: I do not think the Patty Wetterling ad was honest, totally. No. I think that that was over the top. I think she's a very anxious candidate. I think that she's still traumatized by the loss of her son some years ago. It's been a real tough road for her...

PRAGER: I appreciate your honesty.

SCHULTZ: ... and to be honest about it, I really think that that ad was over the top. But that doesn't mean she's not a good candidate. And that doesn't mean she can't win.

KING: Arianna...

PRAGER: Well, I think it does.

KING: Arianna?

HUFFINGTON: The Reynolds ad demonstrates that despite what Amy and Dennis and Ed Gillespie said earlier, this Foley affair and the cover-up is having an impact. Otherwise, why would Reynolds make an ad like that, he's clearly looking at his internal polling, and he's looking at the impact this is having. And that's why I'm calling it the potential tipping point on top of everything else.

(CROSSTALK)

KING: Let me get a call in.

Valencia, California, hello.

UNIDENTIFIED FEMALE: Hi, Larry.

The Republican party has blamed Clinton for everything from 9/11 to North Korea, they tried to blame a Democrat for starting the Foley scandal. I've got kids that I try to teach value of responsibility to, and quite frankly, if they acted like the Republican party, I'd send them to their rooms. Why do the Republicans talk so much about values, and then try to blame everyone else for their own failures, mistakes, whatever? It's always the other guy's fault.

KING: Want to comment, Dennis?

SULLIVAN: I think that..

KING: Go ahead, Andrew. Go ahead.

SULLIVAN: I think it's absolutely right. I think there are also some conservative principles, namely you balance your budgets, you don't mount up debt, you make sure if you send troops into battle, you have a plan to back them up when they get there. Those are conservative principles. There's a conservative resistance to this abuse of power, as well as a liberal resistance. And that's important...

KING: As conservatives, has Amy -- has Andrew Sullivan said anything that impresses you tonight as a conservative as well?

HOLMES: Well, I think it is true, that within the Republican party and among conservatives, there has been frustration with government spending and that it's gone up. I think that that's a fair criticism. But I don't think roping in Mark Foley, war in Iraq, and throwing it in a pot and stirring it and saying, throw the bums out is necessarily really on point.

KING: We'll take a break and be back with more, with Andrew Sullivan, Arianna Huffington, Dennis Prager, Ed Schultz and Amy Holmes.

Don't go away.

(COMMERCIAL BREAK)

KING: Before we take another program -- another phone, Dennis, you want to comment on -- you're not saying the Republican party owns values and the Democratic party doesn't?

PRAGER: Neither owns values, but they have different values. And I'll give you one example. This is a topic for, you know, a marathon Larry King show. But one is, the Republicans believe in American exceptionalism and the Democrats believe in a much more universalist vision, like the West Europeans. That's a huge difference. That is why it matters -- laughing doesn't answer it.

KING: Why are you laughing, Andrew?

PRAGER: It doesn't answer it.

SULLIVAN: I wasn't laughing.

KING: Who was laughing?

UNIDENTIFIED MALE: It was Ed. HUFFINGTON: I'm laughing. I'm definitely laughing.

UNIDENTIFIED MALE: I'm laughing at that, Larry.

HUFFINGTON: Can I say why I'm laughing?

PRAGER: Laughing speaks to the laugher, not the person. We tend to believe that the United States knows better than the United Nations what is good for humanity. That is why the United States withdrew...

KING: In other words, you're saying the United States is superior to Sweden?

PRAGER: Yes, actually, in terms...

(CROSSTALK)

HUFFINGTON: Is it really...

KING: God thinks that? Does God say...

PRAGER: Does God think that Sweden was right in being neutral between Hitler and Churchill?

(CROSSTALK)

KING: Does God love the Swedish people?

PRAGER: Sweden was neutral in World War II.

KING: Does he love the Swedish people?

PRAGER: He loves the Swedish people.

KING: As much as he loves the Americans?

PRAGER: No, he loves people. In my opinion, he loves people based on their goodness. God doesn't know nations. God knows individuals.

KING: Well, then Swedish people are as good as American people.

PRAGER: Some are, some aren't.

(CROSSTALK)

HUFFINGTON: Dennis, this is really delusional. Dennis, really, this is truly delusional. At a time when we've had all...

PRAGER: Delusional?

HUFFINGTON: Yes, this is absolutely delusional, to say that -- to actually speak for God, as to who God likes and who he doesn't...

PRAGER: Who spoke for God? I didn't speak -- Larry asked me...

(CROSSTALK)

KING: We're way off topic here.

(CROSSTALK)

HUFFINGTON: Let us bring it down to...

PRAGER: Republicans believe in American exceptionalism.

(CROSSTALK)

HUFFINGTON: Let us bring it down to what this president is saying right now, actually, when he talks about North Korea. He looks to the Security Council of the United Nations to provide the diplomacy needed. So even the president doesn't believe that America, the exceptionalist position that you're taking, is the way to proceed with North Korea. He's not sitting down and talking with North Korea or Iran, the two other countries in the axis of evil. He's eschewing diplomacy. He doesn't exactly know what he's doing. And this is part of what is the general feeling of insecurity about this president.

KING: Let me get in another call. Baltimore City, Maryland. Hello.

CALLER: Hi, Larry. This is Baltimore. How are you doing this evening?

KING: Hi, what's the question?

CALLER: The question I would like to know to all the panel there, it's a very fired up panel and I think there is something that really needs to be addressed and it needs to be addressed right away...

KING: What is it?

CALLER: ... before the elections even go any further. Everybody in this country should have equal rights. Serving in the military, if you're two consenting adults, what you do in your bedroom is your business. You should be...

KING: What is the question?

CALLER: The question is why is it that Republicans are always pursuing the Democrats as being the wild, promiscuous party, because they want equal rights for everybody including...

KING: Amy Holmes, isn't it a conservative principle that we stay out of your bedroom?

HOLMES: I think what we say is government should not be meddling in, you know, personal private decisions. You know, that's part of why conservatives support smaller government, tax cuts to shrink government, so I agree with that.

SULLIVAN: The trouble is, they have increased the size of government. They trouble is, Amy, they've increased the size of government at a faster rate than any administration since FDR. Come on. At some point, you have got to say, stop the spending. And if you reelect them, you're going to reward their spending out of control.

And that's the problem. You're going to reward their failures in Iraq.

HOLMES: And I think (inaudible) we should be cutting government spending, but we are also cutting the deficit. And as George Bush...

SULLIVAN: Oh, you know that's not true, come on.

HOLMES: ... as he campaigned, tax cuts have the paradoxical result of actually cutting the deficits, because you're getting more tax revenue. JFK said that himself.

(CROSSTALK)

KING: We are all talking on top of -- hold on a second. I have got to take a broke and come back with some more moments. I think I'll bring this whole panel back again so I can rest. Don't go away.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, TALK SHOW HOST: This week, President Bush condemned Congressman Mark Foley, called for a thorough probe of the congressional page scandal. However, Foley says that a thorough probe is what got him in trouble in the first place.

ROBIN WILLIAMS, ACTOR: Hold on. I'm get an e-mail from Senator Foley. Hold on.

DAVID LETTERMAN, TALK SHOW HOST: Yes, OK.

WILLIAMS: I think he has the only American Online thing that says, you've got younger male.

JAY LENO, TALK SHOW HOST: It used to be a good thing in Washington when two congressmen were on the same page. Now, it's horrible.

(END VIDEO CLIP)

KING: We always see humor, don't we? Elk City, Oklahoma, hello.

CALLER: Yes, my question is, how would the Democrats, rather, be handling this situation if Mark Foley was a Democrat rather than a Republican?

KING: Ed Schultz?

SCHULTZ: Well, I think you are just going to have to trust the fact that the Democrats would not have supported him to run for reelection and certainly would have done the same thing in that situation as they did with Congressman Jefferson. They took him off Ways and Means right away when they found out that there was some wrongdoing.

Both parties have made mistakes over the years. Nobody is perfect. But in this situation, right now, it is very clear that the Republicans have done some serious misstepping, and of course the political counterpunch back is that, well, the Democrats have their problems too. The voters are just going to have to decide who they trust and who they believe at this point.

PRAGER: The political counterpunch is not that the Democrats have done the same things -- which is true, they have. The political counterpunch is that this is wildly exaggerated in its significance. It's bad what he did. That is clear. There is no...

SCHULTZ: Dennis, it's the cover-up.

PRAGER: All right. Fine. We'll wait until the investigation. It is quite minimal.

SCHULTZ: Fair enough.

PRAGER: "The Miami Herald" had the information. "The St. Petersburg Times" had the information.

SCHULTZ: Good conservative newspapers.

PRAGER: No, they're not conservative newspapers.

SCHULTZ: Good conservative newspapers, you're right.

(CROSSTALK)

SCHULTZ: Very much so.

PRAGER: "The Miami Herald?"

SCHULTZ: That's the same guy that went after Gary Hart. Come on. That's the same guy at the "Miami Herald" that went after Gary Hart, you know?

PRAGER: If you think "The Miami Herald" is conservative, then that is on national TV that you've said that. That's fair enough.

(CROSSTALK)

KING: Andrew Sullivan.

SULLIVAN: There's one question in people's minds: Have you had enough? Have you had enough of these people? Do you really want to reelect all these people? Do you not want to have any check on them? Have you had enough? Most people have.

HUFFINGTON: Getting back to the...

KING: Are you sure you're a conservative?

SULLIVAN: Absolutely. It's because I'm conservative...

(CROSSTALK)

SULLIVAN: I actually put conservative principles before power. Namely I actually want to control spending, keep government small, and win wars. I don't want to spend like there is no tomorrow and lose wars. That's not conservative.

SCHULTZ: You want to protect ports?

PRAGER: But this is how the Green Party lost it for the Democrats.

SCHULTZ: You want to protect the country?

HOLMES: But getting back to the caller's question...

(CROSSTALK)

KING: Hold on. Amy wants to get back to the caller.

HOLMES: Yes, getting back to the caller's question, the American public and a lot of polling shows that they think Democrats would have handled this situation exactly the same, and I would hope so. I would hope that they would ask for the resignation of a congressman behaving this badly, and contrary to what Ed was saying earlier, Dennis Hastert, the very weekend that this news came out, wrote a letter to the attorney general asking for the FBI to get involved and to have a thorough, full investigation, which suggests to me that Dennis Hastert...

SCHULTZ: The attorney general, the same guy that (inaudible) spying problem...

(CROSSTALK)

HUFFINGTON: The important issue here, Amy, is that Republicans are supposed to have the moral high ground when it comes to values. And it is the additional issue of hypocrisy that is really influencing what is going to happen in November.

And beyond that, these are not just the right/left issues. I mean, the key issues of this November election are going to be about accountability and who do you trust to keep us safer.

And on both these issues, the Republicans are losing at the moment.

SCHULTZ: Amy, can you tell me what your party has done for health care in the past six years? Can you tell me what Bill Frist has done, other than diagnose Terri Schiavo by videotape?

HOLMES: Yes, in fact, they passed a huge Medicare prescription drug plan for seniors to be able to get... SCHULTZ: And that was a sellout to the drug companies.

HOLMES: Well, you asked me what we have done for health care, and that is a huge example. One probably Andrew disapproves of.

SULLIVAN: Absolutely. And most Republicans disapproved, and had to have their arms twisted off through the night to get it passed, and it is going to bankrupt the next generation and you know it. And that's not responsible, and it is not conservative.

PRAGER: So, Andrew, was it responsible of the Democrats to oppose the president when he finally said we need to do something about Social Security?

SULLIVAN: It wasn't responsible of them either. I don't like -- I want to see a check on power.

PRAGER: Right, so you're a utopian.

SULLIVAN: No, I'm not a utopian.

PRAGER: No, no, no, check on power means nothing to me. Who will do better for the country on the basis of the principles you care about? Who's going to do that? Check on power is...

(CROSSTALK)

KING: Thank you...

(CROSSTALK)

KING: ... Ed Schultz and Amy Holmes, thank you all. We'll have you back again. We'll meet in the ring at the Madison Square Garden.

Anyway, tomorrow night, we'll have more details on the plane tragedy in New York yesterday. Right now, it's heading to New York. Anderson Cooper with "AC 360."

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