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The Lead with Jake Tapper

Will Gray Davis Remain Govenor Of Californaia?; Can The Bush Administraion Turn This Economy Around?; Will U.S. Troops Be Welcomed In Liberia?

Aired July 19, 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.


AL HUNT, GUEST HOST: Welcome to CAPITAL GANG. I'm Al Hunt, with Robert Novak, Margaret Carlson, and in Boston, Mark Shields.
Our guest, we are privileged to have Republican Congressman Peter King of New York.

Peter thanks for ciming in.

REP. PETER KING, (R)-NEW YORK: Great to be here it really is.

HUNT: It is good to have you. The war in Iraq came under heightened Democratic criticism while the new U.S. commander described continuing conflict as guerrilla warfare.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY, (D)-MASSACHUSETTS: The American people want to know how long their sons and daughters are going to be shot at in Iraq.

GEN. JOHN ABIZAID, U.S. CENTRAL COMMAND: I think describing it as guerrilla tactics being employed against us is, you know, a proper thing to describe in strictly military terms.

(END VIDEO CLIP)

HUNT: President Bush's spokesman qualified his earlier admission of misleading intelligence.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: Did Iraq seek uranium in Africa, an issue that very well may be true. We don't know if it's true, but nobody, but nobody can say it is wrong.

(END VIDEO CLIP)

HUNT: CIA Director George Tenet, behind closed doors took the blame for the misinformation.

(BEGIN VIDEO CLIP)

SEN. BOB GRAHAM, (D)-FLORIDA, PRESIDENTIAL CANDIDATE: The problem is not George Tenet; the problem is George W. Bush. This is not an isolated incident. (END VIDEO CLIP)

HUNT: The British prime minister came to Washington to defend the decision to go to war.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: If we are wrong, we will have destroyed a threat that, at its least, is responsible for inhuman carnage and suffering.

(END VIDEO CLIP)

Mark, did Tony Blair's eloquence stifle criticism of George Bush?

MARK SHIELDS, CAPITAL GANG: No it didn't. I mean, Tony Blair's been enormously indispensable to both George Bush and Bill Clinton in the Balkans, as an advocate Al. But, you know, unless he convinced George W. Bush, a lesson that Peter King himself has practiced long and hard, and that is, that candor is not always simply the best policy, it's great politics.

After he relied upon very faulty information in the Bay of Pigs, and that failed invasion in 1961, President John Kennedy took full responsibility and said, "Success has a 1,000 fathers, failure is an orphan." He went to 81 percent approval in the polls because people admire a leader who will stand up and say, "I'm responsible," and that's something that George W. Bush has not taken responsibility for his own State of the Union speech.

HUNT: Peter, no doubt Tony Blair was just positively eloquent. He got a wonderful reception from you all up there. Do you agree with Mark though that doesn't rub off on George Bush?

REP. PETER KING (R), NEW YORK: No I don't. I could disagree with Mark, where he compares the Bay of Pigs to Iraq. Bay of Pigs was as terrible loss. Iraq is a victory, a qualified victory, but certainly it's a victory. And I believe we are going in the right direction. There's many tough weeks and months, maybe years ahead, but to compare it to the Bay of Pigs, I think, is wrong.

Also, I think that Tony Blair was very eloquent, very articulate, and I think he made many of the Democratic critics seem insignificant by comparison, where he was dwelling on the global issues, and they are trying to raise, I think, very small issues and try to -- you know, nobody needs Teddy Kennedy banging the podium to know that we have problems in Iraq, but we should be focusing on what to do, not just be ranting and raving.

HUNT: Small problems, Margaret?

MARGARET CARLSON, CAPITAL GANG: Definitely focusing on what to do. It's just remarkable how unprepared the Bush administration was to run Iraq at the end of the war. And we should have known when Rumsfeld said that, when Secretary of Defense Rumsfeld said, "Well, looting's OK. Let's not worry." And then the place dissolved into chaos, and absolutely no law, no order.

But you know, it's not that we can stipulate that Saddam Hussein being gone is good as you did. But still, the United States has to articulate cleanly and clearly, and honestly, the basis for going to war. And that's what's now in question. If we weren't in so much trouble in Iraq, and soldiers weren't dying, and the prospects for soldiers being there forever and ever, wasn't before us, I'm not sure the American people would care so much. But they do as a, as a result of that.

ROBERT NOVAK, CAPITAL GANG: This is about the first time I've ever agreed with every word Peter King said.

And first time, you're in trouble.

HUNT: Peter is in deep trouble. He really was -- you know, he's been such a great guest.

NOVAK: I tell you, it is such a stretch from my view from Mark Shields' to compare the Bay of Pigs to this mistake on yellow cake uranium ore. The Bay of Pigs was one of the great catastrophes; it was a terrible performance by John F. Kennedy. He let down the freedom fighters in Cuba. We don't want to rerun that story ...

HUNT: No we don't.

NOVAK: ... but it is, but there's no comparison. It's outrageous to even make that comparison. The other thing is that the -- Prime Minister Blair's speech, which was one of the greatest speeches I've ever heard, and I'm not a great fan of Tony Blair, was absolutely knock out this feeding frenzy that the Democrats in both Houses were trying to build up over this one line in the State of the Union, trying to use that as something to bring down the President.

HUNT: I want to go back to Mark Shields. I'm not sure I agree with brother Novak here. It seems every day when you pick up the "Washington Post" there's a new story that comes out about something they didn't tell us beforehand about this supposed one line, which was very essential to their reason for going to war. Ends up Don Rumsfeld said he didn't know about it. There was a four-star general who went over there last year and came back from Niger and said there's nothing to it. This story doesn't go away, does it?

SHIELDS: It doesn't go away, Al, and I, and my good friend Peter, I'm disappointed in. Novak I expect it. I wasn't comparing the military operations, I was comparing the two leaders and their candor, and their willingness to stand up and say, and "I'm responsible." That's where the buck stops here. Remember Harry Truman's sign on his desk? That's it.

George W. Bush, the White House Web site Al, issued a picture this week. It showed George W. Bush going over the State of the Union address word-by-word, line-by-line as they said. And somehow this thing just magically appeared. If he'd ...

HUNT: Let me, let me, let me ... SHIELDS: ... if he's run just a ...

HUNT: I want to turn, I want to turn to Iraq though. Peter, this week the Indians, the government of India said, we're not going in without a U.N. resolution. Hungary, the new Europe, was going to help us in Iraq; they're going to send 133 truck drivers. Don't we need to internationalize this some way quickly?

KING: I think it certainly helps to get more involved, so long as though we're not turning it over to the U.N. We saw what happened in the Balkans when the U.N. was running things. But I just go back to what Mark says, I don't think there has been an intelligence failure, and I'm one of those people, I believe that President Bush was wrong to acknowledge an error, even in using the British intelligence. I mean, there's nothing wrong with laying out all the intelligence you have, none of which has been disproven, and saying in addition to that, our closest ally with one of the most reliable intelligence agencies in the world, says they were attempting to purchase uranium.

(CROSSTALK)

KING: I don't know what this is all about. I really don't.

NOVAK: Can I suggest what's really going on here, is you have a ...

(CROSSTALK)

NOVAK: ... it's all politics, Al. I'm glad you can read my mind after all these years. It's all politics, the Democrats feel that they have to bring down this president, and this is the only effective way of doing it. They thought that -- I mean, I think perhaps that they made a mistake as to whether it can be done, but just as an analyst, that's what they are trying to do.

It's very interesting, just this week the number of dead Americans in the Gulf, in this war, reached the same level it was in the 1991 Gulf War. Now in the 1991 Gulf War, everybody said, gee, what a small figure. Now it's the same figure, they say boy, we have a lot of deaths. It's all politics, Al.

HUNT: Let me give you some -- Margaret, let me give you a couple figures. We have 181,000 troops over there, counting support troops in Kuwait. There's suggestions we may want more now. Donald Rumsfeld was proven wrong there, and yet we turn around, we're going to have to call up a National Guard unit now.

There was a military officer quoted in our paper this week, he said, "He's never seen a military stretched so thin as it is right now." Troops over there are going public saying we want to get out. This is really a tired military.

CARLSON: That's the longest question I've ever heard, Al.

KING: It is a long question. HUNT: It's a long occupation it seems.

CARLSON: And, you know, the administration denied that there was going -- that this was going to be needed. And in fact, Shinseki was put down for that, and nobody went to his retiring party as a, as a, as a result. Listen ...

(CROSSTALK)

CARLSON: ... I just want to get back to something. You know, a president knows more than anyone in Congress about the intelligence reports and what's there. He knows even more than Bob Novak here and the United States, and the people in it, have to be able to rely on the president. And what we know now is that it probably wasn't true. That's what they know.

KING: Everything he said was accurate.

CARLSON: No.

KING: Everything he said was accurate.

CARLSON: That Ambassador Wilson had found out that it was not true prior to his saying it.

KING: No, Ambassador Wilson said, the small amount of information the CIA had could not be verified. That's totally different from what British intelligence has.

HUNT: Peter King, you have the last word on this segment. But Peter and the gang will be back with the deepening deficit.

(COMMERCIAL BREAK)

HUNT: Welcome back. The Bush administration predicted budget deficit rising to $455 billion and $475 billion for the next two years.

(BEGIN VIDEO CLIP)

JOHN SNOW, SECRETARY OF TREASURY: As a percentage of GDP it's not as high as it's been, in fact, it's well in life with many prior periods. Over time it's going to come down.

(END VIDEO CLIP)

HUNT: At the same time, Federal Reserve Chairman Alan Greenspan made this economic forecast.

(BEGIN VIDEO CLIP)

ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Domestic financial developments apart from the heavy dose of fiscal stimulus now in play, to bolster economic activity over coming quarters.

(END VIDEO CLIP) HUNT: Bob, is Dr. Greenspan saying that deficit really doesn't matter?

NOVAK: He's really saying that. Isn't that -- isn't that tough on the Democrats that the master of the universe says it doesn't matter. Of course, Dr. Greenspan has got to say things are getting better, because he didn't make a big enough cut the last time. He made some disasterous increases in interest rates that have caused the situation that we're in.

I think -- I think the timing is a little worrisome. It's not the deficit is not the problem, the deficit is a symptom, not a cause, and thank goodness there was a tax cut. I was with some CEOs the other night and he said, if it wasn't for these tax cuts, we'd be going into another depression -- recession.

HUNT: And I bet you they weren't helped much by these tax cuts. Margaret Carlson, what do you think?

CARLSON: The deficit as a share of the GDP is comparable to what plunged Argentina into crisis. And you're suggesting that Dr. Greenspan is compromised by his own actions, so he's saying the deficit doesn't matter? The deficit does matter, when it's this big, and just like the administration possibly cooked the information on the war, it is far less serious to do it on the budget, but indeed they predicted an $80 billion deficit and then a balanced budget in '02, in order to justify tax cuts that aren't helping anybody. I mean, we've lost another two million jobs since the '01 tax cut, and you know, it's a very costly way, giving tax cuts to the rich, to try to get stimulus.

HUNT: Even though that prediction of an $80 billion deficit was made in February of 2002, six months after 9/11. They were $375 billion off. Doesn't give you a lot of confidence in this administration's economic predictions, does it?

KING: No, but I do -- no, again, I'm not even into predictions, but I do believe this one time again I also go with Bob Novak, that deficits are only important if they continue and they are a symptom of slow economic growth, and that is -- first of all, it was a recession that the Bush administration inherited from the Clinton administration. We've had 9/11, we've had Afghanistan, we've had Iraq. The only way to really stop deficits is to grow out of them. You do it by across-the-board tax cuts. Alan Greenspan admitted that the other day. It's worked under Reagan, it worked under Kennedy, and I am a true blue supply-sider along with Bob Novak, Arthur Arthren (ph) and Jack Kemp.

HUNT: And a very promising Crongressional Career, twic in one week. Mark Shields, in Boston, as I understand Bob Novak, all the good things that will happen will be due to tax cuts, and all the bad things are the fault of Alan Greenspan. Right?

SHIELDS: You got it, Al. I've got to say, another line from that memorable State of the Union speech is "we will not pass along our problems to future Congresses, to future presidents and to future generations." Well, we're just passing along $2 billion in interest payments over the next 10 years to the people coming back from fighting that war in Iraq and the next generation.

We've just said we're going to give ourselves tax cuts and we're going to get you to pay the bills. That $2 billion in interest, Al, goes to pay bond holders, one half of whom live overseas, who will finance our deficit. They don't put a book in a child's hands, they don't fulfill a prescription for an elderly person, they don't do anything worthwhile except pass money on to those people who can buy bonds. It's bad public policy.

NOVAK: Senator Bob Graham who's running for president I always thought a very intelligent guy, until he started running for president, he has come out with an increase in taxes in the upper bracket. And...

SHIELDS: Yes, he has.

NOVAK: Did you see that? And the interesting thing -- on "Meet the Press" last Sunday, he said that the problem with the Bush tax cuts is that the people who get these tax cuts buy stocks and bonds. They just buy more stocks and bonds. Isn't that terrible? It's just the thing the Democrats now have gotten to the point where they don't realize, as John F. Kennedy did, that if we buy stocks and bonds, that helps the economy.

CARLSON: Tax cuts for the rich generate very few jobs, for the deficit buck. It is not a good way -- and temporary deficits might work, but deficits as far as the eye can see, I don't think so.

HUNT: Congressman King wants to weigh in here.

KING: Yes, tax cuts worked under John Kennedy, worked under Ronald Reagan...

CARLSON: Temporarily.

KING: ... and when we cut the capitals gains tax cut in the late '90s, that's what brought about the balanced budget.

HUNT: Well, I would point out that in 1993, I won't mention any names, people said that Bill Clinton's tax increase was going to be horrendous, it was going to wreck the economy. And of course, all it did, Mark, correct me if I'm wrong, was usher in the best economy of our lifetime. Is that wrong, Mark?

SHIELDS: Al, Al, you won't name names, I will name names. Robert D. Novak said that.

NOVAK: You know, I am going to tell you something, I'm going to tell you something personal, which I usually don't on this program. I am so bored hearing that from you, Al, and from Mark, all -- you were so wrong about -- about that. If it hadn't been for a Republican Congress, you wouldn't have had that recovery, and you know that very well.

(CROSSTALK)

NOVAK: No, you're not. Because you never bore me, Margaret.

HUNT: You know, I've said I've always been very supportive of Alan Greenspan, one of the great public servants of our time, but when he says that we ought to cut taxes and then cut spending, I want him to go out to those -- those -- those people who are struggling to send their kids to college and say, I tell you what, we're going to cut your spending so rich people can get a tax cut. That's totally unacceptable to me.

NOVAK: I'll tell you what...

KING: Tax cuts brings growth all across the board. As far as the Clinton tax increase, the fact is, there was already six or seven quarters of economic growth before the Clinton plan even took over, so he was just riding along the benefit of the economic growth that was already in place.

NOVAK: The thing to worry about for the Republicans and for this president is a jobless recovery. That is a real problem, the idea of these morons talking about deficits, it's the unemployment figure...

(CROSSTALK)

HUNT: Let me tell you something, we didn't have any jobless recovery when Bill Clinton increased taxes, Bob Novak.

Next on CAPITAL GANG, should Gray Davis say adios to Sacramento?

(COMMERCIAL BREAK)

HUNT: Welcome back. In California, twice as many signatures as required have been submitted to put on the ballot to recall Democratic Governor Gray Davis. Meanwhile, the state government is deadlocked over a fiscal crisis.

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS, (D)-CALIFORNIA: Republicans in Sacramento are wiling to take California to the financial brink simply to advance their narrow partisan agenda.

(END VIDEO CLIP)

HUNT: A new field poll shows rising sentiment to recall Governor Davis, 51 percent to 43 percent. However, the governor's lawyers are mounting a legal challenge to the signatures. Margaret, can Gray Davis survive?

CARLSON: Not by challenging the signatures, because they're too many, he's not going to throw out that many signatures. Gray Davis will survive if Democrats hold together and put no one on the ballot. Otherwise, Gray Davis will be gone. And if one Democrat cracks and gets on the ballot, then there are going to be lots of Democrats on the ballot. It's just going to be a mess. And Gray Davis can discredit the process.

It's a terrible process. It's not democracy. It's having a second kick at the cat.

(CROSSTALK)

NOVAK: ... he really did a bad job...

CARLSON: He did do a bad job. That is very bad provision.

NOVAK: I will say this, that this is Russian roulette, or California roulette that Democrats are playing on not putting a candidate on. Now the theory is that this creates solidarity to go against the recall, but if they have the recall, and I think it will pass, then -- and there's no Democrat on -- then a non-Democrat will be elected. I mean, how can they possibly play that game, if they're interested in their own party? I think someone will crack, and I think it will be somebody prominent on the Democratic side.

HUNT: Mark Shields, I slightly disagree with Bob in that I think that Davis conceivably could win this thing if no Democrat gets on the ballot, but I can't imagine the Democrats having the discipline not to get on the ballot.

SHIELDS: Discipline and Democrats, Al, are rarely used in the same sentence, but I have to say this, this will be resolved over who is the face of each side in this struggle, because there is going to be too many candidates on whether the Republicans or whatever, and is it going to be the face of the schoolteacher who's going to have her classroom cut, or the nurses, or the cops on the beat that is going to be put at risk by this whole process, or is it going to be Gray Davis, who is manifestly unpopular, or will it be the right-wing people who are behind the whole move?

So I think that's really the dynamic here. It's not Gray Davis, a referendum on him, it's really the uncertainty and really the precariousness of the state of California as a consequence of this process.

HUNT: Peter, you don't really have a dog in this fight, but how does it look to you?

KING: Well, first of all, I think recall is a bad idea, but I guess if any governor should be recalled, it's Gray Davis. When I hear from talking to members from California, is that if Dianne Feinstein puts her name on, she would be a front-runner; if not, it's Arnold Schwarzenegger. Again, I'm just telling you what I hear from members from California who -- that's all they talk about as they walk back and forth to vote.

NOVAK: I mean, I was fascinated by Mark's analysis that somehow it's going to be a nurse and first responders, that Democrats try to make every issue into whatever it is, even going into Iraq or Liberia, is the nurse and first responder issue, but -- because I don't believe that's what it is -- but Mark has been out there, and he's a good reporter, the people hate -- they hate Gray Davis. It's just... CARLSON: Then why didn't Bill Simon win?

NOVAK: Because, Margaret, they didn't know he was going to raise taxes that much. If they knew he was going to raise taxes, he'd be dead, and that's what they're so bitter about, that he fooled them.

HUNT: I think they are bitter because they don't feel that there was a race last time, that Gray Davis ducked all the issues and just attacked the Republicans. I think that they would have been even more offended by some kind of draconian cuts in spending, Margaret, because that same poll shows even though Gray Davis is very unpopular, they don't want any of these Republicans elected.

CARLSON: Right. They'll only win by getting a plurality, and then California is going to be governed by, you know, Arnold the Terminator, getting 6 percent.

NOVAK: What if John Burton, who we all know, president of the state senator, detests Gray Davis that he says the hell with it. This is my last chance I'd love to be governor of this state. He's put his name.

(CROSSTALK)

KING: I think Gray Davis was also hurt by the fact he was too cute last year. He interfered with a Republican primary, trying to undermine Dick Riordan, and all that's going back to haunt him now. You can't be too cute in politics for too long before you get nailed.

HUNT: Peter, if you're a Republican, do you want to be in charge of California right now? It's such a mess. Wouldn't you rather have Gray Davis mired in...

KING: (UNINTELLIGIBLE) Republicans have Gray Davis as the governor next year when Bush is running for reelection, Republicans trying to take seats, yes.

HUNT: Mark Shields, you've been out there, jump in.

SHIELDS: OK, I'll just say this, if I'm Karl Rove and George W. Bush, the last thing in the world I want going into 2004 trying to capture California and deprive the Democrats of any chance is an energized Democratic Party and a polarized state of California, and I think that's one of the consequences of this whole -- this whole debacle.

HUNT: Everybody, we're going to put you on the spot. A year from now, who's going to be the governor of California? Margaret Carlson.

CARLSON: Oh, Al. Gray Davis.

HUNT: Peter King?

KING: Mary Bono.

(CROSSTALK)

HUNT: Bob Novak.

NOVAK: Arnold Schwarzenegger the Terminator. And he's really a human being, he's not a robot.

HUNT: Mark Shields?

SHIELDS: I stand with Margaret. Gray Davis will be governor.

HUNT: You're going to stick with Gray Davis?

SHIELDS: I am. Yes.

HUNT: I am going to -- and Peter makes me very uncomfortable -- I am going to align myself with Robert Novak. I've seen the damage is done to you already tonight.

(CROSSTALK)

HUNT: I think Arnold Schwarzenegger, because I think some Democrat is going to jump in there. I don't think Dianne Feinstein will, and if she does, she will win.

NOVAK: But I think...

SHIELDS: So who's it going to be, Al? Who?

NOVAK: He said Schwarzenegger.

SHIELDS: Oh, Schwarzenegger?

NOVAK: Yes.

(CROSSTALK)

NOVAK: I think none of you understood the -- I hope Peter did -- but the rest of you didn't understand the tax referendum...

KING: I understood. I understood.

NOVAK: And that's what you have, you have a grassroots movement there. It's emotional, it's anti-government, it's anti-tax, and they don't really care who's the governor, as long as it's not Gray Davis.

HUNT: I just want to say that I hope for the future of one of the greatest politicians in America that this King-Novak alliance comes undone quickly.

Peter King, you were one of the great guests we ever have on CAPITAL GANG. I really want to thank you for being with us.

Coming up in the second half of THE CAPITAL GANG, our "Newsmaker of the Week" is political editor Chuck Dodd. "Beyond the Beltway" looks at Liberia with CNN's Jeff Koinange, direct from Monrovia, and our "Outrages of the Week." All after the latest news headlines. (NEWSBREAK)

(COMMERCIAL BREAK)

ANNOUNCER: From Washington, THE CAPITAL GANG.

AL HUNT, CNN ANCHOR: Welcome back to the second half of CAPITAL GANG. I'm Al Hunt with Robert Novak, Margaret Carlson, and in Boston Mark Shields.

Our newsmaker of the week is Chuck Todd, Editor-in-Chief of the "Hotline." Chuck Todd, age 31, residence Arlington, Virginia, religion Jewish, majored in political science and music performance at George Washington University, joined the "Hotline" in 1992, writes two columns a week for national journal affiliates, was once named by "George" magazine as one of the 50 most influential people in American politics.

I sat down with Chuck Todd earlier this week to talk about the report of fundraising by Democratic presidential candidates.

(BEGIN VIDEOTAPE)

HUNT: Chuck, the biggest shocker was Dick Gephardt, why the bad money showing?

CHUCK TODD: Their campaign said it was because they've got some fundamental flaws in their operation. They better say that because if it's because of lack of support or lack of enthusiasm it's a serious problem.

HUNT: Could Gephardt be the first victim of McCain-Feingold, the ban on soft money, in the sense that he spent most of the past decade raising big bucks for the DCCC and hasn't adapted to this new system?

TODD: That's an interesting point. You know, one of the things that Gephardt people used to tout two years ago, oh, we've raised more money. We've been in more living rooms and, you're right, it's all soft money that he raised and the big chunks he was very good at getting million dollar checks, getting $250 matchable checks is a whole other story and it looks like he's a little rusty.

HUNT: Money trouble also for Joe Lieberman who has less cash on hand than his main rivals, cut staff salaries, and sacked his chief fundraiser this week, why?

TODD: The number itself that they raised, $5 million was a respectable amount. Because they fired their fundraiser all of a sudden we had to take another look, oh, what's wrong, you know?

HUNT: But he's not raising the kind of money that people thought Joe Lieberman could raise.

TODD: He's not. How is it that guys like Howard Dean and John Edwards, who nobody ever heard of four years ago, are out raising the former nominee for vice president who has appeared on every state ballot in this country? That is a head scratcher for a lot of people.

HUNT: John Kerry has raised the most money but the stunning surge this quarter was Howard Dean, much of it from the Internet and more small contributors than anybody else. Is it possible that in January with those matching - the feds match up to $250, that Howard Dean with so many small contributors may actually have as much, if not more, money than anyone else including John Kerry when he gets the fed match?

TODD: Absolutely. I mean it could be up to anywhere from 35 to 50 percent of his money depending on whose estimation you believe of what he actually raises.

HUNT: Has the Internet changed political fundraising on the presidential level and politically or ideologically what sort of candidates have a comparative advantage?

TODD: I think it is the ideological candidates that do have the advantage here. It's the ones that can tap into some anger. So, first for Dean it was the Iraq War but then it sort of built because he's been the guy. He's been the angry guy. He's been the guy showing some disdain for Bush being more aggressive against Bush.

HUNT: John McCain did quite well on the Internet four years ago and people didn't think of McCain as an ideological candidate.

TODD: You know he was the outrage candidate. He was the outsider candidate, the outrage anger side of the aisle.

HUNT: Absolutely. Historically, the two best leading indicators for success in the nominating process have been money and the strength in the early contest. The only two candidates who are at the top tier in both those are John Kerry and Howard Dean. Are they now the frontrunners?

TODD: You can't argue against that. Is there a frontrunner? No, but they're certainly the only two on stage right now. The other guys are trying to figure out how to get in the story. Dean and Kerry get into the tops of stories. Both are in their either second or third in Iowa. If you believe some polls being made. They even pulled ahead of Gephardt in Iowa and they're first and second in New Hampshire so those look like frontrunners to me.

HUNT: You mentioned George Bush. All the Democrats pale in the fundraising chase next to the money that the president has raised, $34 million. How important will Bush's money advantage be? Will it be determinative?

TODD: It's only determinative when it comes to what the Democrats do financially. Are they going to take the General Election money? Are they not? Collectively, the Democrats are probably going to raise $150 million just for their primary, these nine candidates.

Well, that means there's another $150 million, maybe more, for a person that's actually the Democratic nominee. You know, once a Democrat becomes a nominee it is more rock star and that means they might be able to stay at least within shouting distance of Bush's money. They're never going to be the same but they might be able to cut the advantage instead of 4-1 down to 2-1 and that's a big deal.

(END VIDEOTAPE)

HUNT: Mark, just how bad for Congressman Gephardt is the news from the financial reports?

MARK SHIELDS, CNN ANCHOR: Well, Al, it was disappointing for Dick Gephardt make no mistake about it. He does still have $6 million on hand which puts him in the top tier I guess.

But I think where it hurts him politically is ironically with the AFL-CIO endorsement which he's been seeking that those who are opposed to endorsing Dick Gephardt within the AFL-CIO will say, look, what's the point of endorsing a guy who hasn't been able to raise that much money which would be a difficult and troubling message for them to send.

HUNT: Bob, your take?

ROBERT NOVAK, CNN ANCHOR: You know it's a question does the status of the candidates reflect their money raising or does their money raising reflect their status?

HUNT: Right.

NOVAK: They work on each other and I do believe that the money raising does reflect the rise of Howard Dean and the fact that Dick Gephardt has not set any fires going. There's been a lot of cases where he goes out in Iowa and they say why did you vote for this war and he's apologizing.

So, it's a very left of center, antiwar electorate and Senator Kerry has moved well over to the left from his previous position on the war. Gephardt has kind of stayed where he is and I think that's what his problem is.

HUNT: Margaret, the other guy who had a problem was Joe Lieberman. I mean he did raise $5 million as Chuck Todd pointed out but he's not doing nearly as well as Kerry, Dean, or John Edwards in fundraising.

MARGARET CARLSON, CNN ANCHOR: Right, and John Edwards is getting - his money looks tainted because it's all from trial lawyers.

HUNT: I'll point out that Bush got more from lawyers.

CARLSON: But still in that money primary it puts him ahead, Al, that is the most depressing interview I've seen in a long time and it's not just because you were wearing an orange jacket.

HUNT: (Unintelligible.)

CARLSON: It's that money is going to - the money primary is now so huge and so important that a guy like Gephardt whose philosophy squares with the AFL-CIO may not get their endorsement because he hasn't raised enough money.

NOVAK: But, see I don't think it's because he hasn't raised enough money.

CARLSON: It's a chicken-egg hard problem.

NOVAK: Yes, exactly.

CARLSON: But still it's depressing.

HUNT: Mark, let me go back to you on Gephardt because actually he's running fairly well in the polls, certainly in Iowa and even in the national polls. He got a lot of attention with his healthcare but the money just isn't coming in. Is that Gephardt's campaign or is that the lack of support for him?

SHIELDS: Well, I think you put your finger on it, Al. I mean Dick Gephardt has been one of the champion fundraisers for the past ten years as the Democratic House leader but he's been spending extraordinary amounts of time with people and individuals who could write six-figure checks or organizations and that's entirely different than going out and raising it in $500, $250, $2,000 clumps.

But, he did get the endorsement of the Machinist Union, which is not unimportant given the ceilings on hard money. All of a sudden, organizational and institutional support and if he gets the Teamsters that would probably put him back in the ball game.

NOVAK: Let me differ from you just a little bit. I don't think he's doing that well in the polls if he's running even with Dean in Iowa. He was supposed to be doing much better in Iowa than that.

HUNT: Well, the last word goes to Robert Novak.

And, coming up next, THE CAPITAL GANG classic when Gray Davis was riding high.

(COMMERCIAL BREAK)

HUNT: Welcome back.

Five years ago, Democrat Gray Davis was about to be elected governor of California against Republican Dan Lungren. There were forecasts and appraisals by your CAPITAL GANG on October 31st, 1998.

(BEGIN VIDEOTAPE)

CARLSON: Lungren is running a campaign from several decades ago as if Davis is some liberal, soft on crime candidate and he just isn't, and Davis will beat him soundly.

UNIDENTIFIED FEMALE: After 16 years of Republican governors, I guess the time for a change theme is working. I think every generation ought to have a Democratic governor just so they appreciate how bad it truly is. HUNT: He'll win by about the same margin that Ronald Reagan won when he first became governor of California and he'll wreck what otherwise would have been a festive night for the Republicans on the State House level.

SHIELDS: He's running better than Democrats have in California among men than any other Democrat and he is paying dividends is his service in Vietnam where he won a Bronze Star as an Army captain and it's insulated attacks the Republicans have made against him as a liberal - Bob Novak.

NOVAK: Gray Davis, he's the first White man the Democrats have nominated for governor of California in 16 years. This is going to be a terrible night for the Democrats. The great bright spot is going to be Gray Davis in California.

(END VIDEOTAPE)

HUNT: Bob, we were awful effusive in our praise of Gray Davis five years ago.

NOVAK: All the world loves a winner, particularly us, and we were right for once and we saw he was going to win. It wasn't a particularly edifying campaign but he did make mistakes, didn't stand for much of anything in his reelection campaign, but he looked good at the time. He didn't know that a huge budget deficit was coming down on him.

HUNT: Margaret, remember when?

CARLSON: Al, these were - yes, I do. These were predictions more than praise and Gray Davis had a very weak opponent in Dan Lungren as I think we pointed out on that program and Gray Davis is the victim of what so many other governors are victim of which is, hey, deficit governing.

HUNT: And, Mark Shields, how does it look from across the continent?

SHIELDS: Well, Al, in 1998, you know we in the press are suckers. We always root for the underdog and Gray Davis was the underdog that year. He was facing two primary opponents, multimillion campaigns.

He was outspent six or seven to one and he beat them both with a slogan come up with by David Doak and Tom O'Donnell, which was experience that money can't buy and from that point he coasted against Dan Lungren again making him the issue in the campaign, his challenger. I think that strategy has run its course at this point in California for Gray Davis.

HUNT: That night actually was a surprisingly good night for Democrats across the country.

Next on CAPITAL GANG, beyond the beltway looks at Liberia with CNN's Jeff Koinange in Monrovia. (COMMERCIAL BREAK)

HUNT: Welcome back.

President Bush and U.N. Secretary-General Kofi Annan met in Washington to discuss a possible U.S. peacekeeping force for Liberia.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Any commitment we have would be limited in size and limited in tenure.

KOFI ANNAN, U.N. SECRETARY-GENERAL: We have more or less agreed to a general approach on the Liberian issue and I am very pleased with that.

(END VIDEO CLIP)

HUNT: President Bush has demanded that Liberian President Charles Taylor resign and leave the country.

(BEGIN VIDEO CLIP)

CHARLES TAYLOR, LIBERIAN PRESIDENT: I have decided to make the ultimate sacrifice. I have decided to be the sacrificial lamb that you, our people, will need.

(END VIDEO CLIP)

HUNT: However, President Taylor remained in Monrovia as fighting resumed.

Joining us now from Liberia's capital is CNN African Correspondent Jeff Koinange. Jeff, is everybody there waiting for the Americans to arrive?

JEFF KOINANGE, CNN AFRICAN CORRESPONDENT: You know, Al, for lack of a better word desperately so. As you know, Al, Liberia was formed way back in 1822 as a state for freed American slaves, so Liberians do feel that connection to the U.S. and Liberians on the ground tell me everyday whether the U.S. sends two, 200, or 2,000 peacekeepers they will be more than welcome to get them out of the present situation.

As you also know, President Taylor here has said he won't leave unless the Americans arrive. The Americans say they will not come until President Taylor leaves, so right now this country is somewhere between a rock and a hard place as they wait to see which side blinks first.

HUNT: Bob.

NOVAK: Jeff, the Americans are talking about sending a few peacekeepers, not a big fighting force like was sent into Iraq. Fighting has broken out again. Do you think just a few peacekeepers would be adequate that the rebels would submit to the American peacekeeping operations and you wouldn't need a full-fledged military operation?

KOINANGE: Not at all. On the ground here it's all psychological at the end of the day. If they see a few Americans with uniforms, with arms on the streets of Monrovia, believe me no one would want to engage them at all.

They would if it was a foreign African force but for Americans, Liberians know. Again, this is not Iraq. These people have a connection with America.

If they see the Americans on the ground they would feel these folks are here to help and they're not here to do any harm to them. So, yes, psychologically it would play a big role even if it's just a few peacekeepers on the ground.

HUNT: Margaret.

CARLSON: Jeff, in August of 2000, Richard Holbrooke created a war crimes court calling Charles Taylor the Milosevic of Africa, his crimes, his atrocities exceeding those of Milosevic.

Now, is there a chance, a danger that Charles Taylor could get away with a soft kind of protected exile and not be brought to trial or be made to pay for his war crimes?

KOINANGE: You know what, if it's up to the prosecutors in neighboring Freetown they will make sure that they pursue Charles Taylor wherever he goes; in fact, they're saying they're waiting for him to step down and seek his political asylum in Nigeria and they did insist in press statements all over the place they say we will pursue him wherever he goes.

So, there's a chance somewhere down the line. It may take a year. It may take five years. They will pursue him and they will take him to that court in Freetown to answer those charges.

HUNT: Mark Shields.

SHIELDS: Jeff, you heard President Bush say that any U.S. force would be limited in size and in tenure. How long, how large a force in your own judgment and how long would it have to be there to really bring stability to most of Liberia and to that whole region?

KOINANGE: Right. Let's first remember Liberia has been at war for, what, the last decade and a half fighting a civil war where more than 200,000 people died, so a force of maybe between 5,000 and 7,000 is what experts talk about, mostly West African peacekeepers. If there's a sprinkling of American, a couple of thousand on the ground for maybe three to six months because that's the interim period where there will be some kind of government to run the day-to-day affairs until they hold elections.

So, I would say for the most part three to six months and then they hold elections. Some of them stay on, at least the West African peacekeepers stay on the ground. The Americans can start leaving at about that time and then Liberians will have gotten accustomed to the kind of peace and security they need.

So, half a year would be enough. Again, remember, this is not Iraq. These people are not anti-American. They're very pro-American and they would welcome any force however small here on the ground.

HUNT: Jeff, let me just talk for a moment about the civil war. We know that Charles Taylor is a wretched man, a crook, a corrupt dictator. Is that what it's all about? Are there ideological stakes in this civil war? What's the civil war about in Liberia?

KOINANGE: You know what he first started, Charles Taylor himself is credited with beginning the civil war in 1989 when he was not happy with the way that this country was being run.

Sure enough, seven years later, the civil war ended. Peacekeepers came in. They held an election and because Charles Taylor threatened to go back into the bush and fight they elected him as president mostly out of fear and a bit of respect.

Now, as soon as he got into government he tried to implement changes. He wasn't given the opportunity. The rebels went back into the bush and said, you know, you said you would do A, B, C. You didn't do it. Now, we're going to come and pursue you.

So, it's again scramble for power. All these individuals all want to rule this one tiny country of about three million people and they're all jostling for power now even the peace talks in neighboring Ghana they're already jostling to see who will be the next leader.

So, again, you know, most of the people on the ground they say better the devil you know but, again, he himself has said he's going to step down for the greater good in his own words. We'll see what happens next but it's going to take a while before the people on the ground finally are satisfied with real leadership here in Liberia.

NOVAK: Jeff, as you have commented, this has been going on in Liberia a long time. A lot of lives have been lost. A lot of chaos. The last time I was there was in 1977 and things were pretty bad then and those were the good old days I'm told of what's there.

Why suddenly are we talking about American peacekeepers and the absolute essential need? Is it because things have gotten worse or it's because of the aggressiveness of the Bush foreign policy they think there's a better chance of getting them?

KOINANGE: I think it's a combination of the two. Yes, President Bush obviously, you know, he talks about terrorism on the African continent and destabilized government where possible al Qaeda units can implement and start launching attacks on Americans whether it's in Africa or outside of Africa.

Yes, Liberia is one of the most destabilized countries on the continent and, if Liberia goes so does the entire region. It will be a domino effect. So, it's important that stability in Liberia is maintained just for that fact. And, again, this country has been suffering. You should see what it's like on the ground. You came in 1977. I came a little after that time and it was an amazing country way back in the late '70s, early '80s. You should see it today. There's not a single building here in the city that is intact. There is no running water in the city of Monrovia, hardly any food, and add to that more than 100,000 displaced Liberians. It's a desperate situation and very chaotic and they need help sooner than later.

CARLSON: Jeff, you point out there's a stalemate. Taylor is not leaving until Bush sends troops. Bush is not sending troops until Taylor leaves. Is Taylor cutting a deal at this moment with the Bush administration?

KOINANGE: You know if he is we don't know about that but I talked to his people at his residence and he says - and they say the Americans aren't talking to them at all. In fact, the military assessment team that's on the ground have not been to visit President Taylor at all, so you get a sense that the Americans are not talking to him.

If he's cutting a deal, he's trying to cut it between the Nigerians and the U.N. prosecutor in Sierra Leone but, again, the prosecutor says they're going to pursue him wherever he goes. The Nigerians said they're going to protect him as long as they can. So, again, whoever cuts the best deal or whoever he agrees to go with, the bottom line is he has to leave.

HUNT: Hey, Jeff, thanks so much for being with us.

KOINANGE: (Unintelligible.)

The gang will be back for the outrages of the week.

THE CAPITAL GANG fact: Monrovia, a colony named after President James Monroe, became the Free and Independent Republic of Liberia in 1847.

(COMMERCIAL BREAK)

HUNT: And now for the outrages of the week.

Bill and Hillary Clinton have raked in enough big bucks from books and speeches that they can easily pay their own past legal bills. Still, the decision engineered by Judge Davidson Tell that, unlike Presidents Bush and Reagan, the Clintons are not entitled to reimbursement for most expenses incurred by the independent counsel investigation rankles.

This is the same right-wing judge who engineered the political appointment of Special Prosecutor Ken Starr who proceeded to waste some $70 million of taxpayers' money in a partisan witch hunt.

NOVAK: Elected office holders of the District of Columbia reacted with outrage when Senator Orrin Hatch proposed that Congress repeal the prohibition of firearms in the nation's capital. Actually, the mean streets of Washington are awash with illegal guns. Law abiding citizens don't have weapons to defend themselves but drug dealers, gangsters, and thieves have plenty of guns. The real outrage is that the gun ban is unconstitutional. The right to bear arms is guaranteed in the Bill of Rights even in the District of Columbia.

HUNT: Margaret.

CARLSON: Al, it looked as if Bush's Appeals Court choice Alabama Attorney General William Pryor would get through the Judiciary Committee that's until a former fundraiser came forward with documents at odds with his sworn testimony.

They showed that Pryor solicited companies under his jurisdiction to give to a GOP group which laundered the money through the national committee and then funneled it back to him for his reelection bid.

Republicans say, well, everybody does it. Really, an attorney general asking Phillip Morris and other companies for donations untraceable back to him? Let's hope not.

HUNT: Mark, what's outraging you in Boston?

SHIELDS: Well, Al, it's an ancient Washington tactic. When confronted with negative facts and news that you cannot refute instead of denying it, instead you simply attack the source of that story. It's called shoot the messenger.

Well, according to "The Washington Post's" Lloyd Grove that's exactly the tactic this week of the Bush White House after Jeffrey Kaufman of ABC reported from Iraq that morale of U.S. troops there had fallen dramatically and even inviting some troops to testify.

What did the White House leak to a friendly source? That Jeffrey Kaufman was Canadian and that Jeffrey Kaufman was gay. Now, I don't know, does that mean, Al, that you're supposed to believe him if he's a gay Estonian or a straight Canadian? Maybe they'll explain it to me.

HUNT: Thank you, Mark.

This is Al Hunt saying goodbye for THE CAPITAL GANG.

Coming up next, "CNN PRESENTS: AFRICAN JOURNEY." At 9:00 p.m., "LARRY KING WEEKEND" with John Walsh, and at 10:00 p.m. the latest news headlines, all that and much more right here on CNN. Thanks for joining us.

END

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Bush Administraion Turn This Economy Around?; Will U.S. Troops Be Welcomed In Liberia?>


Aired July 19, 2003 - 19:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AL HUNT, GUEST HOST: Welcome to CAPITAL GANG. I'm Al Hunt, with Robert Novak, Margaret Carlson, and in Boston, Mark Shields.
Our guest, we are privileged to have Republican Congressman Peter King of New York.

Peter thanks for ciming in.

REP. PETER KING, (R)-NEW YORK: Great to be here it really is.

HUNT: It is good to have you. The war in Iraq came under heightened Democratic criticism while the new U.S. commander described continuing conflict as guerrilla warfare.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY, (D)-MASSACHUSETTS: The American people want to know how long their sons and daughters are going to be shot at in Iraq.

GEN. JOHN ABIZAID, U.S. CENTRAL COMMAND: I think describing it as guerrilla tactics being employed against us is, you know, a proper thing to describe in strictly military terms.

(END VIDEO CLIP)

HUNT: President Bush's spokesman qualified his earlier admission of misleading intelligence.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: Did Iraq seek uranium in Africa, an issue that very well may be true. We don't know if it's true, but nobody, but nobody can say it is wrong.

(END VIDEO CLIP)

HUNT: CIA Director George Tenet, behind closed doors took the blame for the misinformation.

(BEGIN VIDEO CLIP)

SEN. BOB GRAHAM, (D)-FLORIDA, PRESIDENTIAL CANDIDATE: The problem is not George Tenet; the problem is George W. Bush. This is not an isolated incident. (END VIDEO CLIP)

HUNT: The British prime minister came to Washington to defend the decision to go to war.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: If we are wrong, we will have destroyed a threat that, at its least, is responsible for inhuman carnage and suffering.

(END VIDEO CLIP)

Mark, did Tony Blair's eloquence stifle criticism of George Bush?

MARK SHIELDS, CAPITAL GANG: No it didn't. I mean, Tony Blair's been enormously indispensable to both George Bush and Bill Clinton in the Balkans, as an advocate Al. But, you know, unless he convinced George W. Bush, a lesson that Peter King himself has practiced long and hard, and that is, that candor is not always simply the best policy, it's great politics.

After he relied upon very faulty information in the Bay of Pigs, and that failed invasion in 1961, President John Kennedy took full responsibility and said, "Success has a 1,000 fathers, failure is an orphan." He went to 81 percent approval in the polls because people admire a leader who will stand up and say, "I'm responsible," and that's something that George W. Bush has not taken responsibility for his own State of the Union speech.

HUNT: Peter, no doubt Tony Blair was just positively eloquent. He got a wonderful reception from you all up there. Do you agree with Mark though that doesn't rub off on George Bush?

REP. PETER KING (R), NEW YORK: No I don't. I could disagree with Mark, where he compares the Bay of Pigs to Iraq. Bay of Pigs was as terrible loss. Iraq is a victory, a qualified victory, but certainly it's a victory. And I believe we are going in the right direction. There's many tough weeks and months, maybe years ahead, but to compare it to the Bay of Pigs, I think, is wrong.

Also, I think that Tony Blair was very eloquent, very articulate, and I think he made many of the Democratic critics seem insignificant by comparison, where he was dwelling on the global issues, and they are trying to raise, I think, very small issues and try to -- you know, nobody needs Teddy Kennedy banging the podium to know that we have problems in Iraq, but we should be focusing on what to do, not just be ranting and raving.

HUNT: Small problems, Margaret?

MARGARET CARLSON, CAPITAL GANG: Definitely focusing on what to do. It's just remarkable how unprepared the Bush administration was to run Iraq at the end of the war. And we should have known when Rumsfeld said that, when Secretary of Defense Rumsfeld said, "Well, looting's OK. Let's not worry." And then the place dissolved into chaos, and absolutely no law, no order.

But you know, it's not that we can stipulate that Saddam Hussein being gone is good as you did. But still, the United States has to articulate cleanly and clearly, and honestly, the basis for going to war. And that's what's now in question. If we weren't in so much trouble in Iraq, and soldiers weren't dying, and the prospects for soldiers being there forever and ever, wasn't before us, I'm not sure the American people would care so much. But they do as a, as a result of that.

ROBERT NOVAK, CAPITAL GANG: This is about the first time I've ever agreed with every word Peter King said.

And first time, you're in trouble.

HUNT: Peter is in deep trouble. He really was -- you know, he's been such a great guest.

NOVAK: I tell you, it is such a stretch from my view from Mark Shields' to compare the Bay of Pigs to this mistake on yellow cake uranium ore. The Bay of Pigs was one of the great catastrophes; it was a terrible performance by John F. Kennedy. He let down the freedom fighters in Cuba. We don't want to rerun that story ...

HUNT: No we don't.

NOVAK: ... but it is, but there's no comparison. It's outrageous to even make that comparison. The other thing is that the -- Prime Minister Blair's speech, which was one of the greatest speeches I've ever heard, and I'm not a great fan of Tony Blair, was absolutely knock out this feeding frenzy that the Democrats in both Houses were trying to build up over this one line in the State of the Union, trying to use that as something to bring down the President.

HUNT: I want to go back to Mark Shields. I'm not sure I agree with brother Novak here. It seems every day when you pick up the "Washington Post" there's a new story that comes out about something they didn't tell us beforehand about this supposed one line, which was very essential to their reason for going to war. Ends up Don Rumsfeld said he didn't know about it. There was a four-star general who went over there last year and came back from Niger and said there's nothing to it. This story doesn't go away, does it?

SHIELDS: It doesn't go away, Al, and I, and my good friend Peter, I'm disappointed in. Novak I expect it. I wasn't comparing the military operations, I was comparing the two leaders and their candor, and their willingness to stand up and say, and "I'm responsible." That's where the buck stops here. Remember Harry Truman's sign on his desk? That's it.

George W. Bush, the White House Web site Al, issued a picture this week. It showed George W. Bush going over the State of the Union address word-by-word, line-by-line as they said. And somehow this thing just magically appeared. If he'd ...

HUNT: Let me, let me, let me ... SHIELDS: ... if he's run just a ...

HUNT: I want to turn, I want to turn to Iraq though. Peter, this week the Indians, the government of India said, we're not going in without a U.N. resolution. Hungary, the new Europe, was going to help us in Iraq; they're going to send 133 truck drivers. Don't we need to internationalize this some way quickly?

KING: I think it certainly helps to get more involved, so long as though we're not turning it over to the U.N. We saw what happened in the Balkans when the U.N. was running things. But I just go back to what Mark says, I don't think there has been an intelligence failure, and I'm one of those people, I believe that President Bush was wrong to acknowledge an error, even in using the British intelligence. I mean, there's nothing wrong with laying out all the intelligence you have, none of which has been disproven, and saying in addition to that, our closest ally with one of the most reliable intelligence agencies in the world, says they were attempting to purchase uranium.

(CROSSTALK)

KING: I don't know what this is all about. I really don't.

NOVAK: Can I suggest what's really going on here, is you have a ...

(CROSSTALK)

NOVAK: ... it's all politics, Al. I'm glad you can read my mind after all these years. It's all politics, the Democrats feel that they have to bring down this president, and this is the only effective way of doing it. They thought that -- I mean, I think perhaps that they made a mistake as to whether it can be done, but just as an analyst, that's what they are trying to do.

It's very interesting, just this week the number of dead Americans in the Gulf, in this war, reached the same level it was in the 1991 Gulf War. Now in the 1991 Gulf War, everybody said, gee, what a small figure. Now it's the same figure, they say boy, we have a lot of deaths. It's all politics, Al.

HUNT: Let me give you some -- Margaret, let me give you a couple figures. We have 181,000 troops over there, counting support troops in Kuwait. There's suggestions we may want more now. Donald Rumsfeld was proven wrong there, and yet we turn around, we're going to have to call up a National Guard unit now.

There was a military officer quoted in our paper this week, he said, "He's never seen a military stretched so thin as it is right now." Troops over there are going public saying we want to get out. This is really a tired military.

CARLSON: That's the longest question I've ever heard, Al.

KING: It is a long question. HUNT: It's a long occupation it seems.

CARLSON: And, you know, the administration denied that there was going -- that this was going to be needed. And in fact, Shinseki was put down for that, and nobody went to his retiring party as a, as a, as a result. Listen ...

(CROSSTALK)

CARLSON: ... I just want to get back to something. You know, a president knows more than anyone in Congress about the intelligence reports and what's there. He knows even more than Bob Novak here and the United States, and the people in it, have to be able to rely on the president. And what we know now is that it probably wasn't true. That's what they know.

KING: Everything he said was accurate.

CARLSON: No.

KING: Everything he said was accurate.

CARLSON: That Ambassador Wilson had found out that it was not true prior to his saying it.

KING: No, Ambassador Wilson said, the small amount of information the CIA had could not be verified. That's totally different from what British intelligence has.

HUNT: Peter King, you have the last word on this segment. But Peter and the gang will be back with the deepening deficit.

(COMMERCIAL BREAK)

HUNT: Welcome back. The Bush administration predicted budget deficit rising to $455 billion and $475 billion for the next two years.

(BEGIN VIDEO CLIP)

JOHN SNOW, SECRETARY OF TREASURY: As a percentage of GDP it's not as high as it's been, in fact, it's well in life with many prior periods. Over time it's going to come down.

(END VIDEO CLIP)

HUNT: At the same time, Federal Reserve Chairman Alan Greenspan made this economic forecast.

(BEGIN VIDEO CLIP)

ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Domestic financial developments apart from the heavy dose of fiscal stimulus now in play, to bolster economic activity over coming quarters.

(END VIDEO CLIP) HUNT: Bob, is Dr. Greenspan saying that deficit really doesn't matter?

NOVAK: He's really saying that. Isn't that -- isn't that tough on the Democrats that the master of the universe says it doesn't matter. Of course, Dr. Greenspan has got to say things are getting better, because he didn't make a big enough cut the last time. He made some disasterous increases in interest rates that have caused the situation that we're in.

I think -- I think the timing is a little worrisome. It's not the deficit is not the problem, the deficit is a symptom, not a cause, and thank goodness there was a tax cut. I was with some CEOs the other night and he said, if it wasn't for these tax cuts, we'd be going into another depression -- recession.

HUNT: And I bet you they weren't helped much by these tax cuts. Margaret Carlson, what do you think?

CARLSON: The deficit as a share of the GDP is comparable to what plunged Argentina into crisis. And you're suggesting that Dr. Greenspan is compromised by his own actions, so he's saying the deficit doesn't matter? The deficit does matter, when it's this big, and just like the administration possibly cooked the information on the war, it is far less serious to do it on the budget, but indeed they predicted an $80 billion deficit and then a balanced budget in '02, in order to justify tax cuts that aren't helping anybody. I mean, we've lost another two million jobs since the '01 tax cut, and you know, it's a very costly way, giving tax cuts to the rich, to try to get stimulus.

HUNT: Even though that prediction of an $80 billion deficit was made in February of 2002, six months after 9/11. They were $375 billion off. Doesn't give you a lot of confidence in this administration's economic predictions, does it?

KING: No, but I do -- no, again, I'm not even into predictions, but I do believe this one time again I also go with Bob Novak, that deficits are only important if they continue and they are a symptom of slow economic growth, and that is -- first of all, it was a recession that the Bush administration inherited from the Clinton administration. We've had 9/11, we've had Afghanistan, we've had Iraq. The only way to really stop deficits is to grow out of them. You do it by across-the-board tax cuts. Alan Greenspan admitted that the other day. It's worked under Reagan, it worked under Kennedy, and I am a true blue supply-sider along with Bob Novak, Arthur Arthren (ph) and Jack Kemp.

HUNT: And a very promising Crongressional Career, twic in one week. Mark Shields, in Boston, as I understand Bob Novak, all the good things that will happen will be due to tax cuts, and all the bad things are the fault of Alan Greenspan. Right?

SHIELDS: You got it, Al. I've got to say, another line from that memorable State of the Union speech is "we will not pass along our problems to future Congresses, to future presidents and to future generations." Well, we're just passing along $2 billion in interest payments over the next 10 years to the people coming back from fighting that war in Iraq and the next generation.

We've just said we're going to give ourselves tax cuts and we're going to get you to pay the bills. That $2 billion in interest, Al, goes to pay bond holders, one half of whom live overseas, who will finance our deficit. They don't put a book in a child's hands, they don't fulfill a prescription for an elderly person, they don't do anything worthwhile except pass money on to those people who can buy bonds. It's bad public policy.

NOVAK: Senator Bob Graham who's running for president I always thought a very intelligent guy, until he started running for president, he has come out with an increase in taxes in the upper bracket. And...

SHIELDS: Yes, he has.

NOVAK: Did you see that? And the interesting thing -- on "Meet the Press" last Sunday, he said that the problem with the Bush tax cuts is that the people who get these tax cuts buy stocks and bonds. They just buy more stocks and bonds. Isn't that terrible? It's just the thing the Democrats now have gotten to the point where they don't realize, as John F. Kennedy did, that if we buy stocks and bonds, that helps the economy.

CARLSON: Tax cuts for the rich generate very few jobs, for the deficit buck. It is not a good way -- and temporary deficits might work, but deficits as far as the eye can see, I don't think so.

HUNT: Congressman King wants to weigh in here.

KING: Yes, tax cuts worked under John Kennedy, worked under Ronald Reagan...

CARLSON: Temporarily.

KING: ... and when we cut the capitals gains tax cut in the late '90s, that's what brought about the balanced budget.

HUNT: Well, I would point out that in 1993, I won't mention any names, people said that Bill Clinton's tax increase was going to be horrendous, it was going to wreck the economy. And of course, all it did, Mark, correct me if I'm wrong, was usher in the best economy of our lifetime. Is that wrong, Mark?

SHIELDS: Al, Al, you won't name names, I will name names. Robert D. Novak said that.

NOVAK: You know, I am going to tell you something, I'm going to tell you something personal, which I usually don't on this program. I am so bored hearing that from you, Al, and from Mark, all -- you were so wrong about -- about that. If it hadn't been for a Republican Congress, you wouldn't have had that recovery, and you know that very well.

(CROSSTALK)

NOVAK: No, you're not. Because you never bore me, Margaret.

HUNT: You know, I've said I've always been very supportive of Alan Greenspan, one of the great public servants of our time, but when he says that we ought to cut taxes and then cut spending, I want him to go out to those -- those -- those people who are struggling to send their kids to college and say, I tell you what, we're going to cut your spending so rich people can get a tax cut. That's totally unacceptable to me.

NOVAK: I'll tell you what...

KING: Tax cuts brings growth all across the board. As far as the Clinton tax increase, the fact is, there was already six or seven quarters of economic growth before the Clinton plan even took over, so he was just riding along the benefit of the economic growth that was already in place.

NOVAK: The thing to worry about for the Republicans and for this president is a jobless recovery. That is a real problem, the idea of these morons talking about deficits, it's the unemployment figure...

(CROSSTALK)

HUNT: Let me tell you something, we didn't have any jobless recovery when Bill Clinton increased taxes, Bob Novak.

Next on CAPITAL GANG, should Gray Davis say adios to Sacramento?

(COMMERCIAL BREAK)

HUNT: Welcome back. In California, twice as many signatures as required have been submitted to put on the ballot to recall Democratic Governor Gray Davis. Meanwhile, the state government is deadlocked over a fiscal crisis.

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS, (D)-CALIFORNIA: Republicans in Sacramento are wiling to take California to the financial brink simply to advance their narrow partisan agenda.

(END VIDEO CLIP)

HUNT: A new field poll shows rising sentiment to recall Governor Davis, 51 percent to 43 percent. However, the governor's lawyers are mounting a legal challenge to the signatures. Margaret, can Gray Davis survive?

CARLSON: Not by challenging the signatures, because they're too many, he's not going to throw out that many signatures. Gray Davis will survive if Democrats hold together and put no one on the ballot. Otherwise, Gray Davis will be gone. And if one Democrat cracks and gets on the ballot, then there are going to be lots of Democrats on the ballot. It's just going to be a mess. And Gray Davis can discredit the process.

It's a terrible process. It's not democracy. It's having a second kick at the cat.

(CROSSTALK)

NOVAK: ... he really did a bad job...

CARLSON: He did do a bad job. That is very bad provision.

NOVAK: I will say this, that this is Russian roulette, or California roulette that Democrats are playing on not putting a candidate on. Now the theory is that this creates solidarity to go against the recall, but if they have the recall, and I think it will pass, then -- and there's no Democrat on -- then a non-Democrat will be elected. I mean, how can they possibly play that game, if they're interested in their own party? I think someone will crack, and I think it will be somebody prominent on the Democratic side.

HUNT: Mark Shields, I slightly disagree with Bob in that I think that Davis conceivably could win this thing if no Democrat gets on the ballot, but I can't imagine the Democrats having the discipline not to get on the ballot.

SHIELDS: Discipline and Democrats, Al, are rarely used in the same sentence, but I have to say this, this will be resolved over who is the face of each side in this struggle, because there is going to be too many candidates on whether the Republicans or whatever, and is it going to be the face of the schoolteacher who's going to have her classroom cut, or the nurses, or the cops on the beat that is going to be put at risk by this whole process, or is it going to be Gray Davis, who is manifestly unpopular, or will it be the right-wing people who are behind the whole move?

So I think that's really the dynamic here. It's not Gray Davis, a referendum on him, it's really the uncertainty and really the precariousness of the state of California as a consequence of this process.

HUNT: Peter, you don't really have a dog in this fight, but how does it look to you?

KING: Well, first of all, I think recall is a bad idea, but I guess if any governor should be recalled, it's Gray Davis. When I hear from talking to members from California, is that if Dianne Feinstein puts her name on, she would be a front-runner; if not, it's Arnold Schwarzenegger. Again, I'm just telling you what I hear from members from California who -- that's all they talk about as they walk back and forth to vote.

NOVAK: I mean, I was fascinated by Mark's analysis that somehow it's going to be a nurse and first responders, that Democrats try to make every issue into whatever it is, even going into Iraq or Liberia, is the nurse and first responder issue, but -- because I don't believe that's what it is -- but Mark has been out there, and he's a good reporter, the people hate -- they hate Gray Davis. It's just... CARLSON: Then why didn't Bill Simon win?

NOVAK: Because, Margaret, they didn't know he was going to raise taxes that much. If they knew he was going to raise taxes, he'd be dead, and that's what they're so bitter about, that he fooled them.

HUNT: I think they are bitter because they don't feel that there was a race last time, that Gray Davis ducked all the issues and just attacked the Republicans. I think that they would have been even more offended by some kind of draconian cuts in spending, Margaret, because that same poll shows even though Gray Davis is very unpopular, they don't want any of these Republicans elected.

CARLSON: Right. They'll only win by getting a plurality, and then California is going to be governed by, you know, Arnold the Terminator, getting 6 percent.

NOVAK: What if John Burton, who we all know, president of the state senator, detests Gray Davis that he says the hell with it. This is my last chance I'd love to be governor of this state. He's put his name.

(CROSSTALK)

KING: I think Gray Davis was also hurt by the fact he was too cute last year. He interfered with a Republican primary, trying to undermine Dick Riordan, and all that's going back to haunt him now. You can't be too cute in politics for too long before you get nailed.

HUNT: Peter, if you're a Republican, do you want to be in charge of California right now? It's such a mess. Wouldn't you rather have Gray Davis mired in...

KING: (UNINTELLIGIBLE) Republicans have Gray Davis as the governor next year when Bush is running for reelection, Republicans trying to take seats, yes.

HUNT: Mark Shields, you've been out there, jump in.

SHIELDS: OK, I'll just say this, if I'm Karl Rove and George W. Bush, the last thing in the world I want going into 2004 trying to capture California and deprive the Democrats of any chance is an energized Democratic Party and a polarized state of California, and I think that's one of the consequences of this whole -- this whole debacle.

HUNT: Everybody, we're going to put you on the spot. A year from now, who's going to be the governor of California? Margaret Carlson.

CARLSON: Oh, Al. Gray Davis.

HUNT: Peter King?

KING: Mary Bono.

(CROSSTALK)

HUNT: Bob Novak.

NOVAK: Arnold Schwarzenegger the Terminator. And he's really a human being, he's not a robot.

HUNT: Mark Shields?

SHIELDS: I stand with Margaret. Gray Davis will be governor.

HUNT: You're going to stick with Gray Davis?

SHIELDS: I am. Yes.

HUNT: I am going to -- and Peter makes me very uncomfortable -- I am going to align myself with Robert Novak. I've seen the damage is done to you already tonight.

(CROSSTALK)

HUNT: I think Arnold Schwarzenegger, because I think some Democrat is going to jump in there. I don't think Dianne Feinstein will, and if she does, she will win.

NOVAK: But I think...

SHIELDS: So who's it going to be, Al? Who?

NOVAK: He said Schwarzenegger.

SHIELDS: Oh, Schwarzenegger?

NOVAK: Yes.

(CROSSTALK)

NOVAK: I think none of you understood the -- I hope Peter did -- but the rest of you didn't understand the tax referendum...

KING: I understood. I understood.

NOVAK: And that's what you have, you have a grassroots movement there. It's emotional, it's anti-government, it's anti-tax, and they don't really care who's the governor, as long as it's not Gray Davis.

HUNT: I just want to say that I hope for the future of one of the greatest politicians in America that this King-Novak alliance comes undone quickly.

Peter King, you were one of the great guests we ever have on CAPITAL GANG. I really want to thank you for being with us.

Coming up in the second half of THE CAPITAL GANG, our "Newsmaker of the Week" is political editor Chuck Dodd. "Beyond the Beltway" looks at Liberia with CNN's Jeff Koinange, direct from Monrovia, and our "Outrages of the Week." All after the latest news headlines. (NEWSBREAK)

(COMMERCIAL BREAK)

ANNOUNCER: From Washington, THE CAPITAL GANG.

AL HUNT, CNN ANCHOR: Welcome back to the second half of CAPITAL GANG. I'm Al Hunt with Robert Novak, Margaret Carlson, and in Boston Mark Shields.

Our newsmaker of the week is Chuck Todd, Editor-in-Chief of the "Hotline." Chuck Todd, age 31, residence Arlington, Virginia, religion Jewish, majored in political science and music performance at George Washington University, joined the "Hotline" in 1992, writes two columns a week for national journal affiliates, was once named by "George" magazine as one of the 50 most influential people in American politics.

I sat down with Chuck Todd earlier this week to talk about the report of fundraising by Democratic presidential candidates.

(BEGIN VIDEOTAPE)

HUNT: Chuck, the biggest shocker was Dick Gephardt, why the bad money showing?

CHUCK TODD: Their campaign said it was because they've got some fundamental flaws in their operation. They better say that because if it's because of lack of support or lack of enthusiasm it's a serious problem.

HUNT: Could Gephardt be the first victim of McCain-Feingold, the ban on soft money, in the sense that he spent most of the past decade raising big bucks for the DCCC and hasn't adapted to this new system?

TODD: That's an interesting point. You know, one of the things that Gephardt people used to tout two years ago, oh, we've raised more money. We've been in more living rooms and, you're right, it's all soft money that he raised and the big chunks he was very good at getting million dollar checks, getting $250 matchable checks is a whole other story and it looks like he's a little rusty.

HUNT: Money trouble also for Joe Lieberman who has less cash on hand than his main rivals, cut staff salaries, and sacked his chief fundraiser this week, why?

TODD: The number itself that they raised, $5 million was a respectable amount. Because they fired their fundraiser all of a sudden we had to take another look, oh, what's wrong, you know?

HUNT: But he's not raising the kind of money that people thought Joe Lieberman could raise.

TODD: He's not. How is it that guys like Howard Dean and John Edwards, who nobody ever heard of four years ago, are out raising the former nominee for vice president who has appeared on every state ballot in this country? That is a head scratcher for a lot of people.

HUNT: John Kerry has raised the most money but the stunning surge this quarter was Howard Dean, much of it from the Internet and more small contributors than anybody else. Is it possible that in January with those matching - the feds match up to $250, that Howard Dean with so many small contributors may actually have as much, if not more, money than anyone else including John Kerry when he gets the fed match?

TODD: Absolutely. I mean it could be up to anywhere from 35 to 50 percent of his money depending on whose estimation you believe of what he actually raises.

HUNT: Has the Internet changed political fundraising on the presidential level and politically or ideologically what sort of candidates have a comparative advantage?

TODD: I think it is the ideological candidates that do have the advantage here. It's the ones that can tap into some anger. So, first for Dean it was the Iraq War but then it sort of built because he's been the guy. He's been the angry guy. He's been the guy showing some disdain for Bush being more aggressive against Bush.

HUNT: John McCain did quite well on the Internet four years ago and people didn't think of McCain as an ideological candidate.

TODD: You know he was the outrage candidate. He was the outsider candidate, the outrage anger side of the aisle.

HUNT: Absolutely. Historically, the two best leading indicators for success in the nominating process have been money and the strength in the early contest. The only two candidates who are at the top tier in both those are John Kerry and Howard Dean. Are they now the frontrunners?

TODD: You can't argue against that. Is there a frontrunner? No, but they're certainly the only two on stage right now. The other guys are trying to figure out how to get in the story. Dean and Kerry get into the tops of stories. Both are in their either second or third in Iowa. If you believe some polls being made. They even pulled ahead of Gephardt in Iowa and they're first and second in New Hampshire so those look like frontrunners to me.

HUNT: You mentioned George Bush. All the Democrats pale in the fundraising chase next to the money that the president has raised, $34 million. How important will Bush's money advantage be? Will it be determinative?

TODD: It's only determinative when it comes to what the Democrats do financially. Are they going to take the General Election money? Are they not? Collectively, the Democrats are probably going to raise $150 million just for their primary, these nine candidates.

Well, that means there's another $150 million, maybe more, for a person that's actually the Democratic nominee. You know, once a Democrat becomes a nominee it is more rock star and that means they might be able to stay at least within shouting distance of Bush's money. They're never going to be the same but they might be able to cut the advantage instead of 4-1 down to 2-1 and that's a big deal.

(END VIDEOTAPE)

HUNT: Mark, just how bad for Congressman Gephardt is the news from the financial reports?

MARK SHIELDS, CNN ANCHOR: Well, Al, it was disappointing for Dick Gephardt make no mistake about it. He does still have $6 million on hand which puts him in the top tier I guess.

But I think where it hurts him politically is ironically with the AFL-CIO endorsement which he's been seeking that those who are opposed to endorsing Dick Gephardt within the AFL-CIO will say, look, what's the point of endorsing a guy who hasn't been able to raise that much money which would be a difficult and troubling message for them to send.

HUNT: Bob, your take?

ROBERT NOVAK, CNN ANCHOR: You know it's a question does the status of the candidates reflect their money raising or does their money raising reflect their status?

HUNT: Right.

NOVAK: They work on each other and I do believe that the money raising does reflect the rise of Howard Dean and the fact that Dick Gephardt has not set any fires going. There's been a lot of cases where he goes out in Iowa and they say why did you vote for this war and he's apologizing.

So, it's a very left of center, antiwar electorate and Senator Kerry has moved well over to the left from his previous position on the war. Gephardt has kind of stayed where he is and I think that's what his problem is.

HUNT: Margaret, the other guy who had a problem was Joe Lieberman. I mean he did raise $5 million as Chuck Todd pointed out but he's not doing nearly as well as Kerry, Dean, or John Edwards in fundraising.

MARGARET CARLSON, CNN ANCHOR: Right, and John Edwards is getting - his money looks tainted because it's all from trial lawyers.

HUNT: I'll point out that Bush got more from lawyers.

CARLSON: But still in that money primary it puts him ahead, Al, that is the most depressing interview I've seen in a long time and it's not just because you were wearing an orange jacket.

HUNT: (Unintelligible.)

CARLSON: It's that money is going to - the money primary is now so huge and so important that a guy like Gephardt whose philosophy squares with the AFL-CIO may not get their endorsement because he hasn't raised enough money.

NOVAK: But, see I don't think it's because he hasn't raised enough money.

CARLSON: It's a chicken-egg hard problem.

NOVAK: Yes, exactly.

CARLSON: But still it's depressing.

HUNT: Mark, let me go back to you on Gephardt because actually he's running fairly well in the polls, certainly in Iowa and even in the national polls. He got a lot of attention with his healthcare but the money just isn't coming in. Is that Gephardt's campaign or is that the lack of support for him?

SHIELDS: Well, I think you put your finger on it, Al. I mean Dick Gephardt has been one of the champion fundraisers for the past ten years as the Democratic House leader but he's been spending extraordinary amounts of time with people and individuals who could write six-figure checks or organizations and that's entirely different than going out and raising it in $500, $250, $2,000 clumps.

But, he did get the endorsement of the Machinist Union, which is not unimportant given the ceilings on hard money. All of a sudden, organizational and institutional support and if he gets the Teamsters that would probably put him back in the ball game.

NOVAK: Let me differ from you just a little bit. I don't think he's doing that well in the polls if he's running even with Dean in Iowa. He was supposed to be doing much better in Iowa than that.

HUNT: Well, the last word goes to Robert Novak.

And, coming up next, THE CAPITAL GANG classic when Gray Davis was riding high.

(COMMERCIAL BREAK)

HUNT: Welcome back.

Five years ago, Democrat Gray Davis was about to be elected governor of California against Republican Dan Lungren. There were forecasts and appraisals by your CAPITAL GANG on October 31st, 1998.

(BEGIN VIDEOTAPE)

CARLSON: Lungren is running a campaign from several decades ago as if Davis is some liberal, soft on crime candidate and he just isn't, and Davis will beat him soundly.

UNIDENTIFIED FEMALE: After 16 years of Republican governors, I guess the time for a change theme is working. I think every generation ought to have a Democratic governor just so they appreciate how bad it truly is. HUNT: He'll win by about the same margin that Ronald Reagan won when he first became governor of California and he'll wreck what otherwise would have been a festive night for the Republicans on the State House level.

SHIELDS: He's running better than Democrats have in California among men than any other Democrat and he is paying dividends is his service in Vietnam where he won a Bronze Star as an Army captain and it's insulated attacks the Republicans have made against him as a liberal - Bob Novak.

NOVAK: Gray Davis, he's the first White man the Democrats have nominated for governor of California in 16 years. This is going to be a terrible night for the Democrats. The great bright spot is going to be Gray Davis in California.

(END VIDEOTAPE)

HUNT: Bob, we were awful effusive in our praise of Gray Davis five years ago.

NOVAK: All the world loves a winner, particularly us, and we were right for once and we saw he was going to win. It wasn't a particularly edifying campaign but he did make mistakes, didn't stand for much of anything in his reelection campaign, but he looked good at the time. He didn't know that a huge budget deficit was coming down on him.

HUNT: Margaret, remember when?

CARLSON: Al, these were - yes, I do. These were predictions more than praise and Gray Davis had a very weak opponent in Dan Lungren as I think we pointed out on that program and Gray Davis is the victim of what so many other governors are victim of which is, hey, deficit governing.

HUNT: And, Mark Shields, how does it look from across the continent?

SHIELDS: Well, Al, in 1998, you know we in the press are suckers. We always root for the underdog and Gray Davis was the underdog that year. He was facing two primary opponents, multimillion campaigns.

He was outspent six or seven to one and he beat them both with a slogan come up with by David Doak and Tom O'Donnell, which was experience that money can't buy and from that point he coasted against Dan Lungren again making him the issue in the campaign, his challenger. I think that strategy has run its course at this point in California for Gray Davis.

HUNT: That night actually was a surprisingly good night for Democrats across the country.

Next on CAPITAL GANG, beyond the beltway looks at Liberia with CNN's Jeff Koinange in Monrovia. (COMMERCIAL BREAK)

HUNT: Welcome back.

President Bush and U.N. Secretary-General Kofi Annan met in Washington to discuss a possible U.S. peacekeeping force for Liberia.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Any commitment we have would be limited in size and limited in tenure.

KOFI ANNAN, U.N. SECRETARY-GENERAL: We have more or less agreed to a general approach on the Liberian issue and I am very pleased with that.

(END VIDEO CLIP)

HUNT: President Bush has demanded that Liberian President Charles Taylor resign and leave the country.

(BEGIN VIDEO CLIP)

CHARLES TAYLOR, LIBERIAN PRESIDENT: I have decided to make the ultimate sacrifice. I have decided to be the sacrificial lamb that you, our people, will need.

(END VIDEO CLIP)

HUNT: However, President Taylor remained in Monrovia as fighting resumed.

Joining us now from Liberia's capital is CNN African Correspondent Jeff Koinange. Jeff, is everybody there waiting for the Americans to arrive?

JEFF KOINANGE, CNN AFRICAN CORRESPONDENT: You know, Al, for lack of a better word desperately so. As you know, Al, Liberia was formed way back in 1822 as a state for freed American slaves, so Liberians do feel that connection to the U.S. and Liberians on the ground tell me everyday whether the U.S. sends two, 200, or 2,000 peacekeepers they will be more than welcome to get them out of the present situation.

As you also know, President Taylor here has said he won't leave unless the Americans arrive. The Americans say they will not come until President Taylor leaves, so right now this country is somewhere between a rock and a hard place as they wait to see which side blinks first.

HUNT: Bob.

NOVAK: Jeff, the Americans are talking about sending a few peacekeepers, not a big fighting force like was sent into Iraq. Fighting has broken out again. Do you think just a few peacekeepers would be adequate that the rebels would submit to the American peacekeeping operations and you wouldn't need a full-fledged military operation?

KOINANGE: Not at all. On the ground here it's all psychological at the end of the day. If they see a few Americans with uniforms, with arms on the streets of Monrovia, believe me no one would want to engage them at all.

They would if it was a foreign African force but for Americans, Liberians know. Again, this is not Iraq. These people have a connection with America.

If they see the Americans on the ground they would feel these folks are here to help and they're not here to do any harm to them. So, yes, psychologically it would play a big role even if it's just a few peacekeepers on the ground.

HUNT: Margaret.

CARLSON: Jeff, in August of 2000, Richard Holbrooke created a war crimes court calling Charles Taylor the Milosevic of Africa, his crimes, his atrocities exceeding those of Milosevic.

Now, is there a chance, a danger that Charles Taylor could get away with a soft kind of protected exile and not be brought to trial or be made to pay for his war crimes?

KOINANGE: You know what, if it's up to the prosecutors in neighboring Freetown they will make sure that they pursue Charles Taylor wherever he goes; in fact, they're saying they're waiting for him to step down and seek his political asylum in Nigeria and they did insist in press statements all over the place they say we will pursue him wherever he goes.

So, there's a chance somewhere down the line. It may take a year. It may take five years. They will pursue him and they will take him to that court in Freetown to answer those charges.

HUNT: Mark Shields.

SHIELDS: Jeff, you heard President Bush say that any U.S. force would be limited in size and in tenure. How long, how large a force in your own judgment and how long would it have to be there to really bring stability to most of Liberia and to that whole region?

KOINANGE: Right. Let's first remember Liberia has been at war for, what, the last decade and a half fighting a civil war where more than 200,000 people died, so a force of maybe between 5,000 and 7,000 is what experts talk about, mostly West African peacekeepers. If there's a sprinkling of American, a couple of thousand on the ground for maybe three to six months because that's the interim period where there will be some kind of government to run the day-to-day affairs until they hold elections.

So, I would say for the most part three to six months and then they hold elections. Some of them stay on, at least the West African peacekeepers stay on the ground. The Americans can start leaving at about that time and then Liberians will have gotten accustomed to the kind of peace and security they need.

So, half a year would be enough. Again, remember, this is not Iraq. These people are not anti-American. They're very pro-American and they would welcome any force however small here on the ground.

HUNT: Jeff, let me just talk for a moment about the civil war. We know that Charles Taylor is a wretched man, a crook, a corrupt dictator. Is that what it's all about? Are there ideological stakes in this civil war? What's the civil war about in Liberia?

KOINANGE: You know what he first started, Charles Taylor himself is credited with beginning the civil war in 1989 when he was not happy with the way that this country was being run.

Sure enough, seven years later, the civil war ended. Peacekeepers came in. They held an election and because Charles Taylor threatened to go back into the bush and fight they elected him as president mostly out of fear and a bit of respect.

Now, as soon as he got into government he tried to implement changes. He wasn't given the opportunity. The rebels went back into the bush and said, you know, you said you would do A, B, C. You didn't do it. Now, we're going to come and pursue you.

So, it's again scramble for power. All these individuals all want to rule this one tiny country of about three million people and they're all jostling for power now even the peace talks in neighboring Ghana they're already jostling to see who will be the next leader.

So, again, you know, most of the people on the ground they say better the devil you know but, again, he himself has said he's going to step down for the greater good in his own words. We'll see what happens next but it's going to take a while before the people on the ground finally are satisfied with real leadership here in Liberia.

NOVAK: Jeff, as you have commented, this has been going on in Liberia a long time. A lot of lives have been lost. A lot of chaos. The last time I was there was in 1977 and things were pretty bad then and those were the good old days I'm told of what's there.

Why suddenly are we talking about American peacekeepers and the absolute essential need? Is it because things have gotten worse or it's because of the aggressiveness of the Bush foreign policy they think there's a better chance of getting them?

KOINANGE: I think it's a combination of the two. Yes, President Bush obviously, you know, he talks about terrorism on the African continent and destabilized government where possible al Qaeda units can implement and start launching attacks on Americans whether it's in Africa or outside of Africa.

Yes, Liberia is one of the most destabilized countries on the continent and, if Liberia goes so does the entire region. It will be a domino effect. So, it's important that stability in Liberia is maintained just for that fact. And, again, this country has been suffering. You should see what it's like on the ground. You came in 1977. I came a little after that time and it was an amazing country way back in the late '70s, early '80s. You should see it today. There's not a single building here in the city that is intact. There is no running water in the city of Monrovia, hardly any food, and add to that more than 100,000 displaced Liberians. It's a desperate situation and very chaotic and they need help sooner than later.

CARLSON: Jeff, you point out there's a stalemate. Taylor is not leaving until Bush sends troops. Bush is not sending troops until Taylor leaves. Is Taylor cutting a deal at this moment with the Bush administration?

KOINANGE: You know if he is we don't know about that but I talked to his people at his residence and he says - and they say the Americans aren't talking to them at all. In fact, the military assessment team that's on the ground have not been to visit President Taylor at all, so you get a sense that the Americans are not talking to him.

If he's cutting a deal, he's trying to cut it between the Nigerians and the U.N. prosecutor in Sierra Leone but, again, the prosecutor says they're going to pursue him wherever he goes. The Nigerians said they're going to protect him as long as they can. So, again, whoever cuts the best deal or whoever he agrees to go with, the bottom line is he has to leave.

HUNT: Hey, Jeff, thanks so much for being with us.

KOINANGE: (Unintelligible.)

The gang will be back for the outrages of the week.

THE CAPITAL GANG fact: Monrovia, a colony named after President James Monroe, became the Free and Independent Republic of Liberia in 1847.

(COMMERCIAL BREAK)

HUNT: And now for the outrages of the week.

Bill and Hillary Clinton have raked in enough big bucks from books and speeches that they can easily pay their own past legal bills. Still, the decision engineered by Judge Davidson Tell that, unlike Presidents Bush and Reagan, the Clintons are not entitled to reimbursement for most expenses incurred by the independent counsel investigation rankles.

This is the same right-wing judge who engineered the political appointment of Special Prosecutor Ken Starr who proceeded to waste some $70 million of taxpayers' money in a partisan witch hunt.

NOVAK: Elected office holders of the District of Columbia reacted with outrage when Senator Orrin Hatch proposed that Congress repeal the prohibition of firearms in the nation's capital. Actually, the mean streets of Washington are awash with illegal guns. Law abiding citizens don't have weapons to defend themselves but drug dealers, gangsters, and thieves have plenty of guns. The real outrage is that the gun ban is unconstitutional. The right to bear arms is guaranteed in the Bill of Rights even in the District of Columbia.

HUNT: Margaret.

CARLSON: Al, it looked as if Bush's Appeals Court choice Alabama Attorney General William Pryor would get through the Judiciary Committee that's until a former fundraiser came forward with documents at odds with his sworn testimony.

They showed that Pryor solicited companies under his jurisdiction to give to a GOP group which laundered the money through the national committee and then funneled it back to him for his reelection bid.

Republicans say, well, everybody does it. Really, an attorney general asking Phillip Morris and other companies for donations untraceable back to him? Let's hope not.

HUNT: Mark, what's outraging you in Boston?

SHIELDS: Well, Al, it's an ancient Washington tactic. When confronted with negative facts and news that you cannot refute instead of denying it, instead you simply attack the source of that story. It's called shoot the messenger.

Well, according to "The Washington Post's" Lloyd Grove that's exactly the tactic this week of the Bush White House after Jeffrey Kaufman of ABC reported from Iraq that morale of U.S. troops there had fallen dramatically and even inviting some troops to testify.

What did the White House leak to a friendly source? That Jeffrey Kaufman was Canadian and that Jeffrey Kaufman was gay. Now, I don't know, does that mean, Al, that you're supposed to believe him if he's a gay Estonian or a straight Canadian? Maybe they'll explain it to me.

HUNT: Thank you, Mark.

This is Al Hunt saying goodbye for THE CAPITAL GANG.

Coming up next, "CNN PRESENTS: AFRICAN JOURNEY." At 9:00 p.m., "LARRY KING WEEKEND" with John Walsh, and at 10:00 p.m. the latest news headlines, all that and much more right here on CNN. Thanks for joining us.

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