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The Lead with Jake Tapper

Supreme Court Upholds Affirmative Action; Separate Versions of Medicaid Reform Pass House, Senate; Dean Announces Run for Presidency

Aired June 28, 2003 - 19:00 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.

ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to THE CAPITAL GANG.

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

The Supreme Court in a five-to-four vote affirmed the constitutionality of race as a factor in admissions at the University of Michigan Law School.

The majority opinion, by Justice Sandra Day O'Connor, said, quote, "Effective participation by members of all racial and ethnic groups in the civic life of our nation is essential if the dream of one nation, indivisible, is to be realized," end quote.

Dissenting, Justice Clarence Thomas said, quote, "The majority upholds the law school's racial discrimination not be interpreting the people's Constitution but by responding to a faddish slogan of the cognoscenti," end quote.

The high court next ruled six to three against the Texas sodomy law. Speaking for the majority, Justice Anthony Kennedy said of the high court's past support of antisodomy laws, quote, "Its continuance as precedent demeans the lives of homosexual persons," end quote.

The dissent by Justice Antonin Scalia said, quote, "The court has taken sides in the culture war," end quote.

Kate O'Beirne, what message is -- or messages is the Supreme Court sending in these two decisions?

KATE O'BEIRNE, CAPITAL GANG: Well, I think one overriding message is clearly for the majority in these cases on this Supreme Court. The Constitution doesn't just live, it mutates. And the reason why Justice Sandra Day O'Connor is so key to these decisions is, she judges on such an ad hoc basis. She's not guided by either clear legal principles, because she changes them over time, or by precedent.

It also tells us that the courts, as subject to elite opinion, as fellow elites in the culture, the public really doesn't like racial preferences. They support affirmative action, but not race preferences, although the elites do. And they, of course, upheld race preferences in the Michigan case, not affirmative action. And it also says that if something becomes controversial, like the antisodomy laws, they'll change their precedent, in just 17 years ago. They're not content to leave that to the democratic process. People have changed their minds, which is why only 13 states have such laws, and they're largely unenforced. But they want to jump into that kind of democratic wrangling with a tough issue and preempt the public's action.

SHIELDS: We are blessed here on THE CAPITAL GANG with two women attorneys. Kate O'Beirne, having heard, now about Margaret Carlson?

MARGARET CARLSON, CAPITAL GANG: Sandra Day O'Connor said that equal protection means that you cannot have a law that applies differently to heterosexuals and homosexuals. So she does follow the Constitution in that regard.

And, you know, life is messy. And these two decisions are a little bit messy. But they come to the right conclusion. And Justice Kennedy, who's no flaming liberal, said that you cannot uphold a law, which was in Bowers (ph), which says that you're going to criminalize private behavior, whether or not, as Kate points out, those laws are enforced. The ones that remain aren't enforced.

However, in Texas, the door was kicked down and two people arrested for the very thing that this said.

And as for affirmative action, what was interesting is the difference in the way Justice Thomas perceives affirmative action, in his -- how it turned out for him, and Justice Sandra Day O'Connor. She said, Hey, I wouldn't be a justice if it weren't for affirmative action. It inflames and angers Justice Thomas that people think he's got the job because of affirmative action, when, in fact, he wouldn't have the job if not.

I wish somebody'd ask him that question.

SHIELDS: Bob Novak.

ROBERT NOVAK, CAPITAL GANG: I wondered how long it would take before somebody attacked Clarence Thomas, which I think is just reprehensible. I can't really improve much at all on what Kate said. I agree with everything she said.

Just suffice to say that they -- the court acts as a superlegislature, decides what is -- what -- rules what the law should be on homosexuality, what the law should be on affirmative action, and doesn't worry about the Constitution.

That's what this -- the disgrace is. And, of course, yes, if the sodomy law of Texas is going to be changed, which it should be, it should be done by the Texas legislature, not by the U.S. Supreme Court. There is nothing in the Constitution about it. In fact, on the equal protection clause, Margaret, none of the other justices agreed with Justice O'Connor, who really is a disgrace on that court.

I would say right now that the next justice on the court's going to be probably the White House counsel, Alberto Gonzales, and I think he'll fit right into this mold on the court. Be better than O'Connor, but who wouldn't?

SHIELDS: Al Hunt.

AL HUNT, CAPITAL GANG: Two good decisions this week, Mark. The sodomy case, it was decided on due process, Bob, which is actually broader than equal protection. Justice Scalia said that they're choosing sides in the culture war. He's chosen sides all along. He's a great gay-basher.

And on affirmative action, Mark, couple things. There's nothing in Sandra Day O'Connor's wise decision that mandates affirmative action. Nothing. It simply says that if a university wants to use racial preferences for diversity, it can do it.

And the history demonstrated it's worked, it's worked in the United States military, it's worked in the service academies, for which Ted Olson had no answer, and it's worked with the University of Michigan, one of the best law schools in the country.

Finally, Mark, there's this argument, if it weren't for these affirmative action on race, that higher education would be an academic meritocracy. Nonsense. There are preferences given for rich kids, preferences given for legacies, preference given for athletes.

But some people don't want to focus on that, they just want to focus on race.

SHIELDS: Margaret Carlson, just go back to what Bob Novak said. The president himself praised...

CARLSON: Sandra Day O'Connor.

SHIELDS: ... Justice O'Connor's decision as careful and balanced. And there was -- if anything, there was a resounding silence from conservatives on Capitol Hill over the sodomy decision. I mean, what does this mean politically? Does this mean that they've taken a leave on these important issues to the conservative base?

CARLSON: Well, as Justice Scalia said, he's taken sides in the culture wars, and President Bush has taken the side of affirmative action is a good thing for a compassionate conservative to embrace, as is giving gays, tolerating gays in our society.

O'BEIRNE: Let the record show, the military, the American military, does not use race preferences, because it's not the same as affirmative action. And when the publics have a chance, even in liberal states like California and the state of Washington, to vote down race preferences, they do so.

There's very little evidence that they lead to the kind of (UNINTELLIGIBLE) understanding that Justice O'Connor talks about at Michigan, where they have segregated dorms and black-only graduations. And of course it's only one kind of diversity they talk about. When 91 percent of Ivy League law professors voted for Al Gore and Ralph Nader, I'd say they have a far bigger diversity problem on American elite campuses than whether or not...

NOVAK: You know...

O'BEIRNE: ... you have a requisite number of black kids in the class.

NOVAK: (UNINTELLIGIBLE) the president -- you mentioned President Bush. President Bush joined the prevailing opinion on the court with mostly Republican appointed justices on the court. And in fact, his toning down of Solicitor General Ted Olson's original brief on affirmative action on the orders of Alberto Gonzales and President Bush, indicated that this is the kind of decision the president wanted.

I just think it's the wrong decision.

HUNT: Let the record also show that the United States service academies, Annapolis, West Point, and the Air Force Academy, practice exactly the same kind of affirmative action the University of Michigan Law School does. They do it through the prep schools. There's no difference.

And the United States military not only practices it, Colin Powell, the most visible beneficiary, says he was a absolute product of affirmative action. When they sent a bunch of promotions in 1978 and Clifford Adams (UNINTELLIGIBLE) sent them back and said, You can do better, and we got Colin Powell.

SHIELDS: Let me just say that I thought the most compelling brief that was filed was filed on behalf of the military. (UNINTELLIGIBLE) signed by Norman Schwarzkopf and Dennis Blair (UNINTELLIGIBLE) chief of naval of operations. I mean, making the case that the United States military is a remarkable institution where there is no discrimination, and at the same time, there is no special treatment, and...

O'BEIRNE: Exactly, which is not what race preferences are.

SHIELDS: ... (UNINTELLIGIBLE) -- no, but, I mean, but the reality is...

O'BEIRNE: The military is a meritocracy.

SHIELDS: ... the reality -- the reality -- there is a meritocracy, but the reality is, you have to have people on that route and on that trail to have a chance...

CARLSON: Yes.

(CROSSTALK)

SHIELDS: ... to succeed.

O'BEIRNE: ... the prep schools, which is fine...

(CROSSTALK) CARLSON: Yes.

O'BEIRNE: ... that's affirmative action.

CARLSON: Yes.

O'BEIRNE: The service academies cannot have the same kind of acceptance scheme that the University of Michigan Law School has, because it's a holistic scheme that nobody...

CARLSON: (UNINTELLIGIBLE)

O'BEIRNE: ... quite (UNINTELLIGIBLE).

HUNT: Well, that's funny, Kate, because they say they do.

O'BEIRNE: Well...

(CROSSTALK)

HUNT: They filed a brief and said they did.

O'BEIRNE: ... they also...

HUNT: I don't think the service...

O'BEIRNE: ... they also denied...

HUNT: ... I don't think the service academy...

O'BEIRNE: ... (UNINTELLIGIBLE) now they have...

HUNT: ... I don't think the...

O'BEIRNE: ... segregated dorms.

HUNT: I don't think the service academies would lie.

SHIELDS: Last word, Al Hunt.

GANG of five will be back with whether government help for buying prescription drugs is finally at hand for seniors. As a senior, I'm asking.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Separate prescription drug Medicare bills passed the House and the Senate. The Senate consensus nearly broke down when Republicans included a means testing provision.

(BEGIN VIDEO CLIP)

SEN. TED KENNEDY (D), MASSACHUSETTS: The kind of Medicare system that our seniors rely on day in and day out will be destroyed. (END VIDEO CLIP)

SHIELDS: But the provision was eliminated. The bill passed by a vote of 76 to 21, despite conservative and liberal arguments against it.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: For anyone who believes this bill will cost a maximum of $400 billion over the next 10 years, I've got some ocean front property in Gila Bend, Arizona, to sell you.

SEN. BOB GRAHAM (D), FLORIDA: Many of those who most need prescription drug coverage today simply will not live long enough to get any benefits under this plan.

(END VIDEO CLIP)

SHIELDS: The House bill passed by just a one-vote margin after a bitter partisan debate.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The Democrats have come to this floor as servants of the people. The Republicans have come to this floor as handmaidens of the prescription drug industry.

REP. TOM DELAY (R-TX), MAJORITY LEADER: Medicare is too important for partisan politics.

(END VIDEO CLIP)

SHIELDS: Reluctant Republican support to pass the bill was rounded up by the speaker.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R), SPEAKER: This is a defining moment for this Congress, and it's too late for obstruction, it's too late for nit-picking...

(END VIDEO CLIP)

SHIELDS: Bob Novak, how will these two competing bills be put together in final form?

NOVAK: Not very easily. This may be one of the most fascinating conferences ever. The conservatives have been fobbed in the Senate, saying, We're going to fix it in conference. But if they fix it in conference and make it closer to the House bill, which is a bad bill too, in my opinion, then they're going to stand a chance of losing the Democratic votes there.

So it's a very delicate process.

The important thing is that the Republicans, with the blessing and fast push by the White House, have embarked on a new entitlement. It is distasteful to the most effective conservatives in both houses, who voted no. Not many voted no, but they were the best people. And it is a very sorry day, I think, for the conservative cause.

SHIELDS: I mean, that's very helpful, Al, we know who the best people are.

CARLSON: (UNINTELLIGIBLE).

HUNT: I'm stunned that Tom DeLay is not one of the best people, Bob. You really have done a -- you've done a 180. You're right, though, about the House bill being a bad bill. And I think it's...

NOVAK: They're both bad.

HUNT: ... I think it doesn't go nearly far enough. I think the Senate bill is imperfect, but you can at least improve upon it. But the House bill, the House showed that the principal conservatives are paper tigers. Now, only 18 conservatives voted against this expansion of government.

Mark, I think that this is going to be a tough conference, but I think that both sides are petrified for it not to happen. The one thing I hope the Democrats in the Senate will do is, put Edward Kennedy on that conference, because I think Edward Kennedy has a veto power over whatever they finally approve.

SHIELDS: Kate O'Beirne, I have a question. George Bush won a smashing victory last November, and the Republican agenda since he came back was essentially extension of unemployment benefits, creation of homeland security, and prescription drugs.

NOVAK: What happened to the tax cuts?

SHIELDS: That's not -- But that -- but, I mean, beyond that, beyond the tax cut. But that -- those were the three things that he said he wanted in the second term -- in the second session of Congress. I'm just asking, that doesn't sound like a conservative agenda.

O'BEIRNE: Well, the White House will remind you that in 2000, George Bush ran on a promise to deliver a prescription drug benefit.

SHIELDS: Yes, he did.

O'BEIRNE: And, of course, the challenge conservatives face in the House, who very much wanted to oppose this bill, is, if you don't vote for the bill, nobody listens to any kind of modification you want to make to it. And because this bill is an inevitability, many of them think it's worth voting for so you can change something about it.

Look, lots of bets are being placed. The Republican White House is betting they're going to be rewarded for delivering a benefit like this, and they're betting it will, this reform, will increase the role of the private market. Ted Kennedy's betting the private market features will fail. The Democratic candidates for president are betting the reform will be unpopular. They voted no. The only safe bet is what John McCain talked about, it's going to cost a whole lot more money than current estimates. That's the only safe bet.

SHIELDS: Picking up on Kate's part, Margaret, though, we're talking about -- they finessed 2004, because the bill doesn't...

(CROSSTALK)

SHIELDS: ... 2006.

CARLSON: The first, the -- yes.

SHIELDS: So you get by the presidential election, the next election, so it won't be that kind of revolt we saw against catastrophic coverage.

CARLSON: Catastrophic. And there could be, because there's a -- what the call a doughnut in there, where seniors end up paying a huge amount before the catastrophic amounts kick in on this. And in the details of this bill, which, you know, even Bob might be hard-pressed to enumerate, could lie a lot of trouble for both sides, whoever wants to claim victory for this bill.

I mean, it's not going to be reduced easily to a sound bite. Senator Kennedy, it looks like his bill, Bush will embrace it. Those two are together. Where are the conservatives? And when seniors start to complain, if they do, over the amounts they're going to have to pay, and if they're pushed, as the House bill would do, into private plans, you might have that Rostenkowski revolt.

NOVAK: I think...

SHIELDS: Let me just ask Bob Novak this. Bob, Jeff Garron (ph), the Democratic pollster, is a very true guy, he's done a lot of polling (UNINTELLIGIBLE)...

NOVAK: He's a big Democrat, so...

SHIELDS: I said, Democratic, I said, Democratic pollster. He said there are two things that seniors want. They want predictability and simplicity. And that this legislation involves complexity and unpredictability, and...

NOVAK: Well, that, I heard that on the Senate floor over and over again. But the most, the most, the most...

SHIELDS: Oh, sorry, Bob.

NOVAK: ... the most...

(CROSSTALK)

CARLSON: You're boring him, Mark. NOVAK: ... the most, the most interesting...

(CROSSTALK)

NOVAK: ... thing was that this bipartisan great huge majority, which I always distrust bipartisan bills, somebody sold out if there's a bipartisan bill, but it almost came undone on what issue? Why did Teddy Kennedy get ready for a filibuster? Because of means testing, of saying that the rich people, like Mark Shields, would have to -- would not get the same benefits as poor people.

Why was Teddy Kennedy opposed to that? Because he loves the rich? No, because they know that this -- if you get this on a basis of a means testing, which it should be, it cut -- it begins to look like welfare, which it is.

CARLSON: Exactly, and that's what...

HUNT: I love to hear to hear Bob Novak...

CARLSON: Yes.

HUNT: I love to hear Bob Novak...

CARLSON: And (UNINTELLIGIBLE)...

HUNT: ... preaching class warfare...

CARLSON: (UNINTELLIGIBLE) and Mark...

HUNT: ... go, Brother Novak.

CARLSON: ... and Mark -- and Mark...

HUNT: And I want to tell you one more thing too...

CARLSON: Yes, wait...

HUNT: ... is, if you get this baby enacted, if this gets on the table, Kate is right, it is going to be good. I think Bush will get credit in 2004.

SHIELDS: Yes, he will.

HUNT: But afterwards, they'll go through the (UNINTELLIGIBLE) thing, and you can build on this, and John McCain and Kate are right.

NOVAK: It'll be huge.

(CROSSTALK)

NOVAK: It'll be huge.

(CROSSTALK)

HUNT: ... tax cut. CARLSON: But this is why Kennedy did that, is that Republicans have vowed at one time or another to make Medicare wither on the vine and make it for the very sick and the very poor. And if you means- test it, it's the beginning.

NOVAK: It should be means-tested.

SHIELDS: I hate bipartisan bills like the Civil Rights Act of 19...

(CROSSTALK)

CARLSON: Oh, how (UNINTELLIGIBLE).

SHIELDS: Next on Capital Gang, can Howard Dean be nominated for president?

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Former Vermont governor Howard Dean officially announced his candidacy for the Democratic presidential nomination.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I speak not only for my candidacy, I speak for a new American century and a new generation of Americans, both young people and young at heart...

(END VIDEO CLIP)

SHIELDS: The day before his announcement, he was asked by NBC's Tim Russert about his previous advocacy of reduced Social Security and Medicare benefits.

(BEGIN VIDEO CLIP, "MEET THE PRESS," NBC)

DEAN: That was the middle of har -- I mean, I don't recall saying that, but I'm sure I did.

(END VIDEO CLIP)

SHIELDS: At a Democratic fund raiser later in the week, Dean joked about his own combative reputation.

(BEGIN VIDEO CLIP)

DEAN: Let me say how delighted I am to have all my opponents here in one room, so I can apologize to each and every one of you...

(END VIDEO CLIP)

SHIELDS: Dean finished first this week in an online poll.

Margaret Carlson, is it time to take Howard Dean seriously as a possible Democratic nominee for president?

CARLSON: Seriously, in that it may be Dean versus one of the others. He's second in New Hampshire, third in Iowa. He raised over $2 million largely on the Internet in one quarter.

He's got a few things going against him. For a straight talker, he doesn't always give a straight answer, and some of that was obvious on Tim Russert, when he said things like he -- It's good that I apologized, but he quibbled over whether had had to apologize to Bob Graham.

And then saying he'd have people for that sort of thing for the questions he didn't have an answer to, which worked for George Bush in 2000, but I don't think works now after 9/11, when you really want your presidents not to be frat boys but to be really serious.

And he does have the anti-war problem, and, you know, even the most antiwar people kind of agree that it's good thing that Saddam Hussein is gone, and he said, Oh, I suppose that's a good thing. That hurt him.

SHIELDS: Kate O'Beirne.

O'BEIRNE: I don't disagree with Margaret about his prospects. Much can happen, but I sort of like Howard Dean's chances. She's also right, his back -- his defenders and fans call him a true believer. He's more of an equivicator. I mean, he's flipping around on balanced budget amendment and Social Security and the death penalty and gay marriage.

So he's not much of a straight talker. And he comes across as angry and prickly. But look, the Democratic base is angry, and I think he well represents their mood, and there are a whole lot of them pessimistic about the chances of any Democrat knocking off a popular George Bush, and I think Howard Dean appeals to the death with dignity Democrats who would rather go down with a true believer, as they see it, like Howard Dean, than a Bush-lite candidate.

SHIELDS: You know, I hear a lot of talk in town about this Bush reelection. Bush's reelect score now is down to 50 in the polls, which is hardly the kind of thing that you'd say the guy's going to Mount Rushmore in his second term.

NOVAK: (UNINTELLIGIBLE)...

O'BEIRNE: Well, but Ronald Reagan's at this point...

NOVAK: He's got, he's got...

O'BEIRNE: ... in his term.

NOVAK: ... an approval rating over 65. (UNINTELLIGIBLE) I don't think George Bush's reelection is assured by any means.

HUNT: Oh, no. NOVAK: But I do, I do believe that the Howard Dean thing is just absolutely one of the most delightful developments, because the party establishment hates him, that's why they're so...

(CROSSTALK)

NOVAK: ... they're so -- yes, they're so sensitive to his criticism. He's an outsider, he's a guy from the people's republic of Vermont. I mean, the interesting thing to me is that he may win the New Hampshire primary. And if he wins the New Hampshire primary, anything can happen.

HUNT: Boy, I hope this doesn't mean that Bob's deserting Al Sharpton.

But Robert's absolutely right, the political establishment hates him. You know, he was criticized on that "Meet the Press" performance, for instance, for saying that, he was asked how many active duty troops we had, he said between 1 and 2 million, we have 1.5...

SHIELDS: Yes.

HUNT: ... how many do we have in Iraq, he said 135,000, it was 146. George Bush wouldn't have done anywhere that well three years ago.

I don't think he'll be a finalist. I think he'll be a factor. The finalist will be Kerry, Gephardt, Lieberman, two of those three. I think the most interesting political question right now is whether Dick Gephardt can get the AFL-CIO endorsement.

O'BEIRNE: (UNINTELLIGIBLE)...

NOVAK: But he's got, he's got more, more oomph than they do, than the guys you mention, don't you agree with that?

HUNT: I think with the war over...

SHIELDS: Just a second, Bob.

HUNT: ... (UNINTELLIGIBLE)...

NOVAK: It's all right.

SHIELDS: You've talked too damn much tonight. Let's just -- I think Howard Dean is the most intriguing candidate thus far. He certainly has lighted the strongest bonfire and got more people involved in his candidacy. And let's be very frank about it, I mean, he was speaking for the followership and membership of the Democratic Party on their opposition to the war against Iraq, and...

O'BEIRNE: He sure was.

SHIELDS: ... it ain't looking too bad right now. I think... CARLSON: Well, you know, Democrats want an angry populist, but they don't want a nasty populist, and I think he's going to have to tone that down a little...

SHIELDS: OK.

CARLSON: ... to become the Bush fighter. They want, they want somebody going against him.

SHIELDS: And if Bob Novak really enjoys antiestablishment candidates that drive the party establishment, I'm surprised you didn't embrace John McCain more.

Coming up on the second of CAPITAL GANG...

CARLSON: (UNINTELLIGIBLE).

SHIELDS: ... our "Newsmaker of the Week" is the French ambassador in Washington, Jean-David Levitte. "Beyond the Beltway" looks at Iran as an emerging nuclear power with Howard -- Harvard scholar Jim Walsh. And our "Outrage of the Week," that's all after the latest news headlines.

(COMMERCIAL BREAK)

(NEWSBREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

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

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Our "Newsmaker of the Week," Jean-David Levitte, French ambassador to the United States.

Jean-David Levitte, age 57, residence Washington, D.C., law degree and graduate, the Institute of Political Science in Paris.

Entered French foreign service in 1970, the staff of President Giscard d'Estaing from 1975 to 1981. Staff of President Chirac from 1995 to 2000, ambassador to the United Nations 2000 to 2002, and since then, French ambassador to the United States.

Al Hunt sat down with Ambassador Levitte at the French embassy in Washington earlier this week.

(BEGIN VIDEOTAPE)

HUNT: Mr. Ambassador, U.S.-French relations deteriorated badly over the war with Iraq. Is it still at a low point?

JEAN-DAVID LEVITTE, FRENCH AMBASSADOR TO THE UNITED STATES: No. I think now the situation has improved. The two presidents, President Bush and President Chirac, met in Evian during the G-8 summit. The two leaders have decided to put aside their difference over Iraq, to work together to give a boost to the Middle East process, to work together on the fight against terrorism, which is your number one priority and our number one priority, to try to solve the issues of North Korea and Iran together.

HUNT: Defense Secretary Donald Rumsfeld is canceling U.S.-French military exercises. He specifically disinvited the French from a September conference of Air Force commanders. Your reaction?

LEVITTE: We have a wonderful cooperation between the U.S. and French armies in the Balkans, in Afghanistan, where we have troops deployed in Kabul, and special forces with yours on the border with Pakistan. Few days ago, our troops helped 100 American citizens to get out of Liberia.

HUNT: Have you protested Mr. Rumsfeld's action on the September conference?

LEVITTE: It is his decision. We'll respect it.

HUNT: Iraqi reconstruction, will France contribute money?

LEVITTE: Yes, we will participate, and we have said so, with our European partners, because we need to give a chance to the Iraqi people to rebuild their country, to build democracy. We considered this war was not necessary, but the war is over.

HUNT: Isn't it only natural, then, that most of the big rebuilding contracts go to American firms?

LEVITTE: We don't see Iraq as a pie to be shared. For us, it's a burden to be shared. It will be very costly. So it's either the American taxpayer or the world community.

HUNT: Mr. Ambassador, final Iraq question. Do you believe that the failure so far to find any weapons of mass destruction, especially any nuclear capability, is a vindication of the French position?

LEVITTE: I would say simply, it's a vindication of the credibility of the U.N. inspections. Now we should have a second look on the credibility of the U.N. inspections. And I think it's important for other issues. Look at Iran, look at North Korea. If we could deploy U.N. inspections in these two countries, it would be a good use for you and for us.

HUNT: America dominates the world today, militarily, economically, and even politically. Is that inherently a good thing, or is it, in the French view, inherently destabilizing?

LEVITTE: No, it is not destabilizing. No, what is important to understand is that we are in a dangerous world. So in that world, which is dangerous, it's good news to have the American military might.

What we want to achieve in Europe is a more coherent European capacity in terms of difference. We are too weak. We have to solve the crisis next door to the European borders. Bosnia, Kosovo, are two examples where we failed, and we had to ask you to come to help us.

Now, economically I would argue that we have a strong European capacity, economic force. We have the euro, and it's good news for America.

HUNT: On a personal note, you presented your credentials to the White House a little more than six months ago. It's been a very turbulent time. How have you been treated in Washington?

LEVITTE: It seems to me it was six years ago, but at the same time, I must pay tribute to the courtesy of all my interlocutors. It's wonderful to be an ambassador in Washington. It's wonderful to travel coast to coast to explain the French position, because there is always a respectful and friendly debate. We may disagree, but we are friends.

(END VIDEOTAPE)

SHIELDS: Al Hunt, was the ambassador being unrealistically optimistic about relations between the United States and France?

HUNT: Mark, he was being very diplomatic, and he is a very effective diplomat. Tell you something interesting, I think the differences between the United States and France are far more profound than the differences between the United States and Germany.

In doing research for this interview, it became clear to me that George Bush actually sort of likes Chirac, and he can't stand Schroeder. Now, this is a guy who personal relations matter. I just -- I don't know what it means, but it's interesting.

SHIELDS: Bob Novak.

NOVAK: I think the United States and France, when all is said and done, with all this biting -- backbiting, have too much in common to stay alienated. And you may even see French troops before too long in Iraq.

CARLSON: Ambassador Levitte should invite the Congress and, say, THE CAPITAL GANG over for French fries so that can be renamed from freedom fries, and all will be forgiven.

SHIELDS: Kate?

O'BEIRNE: I'm not sure, Bob, that France and America do have that much in common in the post-cold war world. It does strike me that the French project, regardless of what the ambassador diplomatically says, is to organize the European Union as a counterweight to America power and prestige. That puts him at odds with us.

SHIELDS: We wouldn't have won the Revolution without them. I'm always be grateful to the French for that.

Coming up, the CAPITAL GANG classic, when the Supreme Court ruled against affirmative action in 1997. (COMMERCIAL BREAK)

SHIELDS: Welcome back.

Five and one-half years ago, the Supreme Court let stand a vote by Californians to prohibit racial preferences imposed by state policy. But the House Judiciary Committee the same week voted down a bill to end racial preferences.

The committee's chairman, Republican Henry Hyde of Illinois, was our guest as THE CAPITAL GANG discussed this issue on November 8, 1997.

(BEGIN VIDEO CLIP, November 8, 1997)

SHIELDS: Bob Novak, is affirmative action in trouble, or is it making a political comeback?

NOVAK: Mark, the American people hate racial preferences. It's a great issue for the Republicans, it's a terrible issue for the president. He's on the wrong place. But they're -- it -- with a -- playing a losing hand is dealt a losing hand on this. He is playing the race card.

REP. HENRY HYDE (R-IL), CHAIR, JUDICIARY COMMITTEE: There is general accord, agreement, among Republicans that quotas and set- asides and preferences are unconstitutional, they're wrong. But they're always saying, This isn't the time to bring it forward.

HUNT: Affirmative action divides this country right down the middle. California disapproved it 54-46. Houston approved it 54-46.

We had a poll last week, "Washington Journal" poll, 48-43 for. The country divides in half.

O'BEIRNE: The days of race preferences are numbered. The public, by 80 percent, hates them. The courts are increasingly suspicious of them. The man who's on the side of Republicans here...

(END VIDEO CLIP)

SHIELDS: Al Hunt, is it now obvious that these predictions, and frank predictions, of the death of racial preference were somewhat greatly exaggerated?

HUNT: Yes, it is, Mark, because affirmative action works, as we can see from George Bush's endorsement of the Supreme Court decision this week.

SHIELDS: Bob Novak.

NOVAK: I think those -- the statements that Kate and I made were exactly right. People still hate racial preferences. But the elite opinion drives the Supreme Court and the media.

SHIELDS: Margaret. CARLSON: I think it works. It worked for Justice Thomas, Justice O'Connor. I don't want to speak for Kate, but I wouldn't be on this panel without it, so I think it's a good thing.

SHIELDS: Well, you're awfully very attractive and smart, too. And so are you, Kate.

O'BEIRNE: Race preferences...

HUNT: (UNINTELLIGIBLE) Bob?

SHIELDS: No...

(CROSSTALK)

CARLSON: Yes, Bob is so (UNINTELLIGIBLE)...

NOVAK: (UNINTELLIGIBLE)?

CARLSON: Yes.

O'BEIRNE: Race preferences...

SHIELDS: If we had any judgment.

O'BEIRNE: ... Bob's right, the public doesn't like race preferences. Blacks do not like race preferences. But they're not imposed through the democratic system, they're adopted by the elite. And they necessarily engage in racial stereotyping and a racial stigmatizing that the public wisely rejects.

SHIELDS: Last word, Kate O'Beirne.

Next on CAPITAL GANG, Beyond the Beltway. Is Iran going nuclear? We'll be joined by Jim Walsh of Harvard, an authority on weapons of mass destruction in the Middle East.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

The U.S. government continued to voice alarm about Iran.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Iran has certain obligations. And what the United States is saying is that we have long believed that Iran might be using its civilian nuclear program for cover for efforts to build a military program.

(END VIDEO CLIP)

SHIELDS: Student demonstrations in Iran attracted the attention of the president.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is the beginnings of people expressing themselves toward a free Iran, which I think is positive.

(END VIDEO CLIP)

SHIELDS: Iranian authorities warned the U.S. not to take military action against Iran.

(BEGIN VIDEO CLIP)

MOHAMMAD KHATAMI, PRESIDENT OF IRAN (through translator): We know our right is to get access to advanced nuclear knowledge and its advantages for peace. Therefore, we don't accept any condition...

(END VIDEO CLIP)

SHIELDS: Joining us now from Los Angeles is Jim Walsh, executive director of Managing the Atom Project at Harvard University's John F. Kennedy School of Government.

Thanks for being with us, Jim.

JIM WALSH, HARVARD UNIVERSITY: Happy to be here, Mark.

SHIELDS: Jim, does its nuclear development make Iran a threat to the United States?

WALSH: Well, if we're talking about nuclear weapons, certainly nuclear weapons are inherently dangerous, and so it's a serious business. But I also think we have to keep it in perspective. We have to put it in context.

So is it the most dangerous nuclear threat in the world today? No, I think most of my colleagues would say that Pakistan, which is crawling with terrorists, has nuclear weapons already, and has given nuclear technology to North Korea.

That's a bigger nuclear-related risk right now than Iran.

The other thing you should ask when you want to put this into context is, how do we weigh the strengths of Iran versus the U.S.? And on every measure, the U.S. is far, far stronger than Iran, 37 times as big a military force as Iran does. We have thousands of nuclear weapons, Iran has zero nuclear weapons.

So yes, it's serious, but we shouldn't panic, and we shouldn't provoke a crisis when there isn't need for one.

SHIELDS: Bob Novak.

NOVAK: Do you think, Jim, that the very strong statements by the members of the administration -- we just had one by Dr. Rice -- are serving to provoke a crisis with the Iranian regime?

WALSH: Well, I do think that they are probably unhelpful. There's been a lot of talk about destabilizing Iran, having American- made solutions to the Iranian problem. And I think that's counterproductive, because what it does, it strengthens the hand of the hard-liners, the folks we want to lose here, it actually helps them.

And the second thing it does is, it increases the incentive that Iran has to seek a nuclear weapon in the first place. So I think even if you want to change that regime, the last thing you want to do is going around talking about it out loud in a really loose way.

SHIELDS: Margaret Carlson.

CARLSON: Jim, by the time the United States took action against Iraq, there were U.N. resolutions that had been violated, Iraq had invaded Kuwait, and Iran, for that matter. Iran has not been an aggressive country, although it -- now it does seem to have a nuclear program that could be converted to military use.

What does the United States have? Does it -- I don't believe there's a U.N. resolution calling for inspections. What framework does the United States have for putting pressure on Iran to cut back on its nuclear program?

WALSH: Well, it's a good question, Margaret. You know, where is the U.S. leverage here? And it's certainly not in something like trade sanctions, because we don't do a lot of trade with Iran, and we don't recognize them as a country. It's really the nonproliferation regime where we have the most leverage.

Why? Because we can request inspections of undeclared facilities. We can require that the IAEA, the International Atomic Energy Agency, go police and keep an eye on Iran.

So I think that's a powerful tool. And I think we also want to be trying to strengthen the nonproliferation constituencies within Iran. Iran is nothing but a giant argument. These guys argue over everything. There are thousand divisions, a thousand factions, and we want to make sure the factions that oppose nuclear weapons are stronger than those that want nuclear weapons.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Jim, beyond being persuaded of the value of having a nuclear capability, what lessons do you think Iran drew from the recent action in Iraq, that they can count on a divided world to stall around until they do develop a capacity? Or that America will act against world opinion if need be?

WALSH: Well, it's a great question. I can't really get into the minds of the Iranians. I've met with Iranians to talk about nuclear weapons in Rome and in Vienna, but it's a hard thing to try to speculate on their motivations. It seems to me two things are possible, and we'll just have to see.

One is that the U.S. action in Iraq makes them feel more secure and makes them feel like they better not go down the path towards nuclear weapons, or they'll get whacked.

The other possibility here, and some people say this is through North Korea, is that the lesson they'll learn is, We better build our nuclear weapon as soon as possible. The mistake that Iraq made was being sort of betwixt and between. We better get our nuclear weapon to protect us.

I don't know which of those lessons or other lessons they may have learned. But the more we threaten them, I think the greater the incentive that they will seek nuclear weapons.

SHIELDS: Al Hunt.

HUNT: Jim, the Russians have been very helpful in getting materials to the Iranian nuclear program. The Bush administration has said recently that the Russians now appreciate the danger and are being more cooperative with our interests in not getting as much material to the -- to Iran. Is that true? And will that make a difference?

WALSH: Well, I think it is true. I think it will make a difference. But this has been a struggle for some years now. I think President Putin has made clear that he wants to be careful of -- about any transfers or any relationship with Iran with respect to nuclear weapons.

But Menadim (ph) and other bureaucratic actors may have different views. So I think it's a tough one, but I think they are serious about it.

Even more important, I think, is perhaps the role of the Europeans. As I said, we don't do much trade with Iran. They're sort of persona non grata. But the Europeans have a lot of investment in Iran, have a long history of Iranian relations. And the E.U. has called on Iran to adopt a more aggressive set of rules for inspection. And I think the Europeans have a big and a positive role to play here.

SHIELDS: Hey, Jim Walsh, thank you very much for being with us. It's been enormously helpful.

THE GANG will be back with the "Outrages of the Week."

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week."

Thanks to Democratic Congresswoman Marcy Kaptor of Ohio, we now know that conservatives don't always mean it when they swear allegiance to the free market. How else to explain Title VIII in the House prescription drug bill, which forbid the secretary of health and human services from negotiating with the world's biggest drug companies to get a better price for prescriptions like the VA does for veterans for the nation's seniors?

Marcy Kaptor is right. By using free market pressure, we could save taxpayers and seniors billions. Bob Novak.

NOVAK: One senator after another took the floor in praise of Strom Thurmond, dead at age 100. The oldest combat officer in the Normandy invasion, governor of South Carolina, carrying four states for president, elected to the Senate in a write-in, longest speech in Senate history, first Southern senator with a black aide, first Deep Southern Republican senator.

Well, wait a minute. Didn't his colleagues force Trent Lott out as majority leader because he said nice things about old Strom? Maybe somebody owes Senator Lott an apology.

SHIELDS: Margaret Carlson.

CARLSON: Mark, for less than a rounding error in the tax cut going to millionaires, President Bush could save Americorps' 50,000 volunteers. Two hundred corporation executives ran a full-page ad in "The New York Times" this week urging just that.

In California alone, volunteers, who build low-cost housing, tear down crack dens, and clean up parks, will drop from 6,000 to 825 without new funds.

Once derided as welfare for yuppies, the program now has strong bipartisan support in Congress. Bush just needs to recall there's more to being president than cutting taxes.

SHIELDS: Kate O'Beirne.

O'BEIRNE: This week, "The New York Times" ran a boldfaced lie on its front page, literally. Its obituary marked the death of former Senator Thurmond, who changed his position on race issues decades ago, by falsely labeling him a foe of integration. This politician's support for racial equality was far more consequential than his behavior in the distant past.

Such is the treatment of Republicans on race issues. You don't imagine that Senator Robert Byrd's obituary would be titled, "Death of a Klansman," do you?

SHIELDS: Al Hunt.

HUNT: Mark, Governor Thurmond's 1948 presidential run as an arch-segregationist was shameful. However, unlike some of his peers, Strom in his 30 -- in his last 30 years adapted to a changing and a much better America on race.

On a personal note, his much younger wife and my wife were sorority sisters, and he once counseled me that we ought to have a boy, followed by a girl, then a boy, and finally a girl, the way he did.

When I looked baffled, he invited me to come by his office, and he would explain how it's done.

I regret I never made that visit.

SHIELDS: This is Mark Shields saying goodbye for THE CAPITAL GANG.

Coming up next, "CNN PRESENTS: The Road to Baghdad." At 9:00 p.m., "LARRY KING WEEKEND," former first lady Barbara Bush. And at 10:00, the latest news on CNN.

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Versions of Medicaid Reform Pass House, Senate; Dean Announces Run for Presidency>

Aired June 28, 2003 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to THE CAPITAL GANG.

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

The Supreme Court in a five-to-four vote affirmed the constitutionality of race as a factor in admissions at the University of Michigan Law School.

The majority opinion, by Justice Sandra Day O'Connor, said, quote, "Effective participation by members of all racial and ethnic groups in the civic life of our nation is essential if the dream of one nation, indivisible, is to be realized," end quote.

Dissenting, Justice Clarence Thomas said, quote, "The majority upholds the law school's racial discrimination not be interpreting the people's Constitution but by responding to a faddish slogan of the cognoscenti," end quote.

The high court next ruled six to three against the Texas sodomy law. Speaking for the majority, Justice Anthony Kennedy said of the high court's past support of antisodomy laws, quote, "Its continuance as precedent demeans the lives of homosexual persons," end quote.

The dissent by Justice Antonin Scalia said, quote, "The court has taken sides in the culture war," end quote.

Kate O'Beirne, what message is -- or messages is the Supreme Court sending in these two decisions?

KATE O'BEIRNE, CAPITAL GANG: Well, I think one overriding message is clearly for the majority in these cases on this Supreme Court. The Constitution doesn't just live, it mutates. And the reason why Justice Sandra Day O'Connor is so key to these decisions is, she judges on such an ad hoc basis. She's not guided by either clear legal principles, because she changes them over time, or by precedent.

It also tells us that the courts, as subject to elite opinion, as fellow elites in the culture, the public really doesn't like racial preferences. They support affirmative action, but not race preferences, although the elites do. And they, of course, upheld race preferences in the Michigan case, not affirmative action. And it also says that if something becomes controversial, like the antisodomy laws, they'll change their precedent, in just 17 years ago. They're not content to leave that to the democratic process. People have changed their minds, which is why only 13 states have such laws, and they're largely unenforced. But they want to jump into that kind of democratic wrangling with a tough issue and preempt the public's action.

SHIELDS: We are blessed here on THE CAPITAL GANG with two women attorneys. Kate O'Beirne, having heard, now about Margaret Carlson?

MARGARET CARLSON, CAPITAL GANG: Sandra Day O'Connor said that equal protection means that you cannot have a law that applies differently to heterosexuals and homosexuals. So she does follow the Constitution in that regard.

And, you know, life is messy. And these two decisions are a little bit messy. But they come to the right conclusion. And Justice Kennedy, who's no flaming liberal, said that you cannot uphold a law, which was in Bowers (ph), which says that you're going to criminalize private behavior, whether or not, as Kate points out, those laws are enforced. The ones that remain aren't enforced.

However, in Texas, the door was kicked down and two people arrested for the very thing that this said.

And as for affirmative action, what was interesting is the difference in the way Justice Thomas perceives affirmative action, in his -- how it turned out for him, and Justice Sandra Day O'Connor. She said, Hey, I wouldn't be a justice if it weren't for affirmative action. It inflames and angers Justice Thomas that people think he's got the job because of affirmative action, when, in fact, he wouldn't have the job if not.

I wish somebody'd ask him that question.

SHIELDS: Bob Novak.

ROBERT NOVAK, CAPITAL GANG: I wondered how long it would take before somebody attacked Clarence Thomas, which I think is just reprehensible. I can't really improve much at all on what Kate said. I agree with everything she said.

Just suffice to say that they -- the court acts as a superlegislature, decides what is -- what -- rules what the law should be on homosexuality, what the law should be on affirmative action, and doesn't worry about the Constitution.

That's what this -- the disgrace is. And, of course, yes, if the sodomy law of Texas is going to be changed, which it should be, it should be done by the Texas legislature, not by the U.S. Supreme Court. There is nothing in the Constitution about it. In fact, on the equal protection clause, Margaret, none of the other justices agreed with Justice O'Connor, who really is a disgrace on that court.

I would say right now that the next justice on the court's going to be probably the White House counsel, Alberto Gonzales, and I think he'll fit right into this mold on the court. Be better than O'Connor, but who wouldn't?

SHIELDS: Al Hunt.

AL HUNT, CAPITAL GANG: Two good decisions this week, Mark. The sodomy case, it was decided on due process, Bob, which is actually broader than equal protection. Justice Scalia said that they're choosing sides in the culture war. He's chosen sides all along. He's a great gay-basher.

And on affirmative action, Mark, couple things. There's nothing in Sandra Day O'Connor's wise decision that mandates affirmative action. Nothing. It simply says that if a university wants to use racial preferences for diversity, it can do it.

And the history demonstrated it's worked, it's worked in the United States military, it's worked in the service academies, for which Ted Olson had no answer, and it's worked with the University of Michigan, one of the best law schools in the country.

Finally, Mark, there's this argument, if it weren't for these affirmative action on race, that higher education would be an academic meritocracy. Nonsense. There are preferences given for rich kids, preferences given for legacies, preference given for athletes.

But some people don't want to focus on that, they just want to focus on race.

SHIELDS: Margaret Carlson, just go back to what Bob Novak said. The president himself praised...

CARLSON: Sandra Day O'Connor.

SHIELDS: ... Justice O'Connor's decision as careful and balanced. And there was -- if anything, there was a resounding silence from conservatives on Capitol Hill over the sodomy decision. I mean, what does this mean politically? Does this mean that they've taken a leave on these important issues to the conservative base?

CARLSON: Well, as Justice Scalia said, he's taken sides in the culture wars, and President Bush has taken the side of affirmative action is a good thing for a compassionate conservative to embrace, as is giving gays, tolerating gays in our society.

O'BEIRNE: Let the record show, the military, the American military, does not use race preferences, because it's not the same as affirmative action. And when the publics have a chance, even in liberal states like California and the state of Washington, to vote down race preferences, they do so.

There's very little evidence that they lead to the kind of (UNINTELLIGIBLE) understanding that Justice O'Connor talks about at Michigan, where they have segregated dorms and black-only graduations. And of course it's only one kind of diversity they talk about. When 91 percent of Ivy League law professors voted for Al Gore and Ralph Nader, I'd say they have a far bigger diversity problem on American elite campuses than whether or not...

NOVAK: You know...

O'BEIRNE: ... you have a requisite number of black kids in the class.

NOVAK: (UNINTELLIGIBLE) the president -- you mentioned President Bush. President Bush joined the prevailing opinion on the court with mostly Republican appointed justices on the court. And in fact, his toning down of Solicitor General Ted Olson's original brief on affirmative action on the orders of Alberto Gonzales and President Bush, indicated that this is the kind of decision the president wanted.

I just think it's the wrong decision.

HUNT: Let the record also show that the United States service academies, Annapolis, West Point, and the Air Force Academy, practice exactly the same kind of affirmative action the University of Michigan Law School does. They do it through the prep schools. There's no difference.

And the United States military not only practices it, Colin Powell, the most visible beneficiary, says he was a absolute product of affirmative action. When they sent a bunch of promotions in 1978 and Clifford Adams (UNINTELLIGIBLE) sent them back and said, You can do better, and we got Colin Powell.

SHIELDS: Let me just say that I thought the most compelling brief that was filed was filed on behalf of the military. (UNINTELLIGIBLE) signed by Norman Schwarzkopf and Dennis Blair (UNINTELLIGIBLE) chief of naval of operations. I mean, making the case that the United States military is a remarkable institution where there is no discrimination, and at the same time, there is no special treatment, and...

O'BEIRNE: Exactly, which is not what race preferences are.

SHIELDS: ... (UNINTELLIGIBLE) -- no, but, I mean, but the reality is...

O'BEIRNE: The military is a meritocracy.

SHIELDS: ... the reality -- the reality -- there is a meritocracy, but the reality is, you have to have people on that route and on that trail to have a chance...

CARLSON: Yes.

(CROSSTALK)

SHIELDS: ... to succeed.

O'BEIRNE: ... the prep schools, which is fine...

(CROSSTALK) CARLSON: Yes.

O'BEIRNE: ... that's affirmative action.

CARLSON: Yes.

O'BEIRNE: The service academies cannot have the same kind of acceptance scheme that the University of Michigan Law School has, because it's a holistic scheme that nobody...

CARLSON: (UNINTELLIGIBLE)

O'BEIRNE: ... quite (UNINTELLIGIBLE).

HUNT: Well, that's funny, Kate, because they say they do.

O'BEIRNE: Well...

(CROSSTALK)

HUNT: They filed a brief and said they did.

O'BEIRNE: ... they also...

HUNT: I don't think the service...

O'BEIRNE: ... they also denied...

HUNT: ... I don't think the service academy...

O'BEIRNE: ... (UNINTELLIGIBLE) now they have...

HUNT: ... I don't think the...

O'BEIRNE: ... segregated dorms.

HUNT: I don't think the service academies would lie.

SHIELDS: Last word, Al Hunt.

GANG of five will be back with whether government help for buying prescription drugs is finally at hand for seniors. As a senior, I'm asking.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Separate prescription drug Medicare bills passed the House and the Senate. The Senate consensus nearly broke down when Republicans included a means testing provision.

(BEGIN VIDEO CLIP)

SEN. TED KENNEDY (D), MASSACHUSETTS: The kind of Medicare system that our seniors rely on day in and day out will be destroyed. (END VIDEO CLIP)

SHIELDS: But the provision was eliminated. The bill passed by a vote of 76 to 21, despite conservative and liberal arguments against it.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: For anyone who believes this bill will cost a maximum of $400 billion over the next 10 years, I've got some ocean front property in Gila Bend, Arizona, to sell you.

SEN. BOB GRAHAM (D), FLORIDA: Many of those who most need prescription drug coverage today simply will not live long enough to get any benefits under this plan.

(END VIDEO CLIP)

SHIELDS: The House bill passed by just a one-vote margin after a bitter partisan debate.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The Democrats have come to this floor as servants of the people. The Republicans have come to this floor as handmaidens of the prescription drug industry.

REP. TOM DELAY (R-TX), MAJORITY LEADER: Medicare is too important for partisan politics.

(END VIDEO CLIP)

SHIELDS: Reluctant Republican support to pass the bill was rounded up by the speaker.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R), SPEAKER: This is a defining moment for this Congress, and it's too late for obstruction, it's too late for nit-picking...

(END VIDEO CLIP)

SHIELDS: Bob Novak, how will these two competing bills be put together in final form?

NOVAK: Not very easily. This may be one of the most fascinating conferences ever. The conservatives have been fobbed in the Senate, saying, We're going to fix it in conference. But if they fix it in conference and make it closer to the House bill, which is a bad bill too, in my opinion, then they're going to stand a chance of losing the Democratic votes there.

So it's a very delicate process.

The important thing is that the Republicans, with the blessing and fast push by the White House, have embarked on a new entitlement. It is distasteful to the most effective conservatives in both houses, who voted no. Not many voted no, but they were the best people. And it is a very sorry day, I think, for the conservative cause.

SHIELDS: I mean, that's very helpful, Al, we know who the best people are.

CARLSON: (UNINTELLIGIBLE).

HUNT: I'm stunned that Tom DeLay is not one of the best people, Bob. You really have done a -- you've done a 180. You're right, though, about the House bill being a bad bill. And I think it's...

NOVAK: They're both bad.

HUNT: ... I think it doesn't go nearly far enough. I think the Senate bill is imperfect, but you can at least improve upon it. But the House bill, the House showed that the principal conservatives are paper tigers. Now, only 18 conservatives voted against this expansion of government.

Mark, I think that this is going to be a tough conference, but I think that both sides are petrified for it not to happen. The one thing I hope the Democrats in the Senate will do is, put Edward Kennedy on that conference, because I think Edward Kennedy has a veto power over whatever they finally approve.

SHIELDS: Kate O'Beirne, I have a question. George Bush won a smashing victory last November, and the Republican agenda since he came back was essentially extension of unemployment benefits, creation of homeland security, and prescription drugs.

NOVAK: What happened to the tax cuts?

SHIELDS: That's not -- But that -- but, I mean, beyond that, beyond the tax cut. But that -- those were the three things that he said he wanted in the second term -- in the second session of Congress. I'm just asking, that doesn't sound like a conservative agenda.

O'BEIRNE: Well, the White House will remind you that in 2000, George Bush ran on a promise to deliver a prescription drug benefit.

SHIELDS: Yes, he did.

O'BEIRNE: And, of course, the challenge conservatives face in the House, who very much wanted to oppose this bill, is, if you don't vote for the bill, nobody listens to any kind of modification you want to make to it. And because this bill is an inevitability, many of them think it's worth voting for so you can change something about it.

Look, lots of bets are being placed. The Republican White House is betting they're going to be rewarded for delivering a benefit like this, and they're betting it will, this reform, will increase the role of the private market. Ted Kennedy's betting the private market features will fail. The Democratic candidates for president are betting the reform will be unpopular. They voted no. The only safe bet is what John McCain talked about, it's going to cost a whole lot more money than current estimates. That's the only safe bet.

SHIELDS: Picking up on Kate's part, Margaret, though, we're talking about -- they finessed 2004, because the bill doesn't...

(CROSSTALK)

SHIELDS: ... 2006.

CARLSON: The first, the -- yes.

SHIELDS: So you get by the presidential election, the next election, so it won't be that kind of revolt we saw against catastrophic coverage.

CARLSON: Catastrophic. And there could be, because there's a -- what the call a doughnut in there, where seniors end up paying a huge amount before the catastrophic amounts kick in on this. And in the details of this bill, which, you know, even Bob might be hard-pressed to enumerate, could lie a lot of trouble for both sides, whoever wants to claim victory for this bill.

I mean, it's not going to be reduced easily to a sound bite. Senator Kennedy, it looks like his bill, Bush will embrace it. Those two are together. Where are the conservatives? And when seniors start to complain, if they do, over the amounts they're going to have to pay, and if they're pushed, as the House bill would do, into private plans, you might have that Rostenkowski revolt.

NOVAK: I think...

SHIELDS: Let me just ask Bob Novak this. Bob, Jeff Garron (ph), the Democratic pollster, is a very true guy, he's done a lot of polling (UNINTELLIGIBLE)...

NOVAK: He's a big Democrat, so...

SHIELDS: I said, Democratic, I said, Democratic pollster. He said there are two things that seniors want. They want predictability and simplicity. And that this legislation involves complexity and unpredictability, and...

NOVAK: Well, that, I heard that on the Senate floor over and over again. But the most, the most, the most...

SHIELDS: Oh, sorry, Bob.

NOVAK: ... the most...

(CROSSTALK)

CARLSON: You're boring him, Mark. NOVAK: ... the most, the most interesting...

(CROSSTALK)

NOVAK: ... thing was that this bipartisan great huge majority, which I always distrust bipartisan bills, somebody sold out if there's a bipartisan bill, but it almost came undone on what issue? Why did Teddy Kennedy get ready for a filibuster? Because of means testing, of saying that the rich people, like Mark Shields, would have to -- would not get the same benefits as poor people.

Why was Teddy Kennedy opposed to that? Because he loves the rich? No, because they know that this -- if you get this on a basis of a means testing, which it should be, it cut -- it begins to look like welfare, which it is.

CARLSON: Exactly, and that's what...

HUNT: I love to hear to hear Bob Novak...

CARLSON: Yes.

HUNT: I love to hear Bob Novak...

CARLSON: And (UNINTELLIGIBLE)...

HUNT: ... preaching class warfare...

CARLSON: (UNINTELLIGIBLE) and Mark...

HUNT: ... go, Brother Novak.

CARLSON: ... and Mark -- and Mark...

HUNT: And I want to tell you one more thing too...

CARLSON: Yes, wait...

HUNT: ... is, if you get this baby enacted, if this gets on the table, Kate is right, it is going to be good. I think Bush will get credit in 2004.

SHIELDS: Yes, he will.

HUNT: But afterwards, they'll go through the (UNINTELLIGIBLE) thing, and you can build on this, and John McCain and Kate are right.

NOVAK: It'll be huge.

(CROSSTALK)

NOVAK: It'll be huge.

(CROSSTALK)

HUNT: ... tax cut. CARLSON: But this is why Kennedy did that, is that Republicans have vowed at one time or another to make Medicare wither on the vine and make it for the very sick and the very poor. And if you means- test it, it's the beginning.

NOVAK: It should be means-tested.

SHIELDS: I hate bipartisan bills like the Civil Rights Act of 19...

(CROSSTALK)

CARLSON: Oh, how (UNINTELLIGIBLE).

SHIELDS: Next on Capital Gang, can Howard Dean be nominated for president?

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Former Vermont governor Howard Dean officially announced his candidacy for the Democratic presidential nomination.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I speak not only for my candidacy, I speak for a new American century and a new generation of Americans, both young people and young at heart...

(END VIDEO CLIP)

SHIELDS: The day before his announcement, he was asked by NBC's Tim Russert about his previous advocacy of reduced Social Security and Medicare benefits.

(BEGIN VIDEO CLIP, "MEET THE PRESS," NBC)

DEAN: That was the middle of har -- I mean, I don't recall saying that, but I'm sure I did.

(END VIDEO CLIP)

SHIELDS: At a Democratic fund raiser later in the week, Dean joked about his own combative reputation.

(BEGIN VIDEO CLIP)

DEAN: Let me say how delighted I am to have all my opponents here in one room, so I can apologize to each and every one of you...

(END VIDEO CLIP)

SHIELDS: Dean finished first this week in an online poll.

Margaret Carlson, is it time to take Howard Dean seriously as a possible Democratic nominee for president?

CARLSON: Seriously, in that it may be Dean versus one of the others. He's second in New Hampshire, third in Iowa. He raised over $2 million largely on the Internet in one quarter.

He's got a few things going against him. For a straight talker, he doesn't always give a straight answer, and some of that was obvious on Tim Russert, when he said things like he -- It's good that I apologized, but he quibbled over whether had had to apologize to Bob Graham.

And then saying he'd have people for that sort of thing for the questions he didn't have an answer to, which worked for George Bush in 2000, but I don't think works now after 9/11, when you really want your presidents not to be frat boys but to be really serious.

And he does have the anti-war problem, and, you know, even the most antiwar people kind of agree that it's good thing that Saddam Hussein is gone, and he said, Oh, I suppose that's a good thing. That hurt him.

SHIELDS: Kate O'Beirne.

O'BEIRNE: I don't disagree with Margaret about his prospects. Much can happen, but I sort of like Howard Dean's chances. She's also right, his back -- his defenders and fans call him a true believer. He's more of an equivicator. I mean, he's flipping around on balanced budget amendment and Social Security and the death penalty and gay marriage.

So he's not much of a straight talker. And he comes across as angry and prickly. But look, the Democratic base is angry, and I think he well represents their mood, and there are a whole lot of them pessimistic about the chances of any Democrat knocking off a popular George Bush, and I think Howard Dean appeals to the death with dignity Democrats who would rather go down with a true believer, as they see it, like Howard Dean, than a Bush-lite candidate.

SHIELDS: You know, I hear a lot of talk in town about this Bush reelection. Bush's reelect score now is down to 50 in the polls, which is hardly the kind of thing that you'd say the guy's going to Mount Rushmore in his second term.

NOVAK: (UNINTELLIGIBLE)...

O'BEIRNE: Well, but Ronald Reagan's at this point...

NOVAK: He's got, he's got...

O'BEIRNE: ... in his term.

NOVAK: ... an approval rating over 65. (UNINTELLIGIBLE) I don't think George Bush's reelection is assured by any means.

HUNT: Oh, no. NOVAK: But I do, I do believe that the Howard Dean thing is just absolutely one of the most delightful developments, because the party establishment hates him, that's why they're so...

(CROSSTALK)

NOVAK: ... they're so -- yes, they're so sensitive to his criticism. He's an outsider, he's a guy from the people's republic of Vermont. I mean, the interesting thing to me is that he may win the New Hampshire primary. And if he wins the New Hampshire primary, anything can happen.

HUNT: Boy, I hope this doesn't mean that Bob's deserting Al Sharpton.

But Robert's absolutely right, the political establishment hates him. You know, he was criticized on that "Meet the Press" performance, for instance, for saying that, he was asked how many active duty troops we had, he said between 1 and 2 million, we have 1.5...

SHIELDS: Yes.

HUNT: ... how many do we have in Iraq, he said 135,000, it was 146. George Bush wouldn't have done anywhere that well three years ago.

I don't think he'll be a finalist. I think he'll be a factor. The finalist will be Kerry, Gephardt, Lieberman, two of those three. I think the most interesting political question right now is whether Dick Gephardt can get the AFL-CIO endorsement.

O'BEIRNE: (UNINTELLIGIBLE)...

NOVAK: But he's got, he's got more, more oomph than they do, than the guys you mention, don't you agree with that?

HUNT: I think with the war over...

SHIELDS: Just a second, Bob.

HUNT: ... (UNINTELLIGIBLE)...

NOVAK: It's all right.

SHIELDS: You've talked too damn much tonight. Let's just -- I think Howard Dean is the most intriguing candidate thus far. He certainly has lighted the strongest bonfire and got more people involved in his candidacy. And let's be very frank about it, I mean, he was speaking for the followership and membership of the Democratic Party on their opposition to the war against Iraq, and...

O'BEIRNE: He sure was.

SHIELDS: ... it ain't looking too bad right now. I think... CARLSON: Well, you know, Democrats want an angry populist, but they don't want a nasty populist, and I think he's going to have to tone that down a little...

SHIELDS: OK.

CARLSON: ... to become the Bush fighter. They want, they want somebody going against him.

SHIELDS: And if Bob Novak really enjoys antiestablishment candidates that drive the party establishment, I'm surprised you didn't embrace John McCain more.

Coming up on the second of CAPITAL GANG...

CARLSON: (UNINTELLIGIBLE).

SHIELDS: ... our "Newsmaker of the Week" is the French ambassador in Washington, Jean-David Levitte. "Beyond the Beltway" looks at Iran as an emerging nuclear power with Howard -- Harvard scholar Jim Walsh. And our "Outrage of the Week," that's all after the latest news headlines.

(COMMERCIAL BREAK)

(NEWSBREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

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

I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Our "Newsmaker of the Week," Jean-David Levitte, French ambassador to the United States.

Jean-David Levitte, age 57, residence Washington, D.C., law degree and graduate, the Institute of Political Science in Paris.

Entered French foreign service in 1970, the staff of President Giscard d'Estaing from 1975 to 1981. Staff of President Chirac from 1995 to 2000, ambassador to the United Nations 2000 to 2002, and since then, French ambassador to the United States.

Al Hunt sat down with Ambassador Levitte at the French embassy in Washington earlier this week.

(BEGIN VIDEOTAPE)

HUNT: Mr. Ambassador, U.S.-French relations deteriorated badly over the war with Iraq. Is it still at a low point?

JEAN-DAVID LEVITTE, FRENCH AMBASSADOR TO THE UNITED STATES: No. I think now the situation has improved. The two presidents, President Bush and President Chirac, met in Evian during the G-8 summit. The two leaders have decided to put aside their difference over Iraq, to work together to give a boost to the Middle East process, to work together on the fight against terrorism, which is your number one priority and our number one priority, to try to solve the issues of North Korea and Iran together.

HUNT: Defense Secretary Donald Rumsfeld is canceling U.S.-French military exercises. He specifically disinvited the French from a September conference of Air Force commanders. Your reaction?

LEVITTE: We have a wonderful cooperation between the U.S. and French armies in the Balkans, in Afghanistan, where we have troops deployed in Kabul, and special forces with yours on the border with Pakistan. Few days ago, our troops helped 100 American citizens to get out of Liberia.

HUNT: Have you protested Mr. Rumsfeld's action on the September conference?

LEVITTE: It is his decision. We'll respect it.

HUNT: Iraqi reconstruction, will France contribute money?

LEVITTE: Yes, we will participate, and we have said so, with our European partners, because we need to give a chance to the Iraqi people to rebuild their country, to build democracy. We considered this war was not necessary, but the war is over.

HUNT: Isn't it only natural, then, that most of the big rebuilding contracts go to American firms?

LEVITTE: We don't see Iraq as a pie to be shared. For us, it's a burden to be shared. It will be very costly. So it's either the American taxpayer or the world community.

HUNT: Mr. Ambassador, final Iraq question. Do you believe that the failure so far to find any weapons of mass destruction, especially any nuclear capability, is a vindication of the French position?

LEVITTE: I would say simply, it's a vindication of the credibility of the U.N. inspections. Now we should have a second look on the credibility of the U.N. inspections. And I think it's important for other issues. Look at Iran, look at North Korea. If we could deploy U.N. inspections in these two countries, it would be a good use for you and for us.

HUNT: America dominates the world today, militarily, economically, and even politically. Is that inherently a good thing, or is it, in the French view, inherently destabilizing?

LEVITTE: No, it is not destabilizing. No, what is important to understand is that we are in a dangerous world. So in that world, which is dangerous, it's good news to have the American military might.

What we want to achieve in Europe is a more coherent European capacity in terms of difference. We are too weak. We have to solve the crisis next door to the European borders. Bosnia, Kosovo, are two examples where we failed, and we had to ask you to come to help us.

Now, economically I would argue that we have a strong European capacity, economic force. We have the euro, and it's good news for America.

HUNT: On a personal note, you presented your credentials to the White House a little more than six months ago. It's been a very turbulent time. How have you been treated in Washington?

LEVITTE: It seems to me it was six years ago, but at the same time, I must pay tribute to the courtesy of all my interlocutors. It's wonderful to be an ambassador in Washington. It's wonderful to travel coast to coast to explain the French position, because there is always a respectful and friendly debate. We may disagree, but we are friends.

(END VIDEOTAPE)

SHIELDS: Al Hunt, was the ambassador being unrealistically optimistic about relations between the United States and France?

HUNT: Mark, he was being very diplomatic, and he is a very effective diplomat. Tell you something interesting, I think the differences between the United States and France are far more profound than the differences between the United States and Germany.

In doing research for this interview, it became clear to me that George Bush actually sort of likes Chirac, and he can't stand Schroeder. Now, this is a guy who personal relations matter. I just -- I don't know what it means, but it's interesting.

SHIELDS: Bob Novak.

NOVAK: I think the United States and France, when all is said and done, with all this biting -- backbiting, have too much in common to stay alienated. And you may even see French troops before too long in Iraq.

CARLSON: Ambassador Levitte should invite the Congress and, say, THE CAPITAL GANG over for French fries so that can be renamed from freedom fries, and all will be forgiven.

SHIELDS: Kate?

O'BEIRNE: I'm not sure, Bob, that France and America do have that much in common in the post-cold war world. It does strike me that the French project, regardless of what the ambassador diplomatically says, is to organize the European Union as a counterweight to America power and prestige. That puts him at odds with us.

SHIELDS: We wouldn't have won the Revolution without them. I'm always be grateful to the French for that.

Coming up, the CAPITAL GANG classic, when the Supreme Court ruled against affirmative action in 1997. (COMMERCIAL BREAK)

SHIELDS: Welcome back.

Five and one-half years ago, the Supreme Court let stand a vote by Californians to prohibit racial preferences imposed by state policy. But the House Judiciary Committee the same week voted down a bill to end racial preferences.

The committee's chairman, Republican Henry Hyde of Illinois, was our guest as THE CAPITAL GANG discussed this issue on November 8, 1997.

(BEGIN VIDEO CLIP, November 8, 1997)

SHIELDS: Bob Novak, is affirmative action in trouble, or is it making a political comeback?

NOVAK: Mark, the American people hate racial preferences. It's a great issue for the Republicans, it's a terrible issue for the president. He's on the wrong place. But they're -- it -- with a -- playing a losing hand is dealt a losing hand on this. He is playing the race card.

REP. HENRY HYDE (R-IL), CHAIR, JUDICIARY COMMITTEE: There is general accord, agreement, among Republicans that quotas and set- asides and preferences are unconstitutional, they're wrong. But they're always saying, This isn't the time to bring it forward.

HUNT: Affirmative action divides this country right down the middle. California disapproved it 54-46. Houston approved it 54-46.

We had a poll last week, "Washington Journal" poll, 48-43 for. The country divides in half.

O'BEIRNE: The days of race preferences are numbered. The public, by 80 percent, hates them. The courts are increasingly suspicious of them. The man who's on the side of Republicans here...

(END VIDEO CLIP)

SHIELDS: Al Hunt, is it now obvious that these predictions, and frank predictions, of the death of racial preference were somewhat greatly exaggerated?

HUNT: Yes, it is, Mark, because affirmative action works, as we can see from George Bush's endorsement of the Supreme Court decision this week.

SHIELDS: Bob Novak.

NOVAK: I think those -- the statements that Kate and I made were exactly right. People still hate racial preferences. But the elite opinion drives the Supreme Court and the media.

SHIELDS: Margaret. CARLSON: I think it works. It worked for Justice Thomas, Justice O'Connor. I don't want to speak for Kate, but I wouldn't be on this panel without it, so I think it's a good thing.

SHIELDS: Well, you're awfully very attractive and smart, too. And so are you, Kate.

O'BEIRNE: Race preferences...

HUNT: (UNINTELLIGIBLE) Bob?

SHIELDS: No...

(CROSSTALK)

CARLSON: Yes, Bob is so (UNINTELLIGIBLE)...

NOVAK: (UNINTELLIGIBLE)?

CARLSON: Yes.

O'BEIRNE: Race preferences...

SHIELDS: If we had any judgment.

O'BEIRNE: ... Bob's right, the public doesn't like race preferences. Blacks do not like race preferences. But they're not imposed through the democratic system, they're adopted by the elite. And they necessarily engage in racial stereotyping and a racial stigmatizing that the public wisely rejects.

SHIELDS: Last word, Kate O'Beirne.

Next on CAPITAL GANG, Beyond the Beltway. Is Iran going nuclear? We'll be joined by Jim Walsh of Harvard, an authority on weapons of mass destruction in the Middle East.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

The U.S. government continued to voice alarm about Iran.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Iran has certain obligations. And what the United States is saying is that we have long believed that Iran might be using its civilian nuclear program for cover for efforts to build a military program.

(END VIDEO CLIP)

SHIELDS: Student demonstrations in Iran attracted the attention of the president.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is the beginnings of people expressing themselves toward a free Iran, which I think is positive.

(END VIDEO CLIP)

SHIELDS: Iranian authorities warned the U.S. not to take military action against Iran.

(BEGIN VIDEO CLIP)

MOHAMMAD KHATAMI, PRESIDENT OF IRAN (through translator): We know our right is to get access to advanced nuclear knowledge and its advantages for peace. Therefore, we don't accept any condition...

(END VIDEO CLIP)

SHIELDS: Joining us now from Los Angeles is Jim Walsh, executive director of Managing the Atom Project at Harvard University's John F. Kennedy School of Government.

Thanks for being with us, Jim.

JIM WALSH, HARVARD UNIVERSITY: Happy to be here, Mark.

SHIELDS: Jim, does its nuclear development make Iran a threat to the United States?

WALSH: Well, if we're talking about nuclear weapons, certainly nuclear weapons are inherently dangerous, and so it's a serious business. But I also think we have to keep it in perspective. We have to put it in context.

So is it the most dangerous nuclear threat in the world today? No, I think most of my colleagues would say that Pakistan, which is crawling with terrorists, has nuclear weapons already, and has given nuclear technology to North Korea.

That's a bigger nuclear-related risk right now than Iran.

The other thing you should ask when you want to put this into context is, how do we weigh the strengths of Iran versus the U.S.? And on every measure, the U.S. is far, far stronger than Iran, 37 times as big a military force as Iran does. We have thousands of nuclear weapons, Iran has zero nuclear weapons.

So yes, it's serious, but we shouldn't panic, and we shouldn't provoke a crisis when there isn't need for one.

SHIELDS: Bob Novak.

NOVAK: Do you think, Jim, that the very strong statements by the members of the administration -- we just had one by Dr. Rice -- are serving to provoke a crisis with the Iranian regime?

WALSH: Well, I do think that they are probably unhelpful. There's been a lot of talk about destabilizing Iran, having American- made solutions to the Iranian problem. And I think that's counterproductive, because what it does, it strengthens the hand of the hard-liners, the folks we want to lose here, it actually helps them.

And the second thing it does is, it increases the incentive that Iran has to seek a nuclear weapon in the first place. So I think even if you want to change that regime, the last thing you want to do is going around talking about it out loud in a really loose way.

SHIELDS: Margaret Carlson.

CARLSON: Jim, by the time the United States took action against Iraq, there were U.N. resolutions that had been violated, Iraq had invaded Kuwait, and Iran, for that matter. Iran has not been an aggressive country, although it -- now it does seem to have a nuclear program that could be converted to military use.

What does the United States have? Does it -- I don't believe there's a U.N. resolution calling for inspections. What framework does the United States have for putting pressure on Iran to cut back on its nuclear program?

WALSH: Well, it's a good question, Margaret. You know, where is the U.S. leverage here? And it's certainly not in something like trade sanctions, because we don't do a lot of trade with Iran, and we don't recognize them as a country. It's really the nonproliferation regime where we have the most leverage.

Why? Because we can request inspections of undeclared facilities. We can require that the IAEA, the International Atomic Energy Agency, go police and keep an eye on Iran.

So I think that's a powerful tool. And I think we also want to be trying to strengthen the nonproliferation constituencies within Iran. Iran is nothing but a giant argument. These guys argue over everything. There are thousand divisions, a thousand factions, and we want to make sure the factions that oppose nuclear weapons are stronger than those that want nuclear weapons.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Jim, beyond being persuaded of the value of having a nuclear capability, what lessons do you think Iran drew from the recent action in Iraq, that they can count on a divided world to stall around until they do develop a capacity? Or that America will act against world opinion if need be?

WALSH: Well, it's a great question. I can't really get into the minds of the Iranians. I've met with Iranians to talk about nuclear weapons in Rome and in Vienna, but it's a hard thing to try to speculate on their motivations. It seems to me two things are possible, and we'll just have to see.

One is that the U.S. action in Iraq makes them feel more secure and makes them feel like they better not go down the path towards nuclear weapons, or they'll get whacked.

The other possibility here, and some people say this is through North Korea, is that the lesson they'll learn is, We better build our nuclear weapon as soon as possible. The mistake that Iraq made was being sort of betwixt and between. We better get our nuclear weapon to protect us.

I don't know which of those lessons or other lessons they may have learned. But the more we threaten them, I think the greater the incentive that they will seek nuclear weapons.

SHIELDS: Al Hunt.

HUNT: Jim, the Russians have been very helpful in getting materials to the Iranian nuclear program. The Bush administration has said recently that the Russians now appreciate the danger and are being more cooperative with our interests in not getting as much material to the -- to Iran. Is that true? And will that make a difference?

WALSH: Well, I think it is true. I think it will make a difference. But this has been a struggle for some years now. I think President Putin has made clear that he wants to be careful of -- about any transfers or any relationship with Iran with respect to nuclear weapons.

But Menadim (ph) and other bureaucratic actors may have different views. So I think it's a tough one, but I think they are serious about it.

Even more important, I think, is perhaps the role of the Europeans. As I said, we don't do much trade with Iran. They're sort of persona non grata. But the Europeans have a lot of investment in Iran, have a long history of Iranian relations. And the E.U. has called on Iran to adopt a more aggressive set of rules for inspection. And I think the Europeans have a big and a positive role to play here.

SHIELDS: Hey, Jim Walsh, thank you very much for being with us. It's been enormously helpful.

THE GANG will be back with the "Outrages of the Week."

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week."

Thanks to Democratic Congresswoman Marcy Kaptor of Ohio, we now know that conservatives don't always mean it when they swear allegiance to the free market. How else to explain Title VIII in the House prescription drug bill, which forbid the secretary of health and human services from negotiating with the world's biggest drug companies to get a better price for prescriptions like the VA does for veterans for the nation's seniors?

Marcy Kaptor is right. By using free market pressure, we could save taxpayers and seniors billions. Bob Novak.

NOVAK: One senator after another took the floor in praise of Strom Thurmond, dead at age 100. The oldest combat officer in the Normandy invasion, governor of South Carolina, carrying four states for president, elected to the Senate in a write-in, longest speech in Senate history, first Southern senator with a black aide, first Deep Southern Republican senator.

Well, wait a minute. Didn't his colleagues force Trent Lott out as majority leader because he said nice things about old Strom? Maybe somebody owes Senator Lott an apology.

SHIELDS: Margaret Carlson.

CARLSON: Mark, for less than a rounding error in the tax cut going to millionaires, President Bush could save Americorps' 50,000 volunteers. Two hundred corporation executives ran a full-page ad in "The New York Times" this week urging just that.

In California alone, volunteers, who build low-cost housing, tear down crack dens, and clean up parks, will drop from 6,000 to 825 without new funds.

Once derided as welfare for yuppies, the program now has strong bipartisan support in Congress. Bush just needs to recall there's more to being president than cutting taxes.

SHIELDS: Kate O'Beirne.

O'BEIRNE: This week, "The New York Times" ran a boldfaced lie on its front page, literally. Its obituary marked the death of former Senator Thurmond, who changed his position on race issues decades ago, by falsely labeling him a foe of integration. This politician's support for racial equality was far more consequential than his behavior in the distant past.

Such is the treatment of Republicans on race issues. You don't imagine that Senator Robert Byrd's obituary would be titled, "Death of a Klansman," do you?

SHIELDS: Al Hunt.

HUNT: Mark, Governor Thurmond's 1948 presidential run as an arch-segregationist was shameful. However, unlike some of his peers, Strom in his 30 -- in his last 30 years adapted to a changing and a much better America on race.

On a personal note, his much younger wife and my wife were sorority sisters, and he once counseled me that we ought to have a boy, followed by a girl, then a boy, and finally a girl, the way he did.

When I looked baffled, he invited me to come by his office, and he would explain how it's done.

I regret I never made that visit.

SHIELDS: This is Mark Shields saying goodbye for THE CAPITAL GANG.

Coming up next, "CNN PRESENTS: The Road to Baghdad." At 9:00 p.m., "LARRY KING WEEKEND," former first lady Barbara Bush. And at 10:00, the latest news on CNN.

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Versions of Medicaid Reform Pass House, Senate; Dean Announces Run for Presidency>