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CNN Crossfire

Presidential Candidates Face Off in Missouri

Aired October 08, 2004 - 16:30   ET

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


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


(BEGIN VIDEOTAPE)
ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala; on the right, Robert Novak and Tucker Carlson.

In the CROSSFIRE: It's just 4 1/2 hours until George Bush and John Kerry meet in Saint Louis. This second debate follows a week of verbal shots. Both candidates' supporters are confident.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: That's the standard for tonight's debate. Who will tell the American people the truth about Iraq? Who will tell the American people the truth about jobs here? There will be one candidate on that stage who meets that test and it will be the next president of the United States, John Kerry.

(CHEERING AND APPLAUSE)

LAURA BUSH, FIRST LADY: This Friday night in Saint Louis, the president will once again talk to Americans about his plans for making America safer and more prosperous and for making the world more secure. Americans will see the strong and thoughtful man that I have known for 27 years, a man who says what he means and does what he says.

ANNOUNCER: The stakes are rising. The rhetoric is heating up. Previewing the debates -- today on CROSSFIRE.

(END VIDEOTAPE)

ANNOUNCER: Live with CNN's Election Express from Washington University in Saint Louis, Paul Begala, and sitting in on the right, "National Review"'s Kate O'Beirne.

(CHEERING AND APPLAUSE)

PAUL BEGALA, CO-HOST: Hey, everybody.

Welcome to CROSSFIRE, live from the campus of Washington University in Saint Louis, where the students need a little extra money, mom and dad, for beer -- I mean books.

(LAUGHTER)

BEGALA: Well, in the first debate, John Kerry spanked George W. Bush like a pledge at the Deke house. The president's team say their poised for a comeback, claiming that the town hall format of tonight's debate is better suited to their man's strengths.

Joining me today to guest host in her CROSSFIRE debut, I think, is "National Review" editor and regular panelist on "CAPITAL GANG," Kate O'Beirne.

Kate, thank you for sitting in for Bob Novak, who is recovering quickly.

KATE O'BEIRNE, GUEST HOST: We're delighted to say, he's on the mend.

BEGALA: He is. He'll be back soon, but thank you for helping us out.

O'BEIRNE: Sure.

BEGALA: And now we will begin, as we always do, with the best little political briefing in television, our CROSSFIRE "Political Alert."

The economy needs to add about 150,000 jobs a month just to keep up with population growth. But the Labor Department reported today that our economy added only 96,000 jobs in September. On top of that, the government revised last month's job report downward by another 16,000 jobs. The nonpartisan Economic Policy Institute reports that for the past two quarters, the 12-month growth rate of the wage and salary component was the slowest ever recorded and even slightly behind inflation.

Moreover, consumer confidence has slipped to its lowest levels in months, oil prices at an all-time high. Health care costs are higher than ever. Now, all of this bad news presents a tough strategic choice for the president in tonight's debate. Does he deal with the reality and acknowledge that we need a new direction on the economy or does he continue to say everything is great, which is a winning message if you're running for president of the Fantasy Island?

O'BEIRNE: Paul, Paul, Paul, Paul, when Bill Clinton was running for reelection in 1996, the unemployment rate was 5.5 percent, virtually identical to the unemployment rate George Bush has. And you were one of the White House spinners calling it the miracle economy.

BEGALA: But he had created jobs. The net loss of jobs is something that has never happened to a president since Herbert Hoover.

O'BEIRNE: Two million jobs have been created over the past year.

(BELL RINGING)

O'BEIRNE: And I know you Democrats need really bad economic news, but you don't get it in these recent numbers.

John Kerry has outrageously referred to our wealth of allies in Iraq as the coalition of the bribed and coerced. At the same time, he indicts the administration for not relying enough on Russia, France and the United Nations to help us build a democracy there. Well, I wonder what Senator Kerry would have to say about the Duelfer report that details bribes paid by Saddam to those very countries he says we should have recruited to our cause. The report released this week describes a corrupt system devised by the Iraqi dictator to circumvent sanctions by making payoffs around the world and enriching himself from the oil-for-food program.

John Kerry says George Bush failed his so-called global test. It's hard to pass a global test, Paul, when the people grading it are being bribed to see that you flunk. France, China and Russia are all permanent members of the Security Council. They are the true coalition of the bribed, Paul.

BEGALA: Well, you raise a good point about the oil-for-food program. It ought to be investigated. We ought to find out what kind of criminality there was there, if any. I also want to know what Halliburton was doing selling oil field equipment to Saddam Hussein as part of that oil-for-food program. I think that, while probably not illegal, was deeply unpatriotic for Dick Cheney to be trading with the enemy.

(CROSSTALK)

BEGALA: Don't you agree?

O'BEIRNE: John Kerry's only plan for Iraq is a summit.

(BELL RINGING)

O'BEIRNE: It would be a summit of the bribed.

(LAUGHTER)

O'BEIRNE: They have been paid off to side with Saddam Hussein, Paul.

BEGALA: Well, President Bush's credibility is one of the major casualties of his invasion of Iraq. Here's a sampling of opinion from key swing states. "The Daytona Beach News Journal" says -- quote -- "The debates have exposed the alternative universe in which the Bush administration continues to dwell, despite mounting evidence that its interpretations of the war in Iraq are nowhere near reality."

"The Des Moines Register" in Iowa writes: "No, Mr. President, you don't seem to get it. Saddam had no weapons or materials to give."

In Ohio, "The Columbus Dispatch" says: "The Iraq policy shapes us as a disaster, but Bush and Cheney refuse to acknowledge mistakes."

And in Minnesota, "The Minneapolis Star-Tribune" concludes: "President Bush and Vice President Cheney are revealed as serial prevaricators, seriously undermining their case that they deserve four more years in office."

Pretty damning condemnation from around the country, Kate. O'BEIRNE: Paul, George Bush is doing well in every one of those states. Of course, unlike the liberal editorial writers, voters in Florida, Ohio, Minnesota continually give George Bush much higher ratings than John Kerry gets on being a strong leader, on fighting the war on terror, and, yes, even on fighting the war in Iraq, Paul.

BEGALA: But not on telling the truth. The president's credibility has taken a major hit in all of those swing states. And I think the fact that he continues to mislead us about Iraq is going to be his downfall in the election.

(BELL RINGING)

BEGALA: Well, sorry. Go ahead.

O'BEIRNE: Speaking of credibility, let's review John Kerry's shifting views on Iraq. The man who accuses George Bush of misleading us into war certainly has changed his tune.

In January of 2003, John Kerry talked about Saddam's deceit and consistent grabs for weapons of mass destruction. In October 2002, Kerry said, our nation is united in its determination to take away Saddam's deadly arsenal and that Saddam wanted to expand his arsenal to include nuclear weapons. In February of 2002, Kerry said Saddam was just buying time and playing a game. He was right.

In September '98, Kerry was saying the United Nations inspections region had been compromised, that Saddam Hussein was winning and had created sanction fatigue among our allies. Again, right. In fact, John Kerry was among the first to say in November 1997 that -- quote -- "This is not a matter about which there should be any debate whatsoever in the Security Council." You want to talk credibility, Pal?

BEGALA: It seems to me he had it exactly right. We should be tough on Saddam, but not go into some crazy war. I mean, we had him in a box. We had sanctions, inspections and bombings under Bill Clinton and under George Bush's father that worked. And it kept him from being a threat. George Bush is the one who blew up that box.

(BELL RINGING)

BEGALA: And now has us stuck in a quagmire.

O'BEIRNE: Paul, why was John Kerry misleading us about Saddam's weapons of mass destruction?

BEGALA: Well, he was -- he was just -- well, call him foolish for believing George W. Bush. I guess he won't do that again.

Well, tonight is round two. Who is going to win the slugfest here in Saint Louis? We'll preview the debate coming up next.

And then later, we'll have a special salute to our friends here at the Washington University in Saint Louis. You don't want to miss that with a very special guest that these students are waiting to see. (CHEERING AND APPLAUSE)

BEGALA: Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: Join Carville, Begala, Carlson and Novak in the CROSSFIRE. For free tickets to CROSSFIRE at the George Washington University, call 202-994-8CNN or visit our Web site. Now you can step into the CROSSFIRE.

(CHEERING AND APPLAUSE)

BEGALA: Welcome back to CROSSFIRE from Washington University in Saint Louis, site of tonight's big debate.

You know, it hasn't ban good week for President Bush. First, he got pimp-slapped by John Kerry in the last debate.

(CHEERING AND APPLAUSE)

BEGALA: Then Dick Cheney got caught fibbing about the National Prayer Breakfast. His only CIA report concluded Saddam had no weapons and no weapons program and no intent to share weapons with terrorists.

Top that all off with a bad job reports today and the president plainly has his work cut out for him in tonight's town hall. But Bush defenders note that the president connects well with real people, who will be asking questions tonight. And they say that they can't wait for another crack at John Kerry.

Joining us now for a discussion of what to expect from tonight's debate, Republican Senator Kit Bond of Missouri, who is kind enough to join from us the U.S. Capitol, and here on our set in Saint Louis, Democratic Congressman, my former boss and the biggest Cardinal fans in America, Dick Gephardt.

(CHEERING AND APPLAUSE)

BEGALA: Thank you both, guys.

You want to start us off?

O'BEIRNE: It doesn't surprise -- it doesn't surprise me that you are extremely popular in these parts. You are a likable, down-to- earth kind of guy. You're a Midwesterner through and through. You feel it coming now.

(LAUGHTER)

O'BEIRNE: So how is our elitist John Kerry, windsurfing, $8,000 bike-riding John Kerry, going to do in these parts tonight?

REP. RICHARD GEPHARDT (D), MISSOURI: Well, I'm not worried about John Kerry connecting with voters here and voters all across the country. He did a great job in the first debate in Florida. He connected with people. He talked about the issues they care about. And he looked and acted presidential, which is what I think a lot of people were looking for. So I look for a good debate tonight for John Kerry.

O'BEIRNE: Why has John -- why has John Kerry's fortunes slipped here in Missouri? As you know, he's taking his ads off the air. (INAUDIBLE)

GEPHARDT: I really think he's doing fine here.

I think the polls here are tracking the rest of the country. Missouri is a bellwether state. It's not the Show-Me State for nothing. People always hold back their judgment. But I think you're going to see the polls here do what they're doing in the rest of the country. I think this thing is a dead heed in Missouri right now.

BEGALA: Senator Bond, let me show you how our president responded to yesterday's report from the CIA that said that Saddam had no weapons program and no intent to share weapons with terrorists. Here's our president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He retained the knowledge, the materials, the means, and the intent to produce weapons of mass destruction. And he could have passed that knowledge onto our terrorist enemies.

(END VIDEO CLIP)

BEGALA: Senator, a pretty good point, if it were true. But let me read to you what the Duelfer report says. The report he was referring to says the exact opposite of what he claimed.

Duelfer said investigators -- this is the "L.A. Times" yesterday reported this -- Duelfer said investigators found no evidence that Hussein had passed illicit weapons material to al Qaeda or other terrorist organizations or had any intent to do so."

And so the question is, is the president dishonest or is he delusional?

SEN. CHRISTOPHER BOND (R), MISSOURI: Well, unfortunately you're trying to pick and choose out of the Duelfer report.

I happen to serve on the Intelligence Commission. I have been asking Duelfer questions. I have been asking David Kay questions. There are some things that we can tell you. And we can tell you that David Kay in his public statement, the predecessor to Mr. Duelfer, said that Iraq was a far more dangerous place even than we knew, because this was a country that had developed and used weapons of mass destruction.

It was a chaotic country which was overrun by terrorists anxious to get their hands on weapons of mass destruction. And had we not moved, had the president not had the guts to go ahead without waiting for permission from France, which was dealing with Saddam under the table, as the Duelfer report says, we could have been in a position where some of those chemical and biological weapons would be in the hands of terrorists.

There may be some...

(CROSSTALK)

BEGALA: You're not worried about the...

BOND: Go ahead. Go ahead.

BEGALA: You're not worried about the president's credibility at all?

BOND: No.

(CROSSTALK)

BEGALA: So you're not worried about his credibility when he says one thing and the report says another?

BOND: If you read the whole report, if you read all the reports that I have, what the president said was absolutely -- was absolutely accurate.

There's hundreds and hundreds of pages of the Duelfer report. I've read through all of them. I have seen all of the different finds. I asked Mr. Duelfer specifically about what happened to the weapons of mass destruction. And he said we don't know for sure. But there was clear evidence that there had been evidence destroyed. They don't know what happened to it.

But David Kay's publicly released report on the Iraqi Survey Group said that he had the intention. He had the people. He had the facilities. And he had the intention to restart his program for mustard gas, and ricin, nerve gas, anthrax were all possibilities that he wanted to be able to produce. And terrorists wanted to get them. That's why we're safer off.

And I hope that the president asks Senator Kerry not only to explain his inconsistencies in the campaign, but his consistent record of opposing military efforts and even slashing the intelligence budget in the Senate.

(CROSSTALK)

BEGALA: Senator, let me let Kate O'Beirne get back in here.

(CROSSTALK)

O'BEIRNE: Thank you, Senator. Thank you.

Congressman Gephardt, the latest Swift Boat Veterans ads are running here in Missouri, these ads featuring POW wives who will never forget what John Kerry said in his '71 testimony. Do you understand why Missouri vets are still angry about John Kerry so slandering them in that testimony?

GEPHARDT: I respect everybody's judgment. And I'm sure John Kerry does, too.

He has said he was speaking from his heart then. And he understand that people disagree with him. And that's the American way. But there are a lot of veterans here in Missouri who are supporting John Kerry because he served in Vietnam honorably and won medals and served our country with bravery.

O'BEIRNE: Now, at the Democratic Convention in Boston, all we heard about his experience was Vietnam. And this week, John Edwards highlighted his experience as a prosecutor. Why won't the Democrats talk about John Kerry's 20-year record in the Senate?

GEPHARDT: I talk about it all the time, because I...

O'BEIRNE: Oh, do you?

GEPHARDT: I do. I served with him. I worked with him on a lot of issues. He was a real effective senator on education, on the environment, on jobs, on health care. His health care plan that he's talking about in this campaign really came out of things we did together in the Senate and the House. So...

O'BEIRNE: You do a better job talking about it than he does.

(LAUGHTER)

O'BEIRNE: He wants to forget about it. You've got...

(CROSSTALK)

GEPHARDT: No. I think it's a great record. And I think he'll be talking about it a lot.

BEGALA: Senator, briefly, we got a new jobs report out today. The country needs 150,000 jobs just to stay even. We only got 96,000 and a third of them were government jobs. That's bad news, isn't it?

BOND: I think the good news is, we have created 1.9 million jobs since last August.

And the other thing, I'm delighted that Dick Gephardt has seen some productive work by Senator Kerry. I have only served with him 18 years and I haven't seen him doing anything of substance in the Senate.

(LAUGHTER)

BOND: So maybe he was over working on the House side. I'm sorry I missed it.

But, Dick, I'm glad that you saw it, because I've never seen it.

O'BEIRNE: And you served directly with him, right on his boat, so to speak?

BOND: Yes, unfortunately, yes. I sure did.

(LAUGHTER)

BOND: And I know both of them well.

(CROSSTALK)

BOND: And I hope the people of Missouri get a chance to know both of them. And I think they'll vote for George Bush.

BEGALA: Senator, I think you ought to be kinder to him. He might veto some of your legislation in a couple of months.

(LAUGHTER)

BOND: Yes, when -- that will -- that will be the day.

O'BEIRNE: It was at a town hall meeting that John Kerry famously said, I voted for the $87 billion before I voted against it. Are we going to get more clear-cut answers like that out of John Kerry at tonight's town hall?

GEPHARDT: Well, I think he said in the first debate that he probably didn't say that the right way or made a mistake in the way he said it.

John Kerry supported this effort to give the president the authority to go to war. He wanted to pay for it out of the tax cut that went to the wealthiest Americans. I think that's a reasonable position.

O'BEIRNE: You don't see it as the wrong vote at the wrong time in the wrong place?

(LAUGHTER)

GEPHARDT: No, I don't. I think it was the right thing -- that he felt it was the right thing to do.

But, you know, the question here is not whether we should go to Iraq. The question is how the president went to Iraq. Did he do it at the right time? Did he give the inspections time enough to get us the allies that we needed? And are we not now focused so much on Iraq with money and people that we can't do the other things against Saddam -- against Osama bin Laden and the other terrorists around the world? That's the real issue John Kerry is trying to make. And I think he's right.

BEGALA: Amen. I'm sorry to cut you off, Congressman Gephardt. We are going to have to take a break.

Senator Bond, keep your seat as well.

And next, our guests will come back and enter the "Rapid Fire," where we'll fire questions at them even faster than President Bush can say all is well in Iraq.

And then, after the break, Martha Stewart is behind bars. But Wolf Blitzer is still a free man. He'll give us all the details of Martha's new home just after this.

(CHEERING AND APPLAUSE)

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer reporting from the campus of the Washington University in Saint Louis.

Coming up at the top of the hour, an Israeli official says the bombings that killed at least 29 people in Egypt yesterday bear the hallmarks of al Qaeda. And another hostage is beheaded in Iraq. And Iraqi officials claim a U.S. airstrike in Fallujah killed 14 members of a wedding party. And Martha Stewart begins her term in a federal prison in Alderson, West Virginia. I'll ask a former inmate what she can expect.

All those stories, much more, only minutes away on "WOLF BLITZER REPORTS."

Now back to CROSSFIRE.

(CHEERING AND APPLAUSE)

BEGALA: Thank you, Wolf, for that update. We look forward to your report at the top of the hour.

Here in CROSSFIRE now, it's time for "Rapid Fire," where the questions and answers come faster than a Wash U. student can say, go, Bears. Let's hear it. Go, Bears.

(CHEERING AND APPLAUSE)

BEGALA: There we go.

With us from Washington, Senator Kit Bond of Missouri. And here with us in Saint Louis, Democratic Congressman Richard Gephardt of Saint Louis.

Kate.

O'BEIRNE: Congressman, John Kerry had earlier said, to vote against the $87 billion to fund our troops in Iraq would be irresponsible. You supported the resolution. You supported that appropriations bill for them. He was right. It would be irresponsible. It was irresponsible to vote no, wasn't it?

GEPHARDT: Well, as I said before, he wanted to take that money out of the tax cut for the wealthiest Americans. And that's a defensible and a good position, because, you know, I've said to the president many times, we have got a big problem here. We have got to pay for this. How are we going to pay for it? And he still hasn't done it. O'BEIRNE: You wouldn't have done it.

BEGALA: Senator Bond, tonight in the debate, will President Bush admit a single mistake or will he continue this arrogant act of infallibility?

BOND: Well, I think that calling it an arrogant act is just totally bullheaded Democratic horse feathers.

President Bush has had a consistent plan. He has -- obviously, he has moved forward in a very difficult area. There was lots of information that we did not have on what was going on in Iraq because we had decimated our intelligence budget. And John Kerry in the '90s led the budget to cut the intelligence battle -- budget.

(CROSSTALK)

BOND: We didn't have any spies on the ground. We didn't have enough good intelligence.

(BELL RINGING)

O'BEIRNE: Thank you.

BEGALA: Thank you very much.

One final prediction, Congressman Gephardt. Who is going to win the World Series?

GEPHARDT: Let's see.

(LAUGHTER)

GEPHARDT: The St. Louis Cardinals.

(CHEERING AND APPLAUSE)

BEGALA: Dick Gephardt, congressman from St. Louis, Missouri, Kit Bond, senator from Missouri, joining us from the United States Capitol.

O'BEIRNE: I have a question.

BEGALA: Thank you both.

And when we come back, we're going to show you a side of this campus that the politicians won't get to see.

Stay with us.

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

BEGALA: Welcome back to CROSSFIRE from Washington University, where it's been an awfully big week here on campus. The Nobel Prize was awarded to a visiting member of the faculty of the School of Medicine here.

CROSSFIRE of course set up on here campus, where I made my crowd- surfing debut, if you were watching yesterday.

(CHEERING AND APPLAUSE)

BEGALA: And, oh, yes, a couple of politicians are going to be here tonight to talk about a couple of issues.

O'BEIRNE: And we might have a campaign launch. There's a very disturbing "Paul for president" sign back there I have spotted.

(LAUGHTER)

O'BEIRNE: And I only hope that there are a lot of Pauls around here that I'm unaware of.

BEGALA: It's clearly one of the students soon to win a Nobel Prize. There we go.

(APPLAUSE)

BEGALA: And we have with us the mascot of the Washington University Bears, the bear himself, my kind of CROSSFIRE guest. He's actually mute. He's not allowed to talk.

(LAUGHTER)

(CHEERING AND APPLAUSE)

BEGALA: So a big week, though. They won the Nobel Prize here.

O'BEIRNE: He told me he can barely stand John Kerry. He confided.

BEGALA: Now, who is going to -- is John Kerry going to win the election, bear?

There we go. All right.

(CHEERING AND APPLAUSE)

BEGALA: How about George W. Bush?

(CHEERING AND APPLAUSE)

O'BEIRNE: I'm no -- I'm no expert.

BEGALA: There we go. From the left, I am Paul Begala with the Democratic bear.

That's it for CROSSFIRE.

O'BEIRNE: It's no Texas bear. I'll tell you that much.

(LAUGHTER) BEGALA: For Kate O'Beirne, I'm Paul Begala.

"WOLF BLITZER REPORTS" starts right now.

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Aired October 8, 2004 - 16:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala; on the right, Robert Novak and Tucker Carlson.

In the CROSSFIRE: It's just 4 1/2 hours until George Bush and John Kerry meet in Saint Louis. This second debate follows a week of verbal shots. Both candidates' supporters are confident.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: That's the standard for tonight's debate. Who will tell the American people the truth about Iraq? Who will tell the American people the truth about jobs here? There will be one candidate on that stage who meets that test and it will be the next president of the United States, John Kerry.

(CHEERING AND APPLAUSE)

LAURA BUSH, FIRST LADY: This Friday night in Saint Louis, the president will once again talk to Americans about his plans for making America safer and more prosperous and for making the world more secure. Americans will see the strong and thoughtful man that I have known for 27 years, a man who says what he means and does what he says.

ANNOUNCER: The stakes are rising. The rhetoric is heating up. Previewing the debates -- today on CROSSFIRE.

(END VIDEOTAPE)

ANNOUNCER: Live with CNN's Election Express from Washington University in Saint Louis, Paul Begala, and sitting in on the right, "National Review"'s Kate O'Beirne.

(CHEERING AND APPLAUSE)

PAUL BEGALA, CO-HOST: Hey, everybody.

Welcome to CROSSFIRE, live from the campus of Washington University in Saint Louis, where the students need a little extra money, mom and dad, for beer -- I mean books.

(LAUGHTER)

BEGALA: Well, in the first debate, John Kerry spanked George W. Bush like a pledge at the Deke house. The president's team say their poised for a comeback, claiming that the town hall format of tonight's debate is better suited to their man's strengths.

Joining me today to guest host in her CROSSFIRE debut, I think, is "National Review" editor and regular panelist on "CAPITAL GANG," Kate O'Beirne.

Kate, thank you for sitting in for Bob Novak, who is recovering quickly.

KATE O'BEIRNE, GUEST HOST: We're delighted to say, he's on the mend.

BEGALA: He is. He'll be back soon, but thank you for helping us out.

O'BEIRNE: Sure.

BEGALA: And now we will begin, as we always do, with the best little political briefing in television, our CROSSFIRE "Political Alert."

The economy needs to add about 150,000 jobs a month just to keep up with population growth. But the Labor Department reported today that our economy added only 96,000 jobs in September. On top of that, the government revised last month's job report downward by another 16,000 jobs. The nonpartisan Economic Policy Institute reports that for the past two quarters, the 12-month growth rate of the wage and salary component was the slowest ever recorded and even slightly behind inflation.

Moreover, consumer confidence has slipped to its lowest levels in months, oil prices at an all-time high. Health care costs are higher than ever. Now, all of this bad news presents a tough strategic choice for the president in tonight's debate. Does he deal with the reality and acknowledge that we need a new direction on the economy or does he continue to say everything is great, which is a winning message if you're running for president of the Fantasy Island?

O'BEIRNE: Paul, Paul, Paul, Paul, when Bill Clinton was running for reelection in 1996, the unemployment rate was 5.5 percent, virtually identical to the unemployment rate George Bush has. And you were one of the White House spinners calling it the miracle economy.

BEGALA: But he had created jobs. The net loss of jobs is something that has never happened to a president since Herbert Hoover.

O'BEIRNE: Two million jobs have been created over the past year.

(BELL RINGING)

O'BEIRNE: And I know you Democrats need really bad economic news, but you don't get it in these recent numbers.

John Kerry has outrageously referred to our wealth of allies in Iraq as the coalition of the bribed and coerced. At the same time, he indicts the administration for not relying enough on Russia, France and the United Nations to help us build a democracy there. Well, I wonder what Senator Kerry would have to say about the Duelfer report that details bribes paid by Saddam to those very countries he says we should have recruited to our cause. The report released this week describes a corrupt system devised by the Iraqi dictator to circumvent sanctions by making payoffs around the world and enriching himself from the oil-for-food program.

John Kerry says George Bush failed his so-called global test. It's hard to pass a global test, Paul, when the people grading it are being bribed to see that you flunk. France, China and Russia are all permanent members of the Security Council. They are the true coalition of the bribed, Paul.

BEGALA: Well, you raise a good point about the oil-for-food program. It ought to be investigated. We ought to find out what kind of criminality there was there, if any. I also want to know what Halliburton was doing selling oil field equipment to Saddam Hussein as part of that oil-for-food program. I think that, while probably not illegal, was deeply unpatriotic for Dick Cheney to be trading with the enemy.

(CROSSTALK)

BEGALA: Don't you agree?

O'BEIRNE: John Kerry's only plan for Iraq is a summit.

(BELL RINGING)

O'BEIRNE: It would be a summit of the bribed.

(LAUGHTER)

O'BEIRNE: They have been paid off to side with Saddam Hussein, Paul.

BEGALA: Well, President Bush's credibility is one of the major casualties of his invasion of Iraq. Here's a sampling of opinion from key swing states. "The Daytona Beach News Journal" says -- quote -- "The debates have exposed the alternative universe in which the Bush administration continues to dwell, despite mounting evidence that its interpretations of the war in Iraq are nowhere near reality."

"The Des Moines Register" in Iowa writes: "No, Mr. President, you don't seem to get it. Saddam had no weapons or materials to give."

In Ohio, "The Columbus Dispatch" says: "The Iraq policy shapes us as a disaster, but Bush and Cheney refuse to acknowledge mistakes."

And in Minnesota, "The Minneapolis Star-Tribune" concludes: "President Bush and Vice President Cheney are revealed as serial prevaricators, seriously undermining their case that they deserve four more years in office."

Pretty damning condemnation from around the country, Kate. O'BEIRNE: Paul, George Bush is doing well in every one of those states. Of course, unlike the liberal editorial writers, voters in Florida, Ohio, Minnesota continually give George Bush much higher ratings than John Kerry gets on being a strong leader, on fighting the war on terror, and, yes, even on fighting the war in Iraq, Paul.

BEGALA: But not on telling the truth. The president's credibility has taken a major hit in all of those swing states. And I think the fact that he continues to mislead us about Iraq is going to be his downfall in the election.

(BELL RINGING)

BEGALA: Well, sorry. Go ahead.

O'BEIRNE: Speaking of credibility, let's review John Kerry's shifting views on Iraq. The man who accuses George Bush of misleading us into war certainly has changed his tune.

In January of 2003, John Kerry talked about Saddam's deceit and consistent grabs for weapons of mass destruction. In October 2002, Kerry said, our nation is united in its determination to take away Saddam's deadly arsenal and that Saddam wanted to expand his arsenal to include nuclear weapons. In February of 2002, Kerry said Saddam was just buying time and playing a game. He was right.

In September '98, Kerry was saying the United Nations inspections region had been compromised, that Saddam Hussein was winning and had created sanction fatigue among our allies. Again, right. In fact, John Kerry was among the first to say in November 1997 that -- quote -- "This is not a matter about which there should be any debate whatsoever in the Security Council." You want to talk credibility, Pal?

BEGALA: It seems to me he had it exactly right. We should be tough on Saddam, but not go into some crazy war. I mean, we had him in a box. We had sanctions, inspections and bombings under Bill Clinton and under George Bush's father that worked. And it kept him from being a threat. George Bush is the one who blew up that box.

(BELL RINGING)

BEGALA: And now has us stuck in a quagmire.

O'BEIRNE: Paul, why was John Kerry misleading us about Saddam's weapons of mass destruction?

BEGALA: Well, he was -- he was just -- well, call him foolish for believing George W. Bush. I guess he won't do that again.

Well, tonight is round two. Who is going to win the slugfest here in Saint Louis? We'll preview the debate coming up next.

And then later, we'll have a special salute to our friends here at the Washington University in Saint Louis. You don't want to miss that with a very special guest that these students are waiting to see. (CHEERING AND APPLAUSE)

BEGALA: Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: Join Carville, Begala, Carlson and Novak in the CROSSFIRE. For free tickets to CROSSFIRE at the George Washington University, call 202-994-8CNN or visit our Web site. Now you can step into the CROSSFIRE.

(CHEERING AND APPLAUSE)

BEGALA: Welcome back to CROSSFIRE from Washington University in Saint Louis, site of tonight's big debate.

You know, it hasn't ban good week for President Bush. First, he got pimp-slapped by John Kerry in the last debate.

(CHEERING AND APPLAUSE)

BEGALA: Then Dick Cheney got caught fibbing about the National Prayer Breakfast. His only CIA report concluded Saddam had no weapons and no weapons program and no intent to share weapons with terrorists.

Top that all off with a bad job reports today and the president plainly has his work cut out for him in tonight's town hall. But Bush defenders note that the president connects well with real people, who will be asking questions tonight. And they say that they can't wait for another crack at John Kerry.

Joining us now for a discussion of what to expect from tonight's debate, Republican Senator Kit Bond of Missouri, who is kind enough to join from us the U.S. Capitol, and here on our set in Saint Louis, Democratic Congressman, my former boss and the biggest Cardinal fans in America, Dick Gephardt.

(CHEERING AND APPLAUSE)

BEGALA: Thank you both, guys.

You want to start us off?

O'BEIRNE: It doesn't surprise -- it doesn't surprise me that you are extremely popular in these parts. You are a likable, down-to- earth kind of guy. You're a Midwesterner through and through. You feel it coming now.

(LAUGHTER)

O'BEIRNE: So how is our elitist John Kerry, windsurfing, $8,000 bike-riding John Kerry, going to do in these parts tonight?

REP. RICHARD GEPHARDT (D), MISSOURI: Well, I'm not worried about John Kerry connecting with voters here and voters all across the country. He did a great job in the first debate in Florida. He connected with people. He talked about the issues they care about. And he looked and acted presidential, which is what I think a lot of people were looking for. So I look for a good debate tonight for John Kerry.

O'BEIRNE: Why has John -- why has John Kerry's fortunes slipped here in Missouri? As you know, he's taking his ads off the air. (INAUDIBLE)

GEPHARDT: I really think he's doing fine here.

I think the polls here are tracking the rest of the country. Missouri is a bellwether state. It's not the Show-Me State for nothing. People always hold back their judgment. But I think you're going to see the polls here do what they're doing in the rest of the country. I think this thing is a dead heed in Missouri right now.

BEGALA: Senator Bond, let me show you how our president responded to yesterday's report from the CIA that said that Saddam had no weapons program and no intent to share weapons with terrorists. Here's our president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He retained the knowledge, the materials, the means, and the intent to produce weapons of mass destruction. And he could have passed that knowledge onto our terrorist enemies.

(END VIDEO CLIP)

BEGALA: Senator, a pretty good point, if it were true. But let me read to you what the Duelfer report says. The report he was referring to says the exact opposite of what he claimed.

Duelfer said investigators -- this is the "L.A. Times" yesterday reported this -- Duelfer said investigators found no evidence that Hussein had passed illicit weapons material to al Qaeda or other terrorist organizations or had any intent to do so."

And so the question is, is the president dishonest or is he delusional?

SEN. CHRISTOPHER BOND (R), MISSOURI: Well, unfortunately you're trying to pick and choose out of the Duelfer report.

I happen to serve on the Intelligence Commission. I have been asking Duelfer questions. I have been asking David Kay questions. There are some things that we can tell you. And we can tell you that David Kay in his public statement, the predecessor to Mr. Duelfer, said that Iraq was a far more dangerous place even than we knew, because this was a country that had developed and used weapons of mass destruction.

It was a chaotic country which was overrun by terrorists anxious to get their hands on weapons of mass destruction. And had we not moved, had the president not had the guts to go ahead without waiting for permission from France, which was dealing with Saddam under the table, as the Duelfer report says, we could have been in a position where some of those chemical and biological weapons would be in the hands of terrorists.

There may be some...

(CROSSTALK)

BEGALA: You're not worried about the...

BOND: Go ahead. Go ahead.

BEGALA: You're not worried about the president's credibility at all?

BOND: No.

(CROSSTALK)

BEGALA: So you're not worried about his credibility when he says one thing and the report says another?

BOND: If you read the whole report, if you read all the reports that I have, what the president said was absolutely -- was absolutely accurate.

There's hundreds and hundreds of pages of the Duelfer report. I've read through all of them. I have seen all of the different finds. I asked Mr. Duelfer specifically about what happened to the weapons of mass destruction. And he said we don't know for sure. But there was clear evidence that there had been evidence destroyed. They don't know what happened to it.

But David Kay's publicly released report on the Iraqi Survey Group said that he had the intention. He had the people. He had the facilities. And he had the intention to restart his program for mustard gas, and ricin, nerve gas, anthrax were all possibilities that he wanted to be able to produce. And terrorists wanted to get them. That's why we're safer off.

And I hope that the president asks Senator Kerry not only to explain his inconsistencies in the campaign, but his consistent record of opposing military efforts and even slashing the intelligence budget in the Senate.

(CROSSTALK)

BEGALA: Senator, let me let Kate O'Beirne get back in here.

(CROSSTALK)

O'BEIRNE: Thank you, Senator. Thank you.

Congressman Gephardt, the latest Swift Boat Veterans ads are running here in Missouri, these ads featuring POW wives who will never forget what John Kerry said in his '71 testimony. Do you understand why Missouri vets are still angry about John Kerry so slandering them in that testimony?

GEPHARDT: I respect everybody's judgment. And I'm sure John Kerry does, too.

He has said he was speaking from his heart then. And he understand that people disagree with him. And that's the American way. But there are a lot of veterans here in Missouri who are supporting John Kerry because he served in Vietnam honorably and won medals and served our country with bravery.

O'BEIRNE: Now, at the Democratic Convention in Boston, all we heard about his experience was Vietnam. And this week, John Edwards highlighted his experience as a prosecutor. Why won't the Democrats talk about John Kerry's 20-year record in the Senate?

GEPHARDT: I talk about it all the time, because I...

O'BEIRNE: Oh, do you?

GEPHARDT: I do. I served with him. I worked with him on a lot of issues. He was a real effective senator on education, on the environment, on jobs, on health care. His health care plan that he's talking about in this campaign really came out of things we did together in the Senate and the House. So...

O'BEIRNE: You do a better job talking about it than he does.

(LAUGHTER)

O'BEIRNE: He wants to forget about it. You've got...

(CROSSTALK)

GEPHARDT: No. I think it's a great record. And I think he'll be talking about it a lot.

BEGALA: Senator, briefly, we got a new jobs report out today. The country needs 150,000 jobs just to stay even. We only got 96,000 and a third of them were government jobs. That's bad news, isn't it?

BOND: I think the good news is, we have created 1.9 million jobs since last August.

And the other thing, I'm delighted that Dick Gephardt has seen some productive work by Senator Kerry. I have only served with him 18 years and I haven't seen him doing anything of substance in the Senate.

(LAUGHTER)

BOND: So maybe he was over working on the House side. I'm sorry I missed it.

But, Dick, I'm glad that you saw it, because I've never seen it.

O'BEIRNE: And you served directly with him, right on his boat, so to speak?

BOND: Yes, unfortunately, yes. I sure did.

(LAUGHTER)

BOND: And I know both of them well.

(CROSSTALK)

BOND: And I hope the people of Missouri get a chance to know both of them. And I think they'll vote for George Bush.

BEGALA: Senator, I think you ought to be kinder to him. He might veto some of your legislation in a couple of months.

(LAUGHTER)

BOND: Yes, when -- that will -- that will be the day.

O'BEIRNE: It was at a town hall meeting that John Kerry famously said, I voted for the $87 billion before I voted against it. Are we going to get more clear-cut answers like that out of John Kerry at tonight's town hall?

GEPHARDT: Well, I think he said in the first debate that he probably didn't say that the right way or made a mistake in the way he said it.

John Kerry supported this effort to give the president the authority to go to war. He wanted to pay for it out of the tax cut that went to the wealthiest Americans. I think that's a reasonable position.

O'BEIRNE: You don't see it as the wrong vote at the wrong time in the wrong place?

(LAUGHTER)

GEPHARDT: No, I don't. I think it was the right thing -- that he felt it was the right thing to do.

But, you know, the question here is not whether we should go to Iraq. The question is how the president went to Iraq. Did he do it at the right time? Did he give the inspections time enough to get us the allies that we needed? And are we not now focused so much on Iraq with money and people that we can't do the other things against Saddam -- against Osama bin Laden and the other terrorists around the world? That's the real issue John Kerry is trying to make. And I think he's right.

BEGALA: Amen. I'm sorry to cut you off, Congressman Gephardt. We are going to have to take a break.

Senator Bond, keep your seat as well.

And next, our guests will come back and enter the "Rapid Fire," where we'll fire questions at them even faster than President Bush can say all is well in Iraq.

And then, after the break, Martha Stewart is behind bars. But Wolf Blitzer is still a free man. He'll give us all the details of Martha's new home just after this.

(CHEERING AND APPLAUSE)

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer reporting from the campus of the Washington University in Saint Louis.

Coming up at the top of the hour, an Israeli official says the bombings that killed at least 29 people in Egypt yesterday bear the hallmarks of al Qaeda. And another hostage is beheaded in Iraq. And Iraqi officials claim a U.S. airstrike in Fallujah killed 14 members of a wedding party. And Martha Stewart begins her term in a federal prison in Alderson, West Virginia. I'll ask a former inmate what she can expect.

All those stories, much more, only minutes away on "WOLF BLITZER REPORTS."

Now back to CROSSFIRE.

(CHEERING AND APPLAUSE)

BEGALA: Thank you, Wolf, for that update. We look forward to your report at the top of the hour.

Here in CROSSFIRE now, it's time for "Rapid Fire," where the questions and answers come faster than a Wash U. student can say, go, Bears. Let's hear it. Go, Bears.

(CHEERING AND APPLAUSE)

BEGALA: There we go.

With us from Washington, Senator Kit Bond of Missouri. And here with us in Saint Louis, Democratic Congressman Richard Gephardt of Saint Louis.

Kate.

O'BEIRNE: Congressman, John Kerry had earlier said, to vote against the $87 billion to fund our troops in Iraq would be irresponsible. You supported the resolution. You supported that appropriations bill for them. He was right. It would be irresponsible. It was irresponsible to vote no, wasn't it?

GEPHARDT: Well, as I said before, he wanted to take that money out of the tax cut for the wealthiest Americans. And that's a defensible and a good position, because, you know, I've said to the president many times, we have got a big problem here. We have got to pay for this. How are we going to pay for it? And he still hasn't done it. O'BEIRNE: You wouldn't have done it.

BEGALA: Senator Bond, tonight in the debate, will President Bush admit a single mistake or will he continue this arrogant act of infallibility?

BOND: Well, I think that calling it an arrogant act is just totally bullheaded Democratic horse feathers.

President Bush has had a consistent plan. He has -- obviously, he has moved forward in a very difficult area. There was lots of information that we did not have on what was going on in Iraq because we had decimated our intelligence budget. And John Kerry in the '90s led the budget to cut the intelligence battle -- budget.

(CROSSTALK)

BOND: We didn't have any spies on the ground. We didn't have enough good intelligence.

(BELL RINGING)

O'BEIRNE: Thank you.

BEGALA: Thank you very much.

One final prediction, Congressman Gephardt. Who is going to win the World Series?

GEPHARDT: Let's see.

(LAUGHTER)

GEPHARDT: The St. Louis Cardinals.

(CHEERING AND APPLAUSE)

BEGALA: Dick Gephardt, congressman from St. Louis, Missouri, Kit Bond, senator from Missouri, joining us from the United States Capitol.

O'BEIRNE: I have a question.

BEGALA: Thank you both.

And when we come back, we're going to show you a side of this campus that the politicians won't get to see.

Stay with us.

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

BEGALA: Welcome back to CROSSFIRE from Washington University, where it's been an awfully big week here on campus. The Nobel Prize was awarded to a visiting member of the faculty of the School of Medicine here.

CROSSFIRE of course set up on here campus, where I made my crowd- surfing debut, if you were watching yesterday.

(CHEERING AND APPLAUSE)

BEGALA: And, oh, yes, a couple of politicians are going to be here tonight to talk about a couple of issues.

O'BEIRNE: And we might have a campaign launch. There's a very disturbing "Paul for president" sign back there I have spotted.

(LAUGHTER)

O'BEIRNE: And I only hope that there are a lot of Pauls around here that I'm unaware of.

BEGALA: It's clearly one of the students soon to win a Nobel Prize. There we go.

(APPLAUSE)

BEGALA: And we have with us the mascot of the Washington University Bears, the bear himself, my kind of CROSSFIRE guest. He's actually mute. He's not allowed to talk.

(LAUGHTER)

(CHEERING AND APPLAUSE)

BEGALA: So a big week, though. They won the Nobel Prize here.

O'BEIRNE: He told me he can barely stand John Kerry. He confided.

BEGALA: Now, who is going to -- is John Kerry going to win the election, bear?

There we go. All right.

(CHEERING AND APPLAUSE)

BEGALA: How about George W. Bush?

(CHEERING AND APPLAUSE)

O'BEIRNE: I'm no -- I'm no expert.

BEGALA: There we go. From the left, I am Paul Begala with the Democratic bear.

That's it for CROSSFIRE.

O'BEIRNE: It's no Texas bear. I'll tell you that much.

(LAUGHTER) BEGALA: For Kate O'Beirne, I'm Paul Begala.

"WOLF BLITZER REPORTS" starts right now.

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