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The Lead with Jake Tapper

Presidents Call For More Money Greeted In Congress With Support, Criticism; News HBO Show Redefines Television; Did Howard Dean Blunder By Being Too Harsh On Israel?

Aired September 13, 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.


(NEWSBREAK)
ANNOUNCER: Live from Washington THE CAPITAL GANG.

MARK SHIELDS, CNN ANCHOR: Welcome to THE CAPITAL GANG. I'm Mark Shields with Al Hunt, Margaret Carlson and, in Los Angeles, Robert Novak. Our guest is Republican Senator John Sinunu of New Hampshire. Thanks for coming in again, John.

SEN. JOHN SINUNU (R), NEW HAMPSHIRE: You bet, good to be here.

SHIELDS: President Bush's call for $87 billion to finance the military and reconstruction costs for Iraq and Afghanistan was greeted in Congress by general support but specific criticism.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D), FOREIGN RELATIONS CMTE.: We have no choice. We must keep this commitment in Iraq. It's going to be hard. I will support him. I will support spending that money.

SEN. BILL FRIST (R), MAJORITY LEADER: There will be much discussion and much debate, many questions asked but, in the end, we will be united and I'm confident it will be at the $87 billion figure.

SEN. TOM DASCHLE (D), MINORITY LEADER: I would be prepared to support at least a deferment of the tax cuts for those at the very top, those making perhaps more than $250,000. At least a deferment ought to be considered if we're going to pay for all the requests made by this administration.

(END VIDEO CLIP)

SHIELDS: The CNN/USA Today Gallup poll showed opposition to spending the $87 billion by a 51 percent to 46 percent margin. Al Hunt, will President Bush get all this money from Congress despite the public disapproval?

AL HUNT, CNN ANCHOR: Yes, he will Mark. As Joe Biden said there will be no choice when they come to a vote but this administration after deceiving the public about the cost and the dangers of this massive nation building, George Bush only went the limited candid route in that speech the other night. It's going to cost a lot more than $87 billion, which is on top of the $79 billion we've already spent. For Iraq reconstruction, the White House paper assumes that we will fork over only $21 billion, 43 and a half is going to come from other nations. We'll be lucky to get half of that from other nations. Twelve and a half will come from oil revenues from Iraq they say. We'll be lucky to get half of that.

So, the president's going to have to come back and ask in a couple months for $25 billion or so more. I think the politics are going to get worse and worse. A number of John's Republican colleagues already have sticker shock and I think the defense of the tax cuts for the rich are going to get light, going to get less and less.

SHIELDS: Bob Novak in Los Angeles, sticker shock for some Republicans?

ROBERT NOVAK, CNN ANCHOR: There sure is a sticker shock. I wrote a column last week about several Republican Senators upset. This was before the president's speech about the supplemental and then because I used their names they're really unhappy about it.

But, on the other hand, the Democrats are trying to use this for all kinds of purposes. Senator Kennedy, Senator Byrd want to use it as an excuse for more domestic spending.

I don't get the rationale for that and, of course, Al chimed in with his friend Tom Daschle saying - with that canard about tax cuts for the rich that this somehow is connected to the cost of this war. I don't think, Al, besides I don't believe they knew it was going to cost this much. That's a shame on them but I don't believe there was a deception.

SHIELDS: Margaret Carlson, your own take on this, will George Bush get the money and will there be a political price to pay?

MARGARET CARLSON, CNN ANCHOR: Well, Bob was wrong about one thing. Certainly they knew it was going to cost something and we were kept in the dark for a very long time and, remember, it wasn't going to take 200,000 troops and it wasn't going to take that much money and the reason it wasn't going to take - we didn't have a figure is the tax cuts had to get through before Congress who, you know, was willing to be deluded had to face up to the fact that tax cuts for the wealthy and $87 billion and, as Al says, and much more.

SUNUNU: The tax cuts were about the economy, getting the economy going. It was a growth package. It focused on investments. It focused on cutting marginal rates so the tax cuts were a good idea.

So, the tax cuts were a good idea because we suffered through a slow economy. The real point about this package is what will be the nature of the debate? Some of it will be political. Yes, they'll bring the tax cuts back.

They'll try to increase domestic spending on the part of the liberals but I think there is an important substantive discussion here and that's on the reconstruction money, the $20 billion. Who's administering it? Where's it being put? What are we getting for the money?

I think if you talk to some of the delegations that went to Iraq, we saw spread across the country a lot of different needs, a lot of different priorities. Some places the money was being well used, leveraged very highly, put into the hands of the right people and even in some cases local Iraqi contractors to get the job done.

In other cases, down in the south, the progress on some of the power grid issues and some of the infrastructure issues have been very slow, so I think that will be the heart of the substance of this debate. How are we going to use this $20 billion for reconstruction?

SHIELDS: John Sununu, I think there are more fundamental questions even than that and we have the deputy secretary of defense the architect of this whole policy, Paul Wolfowitz, who said in March in testimony, we are dealing with a country that can really finance its own reconstruction.

He predicted oil revenues of $50-$100 billion which is totally beyond anything that country can produce, is expected to produce and most optimistic. I mean at some point there has to be accountability doesn't there?

SUNUNU: I think the oil revenues are going to be more than the $6 billion that Al described but certainly less than 50. I didn't hear anybody say $50-$100 billion per year but I think...

SHIELDS: Not per year, he said in two years I think.

SUNUNU: ...it will be in the $12-$18 billion range which is real money which will make a difference and which will be used to rebuild the country.

HUNT: That would be great if we could get there but, you know, just to take this out of partisanship for a minute I think you're on the Foreign Relations Committee and Dick Lugar who is the chairman, who if Don Rumsfeld and Paul Wolfowitz and Dick Cheney didn't know what it was going to cost, Dick Lugar as John knows well before this war was saying what this was going to cost and he's been right.

He's going to start hearings this week which I think will be an incredible contribution again and I think he's going to make this administration level with us more than they have.

SUNUNU: He will and the focus will be on those issues that I described.

HUNT: It will be.

SUNUNU: We talked about these in the committee before the fact and the need for preparation and the need for planning on the infrastructure side and we're going to come back to those very same issues.

CARLSON: And, you know, Secretary of State Powell has made a little progress with the allies but not enough to wring half of the cost of this out of them, not even close.

SHIELDS: Nobody realistically expects that. Bob Novak out in Los Angeles, Bob one of the returning groups from Iraq, and this is not partisan this is strong support of President Bush, found a shortage of 40,000 Kevlar jackets to protect the American troops over there, the American soldiers that they were without, from being attacked. This is a legitimate area of inquiry.

NOVAK: Oh, come on, Mark. You were in the service. I was in the service. You know they make mistakes. Harry Truman ragged as head of the Defense Committee in the Senate ragged FDR for the way the conducted the war. That's the nature of the beast.

The interesting thing for us, and let's all be honest, is the Democrats are going to use this every way they can as we enter the president election cycle and the Republicans are scared to death of these issues.

HUNT: OK, glad to know the Republicans won't play politics, Mark. That makes me feel a lot...

SHIELDS: That's right and, Bob, you know, as the "Los Angeles Times" pointed out, and I'm sure you read it, if President Bush's 2001 tax cuts were frozen just for the top one percent it would be a saving of $442 billion.

NOVAK: We have had you and Mark and Al now...

HUNT: He is Mark.

NOVAK: With this.

HUNT: Yes.

NOVAK: With this left wing mantra about trying to punish the rich when we have a serious question of whether we're going to -- how we're going to take care of this Iraqi situation and I'm sick of it.

SHIELDS: One of the serious questions, Bob, is who's going to pay for it? John Sununu and the gang will be back with Democrats at each other's throats in the latest presidential debate.

(BEGIN VIDEO CLIP)

ANNOUNCER: John Sununu was the first candidate in a decade to beat a sitting Senator in a primary election which incumbent Senator did he beat in 2002? Is it, a) Judd Gregg; b) Jeanne Shaheen; or c) Bob Smith? We'll have the answer right after the break.

(BEGIN VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: Earlier we asked: John Sununu was the first candidate in a decade to beat a sitting Senator in a primary election which incumbent Senator did he beat in 2002? The answer is c) Bob Smith.

(END VIDEO CLIP)

SHIELDS: Welcome back.

In this week's debate among Democratic candidates, Senator Joseph Lieberman of Connecticut took issue with former Vermont Governor Howard Dean's call for an even handed policy in the Middle East.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), PRESIDENTIAL CANDIDATE: He has said Israel ought to get out of the West Bank and an enormous number of their settlements ought to be broken down. That's up to the parties in their negotiations not for us to tell them.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I'm disappointed, Joe. My position on Israel is exactly the same as Bill Clinton's. It doesn't help, Joe, to demagogue this issue.

LIEBERMAN: I will simply say that Howard Dean's statements break a 50-year record in which presidents, Republican and Democrat, members of Congress of both parties have supported our relationship with Israel.

(END VIDEO CLIP)

SHIELDS: Meanwhile, retired General Wesley Clark indicated he will announce soon whether he will run for president. The former NATO supreme commander showed ten percent support in the new CNN/USA Today Gallup poll, compared to 16 points by the new frontrunner Congressman Richard Gephardt of Missouri.

Margaret Carlson, did Howard Dean commit a blunder by being too harsh, too hard on Israel?

CARLSON: Not for the people his campaign is aimed at. I think that's fine. I think by saying that the Hamas members are soldiers that's a mistake even with the left wing pro-Palestinian wing of the party.

You know what he said wasn't just at variance with United States policy, it was at variance with things that Howard Dean has said himself in the past and it adds to this notion of being that he just talks off the cuff, which I think is, you know, what probably lingers most about this and Dean.

And what's interesting is that Wes Clark comes out and gets ten percent immediately, which kind of shows the weakness of the field, the public preferring someone they don't know to all the ones they do know.

SHIELDS: Bob Novak in Los Angeles, was this a stumble by Howard Dean and I have to say Wes Clark. Charlie Rangel, the Ranking Democrat of the Ways and Means Committee told me yesterday he hadn't met anybody in public life who had impressed him as much or more than Wes Clark. That's how enthusiastic he is about him.

NOVAK: Well, a lot of the people in the Army weren't enthusiastic about him. That's why Bill Clinton had to save him to get him his four stars. But, as a matter of fact, we're talking about Dean and Israel. I don't think that's going to hurt him with the voters, as Margaret suggested, in New Hampshire and Iowa.

What I want to say was he has said, has been said by several Republican presidents, is Joe Lieberman who's out of line in being 1,000 percent for Israel.

My goodness, Eisenhower was almost anti-Israel and we've had candidates trying to get him to lay off those settlements - I mean presidents including both of the Bush's and Bill Clinton. So, I don't think - perhaps it's Lieberman who's out of the mainstream and not Governor Dean.

SHIELDS: John Sununu.

SUNUNU: Mark, I don't want to make a habit out of it. The last time I was on the program I said Margaret was right and she's right again, especially on this point about Dean changing his position.

He's now changed it on retirement age for Social Security. He's wavered on his position about troop positioning or withdrawal from Iraq. He's changed his position on Cuba trade.

No single one of these issues is going to make or break him with a piece of the electorate but when you're talking about independence in New Hampshire and across the country they're looking for somebody who's straight, who's clear on the issues, who takes a stand, who stays there, and I think this is undercutting him among a very important part of the Democrat primary electorate in New Hampshire.

SHIELDS: Al.

HUNT: Yes, I have just a slightly different take. I think that Howard Dean is like the proverbial can't miss AAA baseball player. To pander you, Mark, he's hitting 365. He's at (unintelligible). It's great but he's been called up to the Boston Red Sox and the pitching is a lot tougher and the standards are higher and the nuances matter a lot more.

Substantively in the Middle East thing he's basically right. We should pressure Sharon to shut down those settlements just as we should pressure the Palestinians on terrorism but the language was just off, not even handed.

We have an historic and special relationship with the Israelis. If he had just simply said we should be an honest broker that would have been fine. He's making the same kind of miscues on trade too and I think we're going to find out in the next couple of weeks whether Howard Dean can hit major league pitching. SHIELDS: There's no question he's getting the scrutiny now as the frontrunner and the others are going after him, Dick Gephardt lowest blow in the whole week compared him to Newt Gingrich, I mean just absolutely unforgivable.

And then, I guess, the one thing that Howard Dean did this week, I thought that really was a mistake, was when he said self righteously I'm the only White candidate who talks about civil rights.

HUNT: Right.

SHIELDS: Before White audiences and that's untrue. I mean those of us who have covered Joe Lieberman, covered John Edwards, covered the others, know that they raise that issue themselves and it had a little ring of self righteousness to it which I think is probably more dangerous in the long run than changing positions.

Bob Novak, final word in Los Angeles.

NOVAK: You know I think he may be getting, as well as scrutiny he may be getting screwed because I believe the establishment is pounding on him. They don't want this guy from Vermont nominated. He's an outsider and they want somebody they're familiar with.

I don't see where he's any worse than the rest of them. He's a lot more interesting and I think he was right on the Israel question, so probably a death blow to Howard Dean is Novak saying a good word for him.

SHIELDS: Especially on the Israel question.

Next on CAPITAL GANG who is rising and who is falling in the California Recall?

THE CAPITAL GANG FACT: The debate, co-sponsored by the Congressional Black Caucus Institute and Fox News Channel, was held at Morgan State University, a historically black college.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIF. GOV. CANDIDATE: We, as Republicans, have a choice. Are we going to fight Davis and Bustamante or we're going to fight among ourselves? I say let us unite for victory. Let us unite for victory.

(END VIDEO CLIP)

SHIELDS: That was Arnold Schwarzenegger's appeal this very afternoon to the Republican State Convention in Los Angeles. The new "Los Angeles Times" poll showed him gaining ground in the California governor's recall election but still trailing Democratic Lieutenant Governor Cruz Bustamante by five points. Conservative Republican State Senator Tom McClintock is on the rise, now seven points behind Schwarzenegger. (BEGIN VIDEO CLIP)

CALIF. SEN. TOM MCCLINTOCK (R), CALIF. GOV. CANDIDATE: If the momentum we've had during the first half of this race continues into the second half, I'll be in the winner's circle on election night.

(END VIDEO CLIP)

SHIELDS: The "L.A. Times" polls shows 50 percent in favor of recalling Governor Davis and 47 percent against the recall.

Bob Novak in Los Angeles, can Gray Davis actually defeat this recall on October 7th?

NOVAK: Most of the politicians I talk to, Mark, think that he can't. They're very suspicious of that "Los Angeles Times" polls. Other polls show him farther behind but ironically his - Governor Davis' best hope may be that Lieutenant Governor Bustamante has been such a lousy candidate he is really slipping.

He took $2 million from the Indian tribes and it appears unlikely that Bustamante is going to be able to win or less likely that he's going to be able to win the second part of the ballot. That may save Davis. There's a lot of moving parts there and it's hard to tell.

Let me say one other thing and that is Schwarzenegger has turned into a pretty good candidate. I went to a press conference of his yesterday. I thought he was quite good. He gave a good speech today and, of course, the party -- a lot of people in the party want McClintock to drop out, to give him an endorsement at the last minute. A lot of people don't think that could happen but that's what the inside dynamic inside the Republican Party is.

SHIELDS: John Sununu, you got a guy who's pro gay rights, pro gun control, pro choice. Who's his financial adviser?

HUNT: The great Warren Buffett.

SHIELDS: Warren Buffett and they're telling poor Tom McClintock to get out of the race in California.

SUNUNU: I don't think he's going to get out of the race anytime soon. I think you see a race with three relatively strong candidates. Bustamante is obviously slipping but they're out there. They're hitting their stride. They've got a month to go. I think the numbers are going to move a lot among the three candidates.

I think Bob's right though. I don't think you're going to see much change in the recall numbers. I don't think Davis is going to be able to pull it out himself.

SHIELDS: Margaret Carlson.

CARLSON: Tom McClintock thinks he's surging so it's going to be hard to talk him out of it right now but as you get closer maybe because Republicans are a very kind of orderly and gentlemanly party so maybe he can be talked out of it.

SUNUNU: Well, you know, you're talking to somebody here, at least according to the trivia question, I mean primaries are important. They strengthen the party. You're right in that.

Once you get close to that election if it is clear that one of these candidates don't have the ability to win on election day you might see one or the other leave the race but right now I think all bets are off. The candidates are going to go out there, raise their money, carry their message.

SHIELDS: Al Hunt, your take on...

HUNT: Well, first of all, Mark...

SHIELDS: ...the numbers do show Gray Davis.

HUNT: First of all, Mark, I want to say I think our kid reporter out in L.A. did a brilliant job of on-the-spot reporting. I loved the part about moving parts in particular.

Mark, I think there are two critical constituencies here and they're both about 15 percent of the electorate Latinos and right wing Republicans. For Latinos, the question is will they be energized and turn out for Cruz Bustamante.

And, if so, will they also vote for Gray Davis and against recall? I think that's a tough political bank shot and I agree with John, I don't think Tom McClintock is going to drop out anytime soon but I think that pressure is going to get enormous after that September 24th debate.

I know he says he's not going to but my guess is that pressure is going to get so big that days after that I would look for him to fold and hand it over to Arnold.

NOVAK: Let me...

SHIELDS: Bob Novak, just for clarification purpose, didn't Bustamante return that $2 million?

NOVAK: He gave it - he took the money. He didn't return it. He put it into the racial referendum.

SHIELDS: OK.

NOVAK: But it stinks to high heaven the whole relationship with the Indian tribes. A lot of people think they're going to do an independent expenditure for McClintock.

SHIELDS: For McClintock.

NOVAK: To get Bustamante elected. It's not very nice politics. Let me say one other thing that, Mark, you're talking about abortion and gay rights. Nobody's talking about that. What they're talking about is economics because this state is going down the pits and Schwarzenegger, his very conservative economic speech, which you would have hated, to the Republican State Committee today I thought it was an excellent conservative speech. I think John Sununu would have liked it.

SHIELDS: Bob, you are so tough on those conservative economic speeches too. I'll say this about Tom McClintock irrespective of how you feel he's a guy who believes in ideas and believes in philosophy and he's not a guy who's just into this let's go along, get along, kind of guy and I think he's less likely to be forced out by the consensus builders and the back room operators that Bob Novak's been talking to.

John Sununu, thank you for joining us.

SUNUNU: Thank you.

SHIELDS: Coming up on the second half of CAPITAL GANG, our Newsmaker of the Week is James Carville, consultant for and actor in the new HBO series "K Street."

Beyond the beltway looks at Israeli threats to get rid of Yasser Arafat with former U.S. diplomat David Necht (ph) and our outrage of the weeks. That's all after the latest news headlines.

(COMMERCIAL BREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with Al Hunt, Margaret Carlson, and in Los Angeles Robert Novak.

Our Newsmaker of the Week is James Carville who with his wife, Mary Madeline, is a consulting producer for the new HBO series "K Street" which premieres tomorrow.

James Carville Age: 58 Residence: Alexandria, Virginia Religion: Roman Catholic B.A. Law degree from the Louisiana State University Since 1982 a political consultant on campaigns which have included Bill Clinton for president in 1992. Author and co-author of five books Co-host of CNN's "CROSSFIRE" which he began doing in 2002.

Earlier this week, Al Hunt sat down with James Carville.

(BEGIN VIDEOTAPE)

HUNT: "K Street" what is it an HBO version of the "West Wing" or a political version of "The Sopranos"?

JAMES CARVILLE, CONSULTING PROD "K STREET": You know I think it's neither and I'm not sure exactly what it is either. I mean I've been in shooting all week. I promise you it will be different than any series that you've ever seen on TV. It's shot completely different.

There's no script. There's no lighting. There's no makeup. Some of it is true. Some of it is not. I play James Carville but I do something in the show that I don't do in ordinary life. I have like a firm that does lobbying and political consulting, public relations, et cetera, et cetera.

HUNT: But you're conceiving, taping, and editing all in a couple days. That's living on the edge. It's a high risk concept.

CARVILLE: The whole thing is high risk. Just to do a show here in Washington is high risk and, you know, Steven Soderbergh is probably not just by my estimation, by most people's estimation, one of the most creative people in Hollywood.

George Clooney, I've never seen a guy work so hard. He's a cameraman on this in addition to being one of the directors (unintelligible) blurring the lines between fact and fiction.

HUNT: Is there a danger that you'll add to the cynicism about politics fueling people's sense that it's all show biz?

CARVILLE: Maybe but it's about power. Look, Washington is a city by and large about power and there's things to be cynical about but there's also in this first one, there's - I get into trouble because I do something for nothing, all right.

HUNT: That's a Washington phenomenon.

CARVILLE: It might but I think people are interested. One of the things I think that this show has a chance, a chance, people now see that what happens in Washington really matters.

Somebody asked me yesterday well aren't there some people in Washington that do good? I said look there are thousands, homeless centers in Washington. There's charities everywhere, churches everywhere. It's like any other community and then there are people up here that really believe in what they're doing but I think we will be more about the power side of things which is a large part of the equation.

HUNT: Joe Abramson of the "New York Times" in the most comprehensive piece about this show so far notes that it may be difficult. The daily affairs of lobbying, she writes, and I want to quote "can be as opaque as the language in a legislative rider or as dull as the opening statements at an appropriations meeting."

CARVILLE: We'll take a big subject, I think. For example, one of the things we all was thinking about is the prescription drug bill. It's more about what happens in the firm. This is not going to be a legislative how-to and how a bill becomes law.

There's a lot of creative tension within the firm, much of it fictional. I mean it's going to have a program with creative tension. It's going to have a storyline.

HUNT: Tomorrow night's maiden episode you helped prepare Howard Dean for the debate that actually took place this past week.

CARVILLE: Right.

HUNT: Is that reality TV? Are you a Dean supporter now James?

CARVILLE: I'm not but I've helped. All the candidates have called me. We called Governor Dean and asked him to be a part of our show and he very graciously and nicely accepted that (unintelligible).

HUNT: Who was the more demanding task master, Bill Clinton or Steven Soderbergh?

CARVILLE: You know, Steven he is - he very much wants this thing to look real. He just never is not without this little camera. It looks like something - the cameras that they use looks like something you have at a kind of family reunion. You kind of got, you know, Uncle Lou out there with Aunt Bessie and, hey, you know come over here now Benjamin. Kiss your Aunt Bessie. Oh God, here we go again.

And he and Clooney and about three other guys with this little camera they just sit there and from that, of course, they probably have five hours of stuff and they edit it down to 28 minutes.

HUNT: You've now done television with both. Who is the bigger matinee idol, George Clooney or Robert Novak?

CARVILLE: It's real, real tough. I tell you these young women call and ask me about Bob Novak all the time and can you do this. I say nobody beats Clooney.

(END VIDEOTAPE)

SHIELDS: Al Hunt, what are the odds of this shotgun marriage between Hollywood's Sunset Boulevard and Washington's K Street will be saved, will last?

HUNT: Mark, I went to the "K Street" unveiling bash last night and I've never seen so many lobbyists and pundits sucking up for a cameo. This jaded town goes gaga over Hollywood but I think James is right. If I were George Clooney, I would worry about Robert Novak's footsteps.

SHIELDS: Bob Novak, what's your take? I know you don't watch a lot of television, although you're on it, Lord knows, enough. What's your take on this?

NOVAK: You know it's interesting that as James quite honestly said he doesn't know anything about lobbying. He's never been a lobbyist. Nobody connected with that program has ever been a lobbyist and the program is about lobbying.

What do they know of how the Boeing airplane company can roll over the Congress and the administration to really give it to the taxpayers? Are they going to show that? Maybe they will, maybe they won't.

I do know this that every program about Washington is always done from an extreme left wing position and I'm going to see if Mary Matalin can stop "K Street" from turning into the same outrage.

SHIELDS: Margaret Carlson.

CARLSON: Well, Michael Deaver is an actual lobbyist who's working on it.

NOVAK: Michael Deaver is a lobbyist who's, I think, the co- author of the show with James Clooney.

CARLSON: The program has actually caused its own little flap in the real world, which is that Howard Dean used a line in the debate last week that actually turned out to be a scripted line given to him by James Carville on the show and he claimed, I think, that no it was his line. So, there's back and forth about what's real and what's Memorex.

SHIELDS: Al Hunt, your prediction, America this is going to be the new "West Wing"?

HUNT: I think it will be hot. I think it's going to be different. I think it will be sometimes a little bit disjointed. People won't know when Rick Santorum or Don Nickles comes on. People are not going to know who they are but and the same with Democratic Senators but I think it's going to be - I think it's going to be a hit.

SHIELDS: OK, last word Al Hunt.

Coming up, THE CAPITAL GANG classic predicting after the 9/11 catastrophe whether the U.S. would attack Afghanistan.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Four days after the 9/11 terrorist attack, THE CAPITAL GANG speculated on whether President Bush would take military action.

(BEGIN VIDEOTAPE)

SHIELDS: Margaret Carlson, is President Bush ready to attack Afghanistan?

CARLSON: Mark, he's ready as we all are but he's probably not able at this moment other than perhaps to drop a few feel good bombs because it's not going to be easy.

UNIDENTIFIED FEMALE: Certainly it's not going to be easy but look in the past we fought terrorism and we've had a war against terrorism in case you haven't noticed for years now with lawsuits and resolutions and diplomacy. The public is 100 percent practically in favor of a massive military response. SHIELDS: You're talking about troops on the ground. You're talking about occupation.

NOVAK: This is not a conventional army like the Iraqis. This is a guerilla army. Just what do we do? The American people are desperate for action but what do we do? It is not like getting the Iraqis to move out of Kuwait.

HUNT: I think we may do something quickly sort of like a do little raid when we raided Tokyo six months after whatever it was after Pearl Harbor. We're not trying to occupy Afghanistan. It's different than what the Soviets did in 1979.

(END VIDEOTAPE)

SHIELDS: Bob Novak in Los Angeles, was everybody just a little too pessimistic about the military outlook for Afghanistan?

NOVAK: Yes, everybody but Kate because we all thought it was going to be much harder. I was probably more wrong than anybody. We had a quick military victory. We rid - we got out the Taliban government.

We rid the terrorist camps. Yes, Afghanistan is messy now. Afghanistan will always be messy for the rest of the world but it was mission accomplished really, very quickly in Afghanistan. Bush was right and THE CAPITAL GANG was wrong.

SHIELDS: Al Hunt.

HUNT: I think Bob Novak is much too hard on himself. I think he was closer to right. Afghanistan is a mess now. The president, President Karzai is limited to a 30-mile radius of Kabul. The Taliban and other terrorist groups are reconstructing themselves and 732 days after 9/11 we still can't get bin Laden.

SHIELDS: Margaret.

CARLSON: It was nice of Bob to admit that he was wronger than anybody else. That might be a once in a lifetime thing. Listen what the United States now knows is that we can go in and win a quick war with military might but we can't win - well we can win the battle but not the war. In the aftermath, the United States has not been good on the follow through, either in Iraq or Afghanistan.

SHIELDS: I think just to underline that point, I mean it's not like the Brits or the Soviets who tried to occupy and conquer Afghanistan but we are limited to effectively - their government is limited to control of Kabul and the rest of the country, I mean the warlords are still very, very much active and very much to be feared.

Next on CAPITAL GANG, beyond the Beltway looks at Israel's decision to banish Yasser Arafat with Middle East expert David Mack.

THE CAPITAL GANG FACT: Ninety-one nations lost citizens in the World Trade Center attacks in New York City. (COMMERCIAL BREAK)

SHIELDS: Welcome back.

The Israeli government decided that Palestinian Authority President Yasser Arafat had to go.

(BEGIN VIDEO CLIP)

VOICE OF RA'ANAN GISSIN, SHARON ADVISER: The cabinet is today resolved to remove this obstacle. The time, method, ways by which this will take place will be decided separately.

AHMED QOREI, PALESTINIAN PM DESIGNATE: It is a very, very, very dangerous decision. It is unwise position. This will escalate the situation.

(END VIDEO CLIP)

SHIELDS: Israel deferred immediate action after the United States government voiced its objections.

(BEGIN VIDEO CLIP)

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Our view on Mr. Arafat hasn't changed and our view is that he is part of the problem not part of the solution. At the same time, we think it would not be helpful to expel him because it would just give him another stage to play on.

(END VIDEO CLIP)

SHIELDS: Joining us now is David Mack, Vice President of the Middle East Institute and former ambassador to the United Arab Emirates. Thank you for coming in David.

DAVID MACK, FMR. U.S. AMB. TO UAE: Thank you, Mark.

SHIELDS: David, would the exiling of Yasser Arafat empower the new Palestinian prime minister?

MACK: No. In fact, it might end up making him more relevant rather than less relevant since he'll be going into some major capitals probably if he were exiled. If the Israelis liquidated him, of course, that would lead probably to a huge upsurge of violence and the only heirs of Arafat wouldn't be Ahmed Qorei, the prime minister, it would be Hamas and the Palestinian Islamic Jihad.

SHIELDS: Bob Novak out in Los Angeles.

NOVAK: Ambassador Mack, nobody ever called the Israelis dumb and they must know exactly what you know that every time they do this it builds up Arafat instead of tears him down. Why do they do it?

MACK: Well, there are a lot of questions among a lot of Israelis as to whether Ariel Sharon really has much of a strategy. He's a very tactical person. Secondly, a lot of Israelis believe that he doesn't want the president's roadmap, President Bush's roadmap, to really be successful. A lot of what the Israelis have been doing has been making President Bush irrelevant more than making Arafat irrelevant.

SHIELDS: Al Hunt.

HUNT: Mr. Ambassador, another important issue in the region is whether Iran has a nuclear capacity and I hear talk among some people that, look, if Iran keeps this up it is not beyond Sharon trying to pull a Baghdad and take out that nuclear facility. What effect would that have if he did that?

MACK: From what I've been able to understand from both U.S. and Israeli strategists, Israel is unlikely to have the capability to take out the Iranian nuclear potential. This is a much, much tougher kind of job in a military sense than what they were able to do at the Osirak reactor in Baghdad some years ago.

SHIELDS: OK, Margaret.

CARLSON: Mr. Ambassador, how can the new prime minister be strengthened, be given more power? Certainly this isn't working by trying to emasculate Arafat even further.

MACK: Right. Well, Abu Mazen, Mahmoud Abbas the previous prime minister made it very clear that the only way he could have become a really strong factor in dealing with Arafat, in dealing with the problem of terrorism would be if he got more muscular support from the United States not simply rhetorical support in the Oval Office meeting and a lot more cooperation from Israel.

He didn't get either. He was also very critical of Arafat but more because of Arafat's ambiguous attitudes and Arafat's opposition to political reform. No Palestinian that I know really believes that Arafat is the mastermind of the terrorism that's going on. That comes from other sources.

SHIELDS: Mr. Ambassador, Ambassador Mack, one Israeli analyst put it this way. He said the proposition to the Palestinians is they must choose between Yasser Arafat and a Palestinian state. Why is that not a fair proposition?

MACK: That's a good question, Mark. I don't believe that Palestinians have yet sorted it out in their minds that Arafat is, if you will, a historical relic. He played a very important role in keeping Palestinian identity alive, in bringing a nascent Palestinian state into being after the Oslo Accords.

But he really is a person who's only of historical importance insofar as he could be creative but I don't think Palestinians have yet come to the conclusion that they simply have got to move on to a new leadership.

SHIELDS: Bob Novak.

NOVAK: This may go back to that same question of tactics and strategy but it appears as a tactic by Prime Minister Sharon is to assassinate, to kill the leaders of the Hamas movement, the leaders of the extremist groups, the terrorist groups as they call them and that way that they are going to get rid of the organizations.

Is it their concept that there is a finite supply of leaders who will lead these kind of groups? I would think that supply would be rather ample and they'd kill one off and three more would spring up. What's the truth of that do you think?

MACK: Well, Bob, there's a lot of very, very good Israeli analysts including the former (unintelligible) chief Ephram Halevi (ph) who recently resigned as an advisor for Sharon who believed that the Israelis are missing a big opportunity at this point.

They're in a strong position, particularly after the end of the war in Iraq. They've got very strong support from the United States. They got to do something different. What they've been doing - if they do, in fact, want a peaceful settlement it's not working.

SHIELDS: Margaret.

HUNT: OK, OK, go ahead, I'm sorry.

CARLSON: I was just going to say some observers say that actually the demonstration in favor of Arafat was smaller than you might have thought it would have been given that, you know, there were bullhorns out and leaflets being passed out and only about 2,000 people showed up.

MACK: Well, Margaret, I don't think Arafat is personally that popular. He is a symbol of resistance to Israel and a symbol of Palestinian determination to express their nationhood but his popularity has greatly declined.

People do understand that he stood in the way of important political and economic reforms that he and or at least cronies around him are very corrupt. That's generally understood I think.

SHIELDS: We're down to one minute.

HUNT: Mr. Ambassador, you said a moment ago that Arafat and the Palestinian Authority are not masterminding the terrorism but could they do more to crack down on this Hamas-led terrorism? Are they doing enough?

MACK: Well, they could certainly do more. It would require, in effect, being willing to start a civil war with Hamas and the Palestinian Islamic Jihad and some similar groups and I believe that Abu Mazen would have been willing to do that if he were really guaranteed that by taking that ultimate risk he would have had the ultimate prize of the dismantling of Israeli settlements and the establishment of a Palestinian state but he never got those kind of assurances from Sharon.

SHIELDS: Ambassador David Mack thank you for joining us.

THE CAPITAL GANG will be back with the outrages of the week.

THE CAPITAL GANG FACT: During the 1980s, Israeli attempted many time to assassinate Arafat while he and his PLO fighters were entrenched in Beirut.

(COMMERCIAL BREAK)

SHIELDS: And now for the Outrage of the Week.

The Federal Communications Commission has ruled that shock jock Howard Stern's radio show is "a bona fide news interview" program just like PBS' "News Hour with Jim Lehrer" or "Meet the Press." That exempts Stern from any equal time requirement for political candidates and means he can invite California gubernatorial candidate Arnold Schwarzenegger for a repeat performance.

Earlier, Stern whose show has featured graphic discussions of child molestation, repeated ridicule of minorities, and Stern's report on shaving his own rear end had told Schwarzenegger to provide video of his having sex and this is news - Margaret Carlson.

CARLSON: Ooh, yuck. The only think worse than New York Stock Exchange Chief Richard Grasso grabbing a $140 million payout is New York Stock Exchange watchdog Carl McCall saying there is "no malfeasance" in doing so. How else, he asked, to get good talent? Former Chair Bill Donaldson, now SEC Chair, must have been mightily untalented earning only $1.65 million a year.

This week, Grasso claimed he was due an additional $48 million. How can Grasso and McCall curb Wall Street excess after this? Larceny dressed in a dark blue suit and power tie is still larceny. They should both be fired.

SHIELDS: Al Hunt.

HUNT: Right on, Margaret. Mark, Rick Santorum, the Pennsylvania Senator who recently likened gay behavior to bestiality is at it again. In opposing additional childcare funds for poor welfare-to- work participants, he argued, according to the "Los Angeles Times," "making people struggle a little bit is not necessarily the worst thing."

At the same time, he has championed every tax cut and every tax break for the rich. Santorum believes in the class struggle as long as it's only the poor who struggle.

SHIELDS: Robert Novak in Los Angeles.


Aired September 13, 2003 - 19:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEWSBREAK)
ANNOUNCER: Live from Washington THE CAPITAL GANG.

MARK SHIELDS, CNN ANCHOR: Welcome to THE CAPITAL GANG. I'm Mark Shields with Al Hunt, Margaret Carlson and, in Los Angeles, Robert Novak. Our guest is Republican Senator John Sinunu of New Hampshire. Thanks for coming in again, John.

SEN. JOHN SINUNU (R), NEW HAMPSHIRE: You bet, good to be here.

SHIELDS: President Bush's call for $87 billion to finance the military and reconstruction costs for Iraq and Afghanistan was greeted in Congress by general support but specific criticism.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D), FOREIGN RELATIONS CMTE.: We have no choice. We must keep this commitment in Iraq. It's going to be hard. I will support him. I will support spending that money.

SEN. BILL FRIST (R), MAJORITY LEADER: There will be much discussion and much debate, many questions asked but, in the end, we will be united and I'm confident it will be at the $87 billion figure.

SEN. TOM DASCHLE (D), MINORITY LEADER: I would be prepared to support at least a deferment of the tax cuts for those at the very top, those making perhaps more than $250,000. At least a deferment ought to be considered if we're going to pay for all the requests made by this administration.

(END VIDEO CLIP)

SHIELDS: The CNN/USA Today Gallup poll showed opposition to spending the $87 billion by a 51 percent to 46 percent margin. Al Hunt, will President Bush get all this money from Congress despite the public disapproval?

AL HUNT, CNN ANCHOR: Yes, he will Mark. As Joe Biden said there will be no choice when they come to a vote but this administration after deceiving the public about the cost and the dangers of this massive nation building, George Bush only went the limited candid route in that speech the other night. It's going to cost a lot more than $87 billion, which is on top of the $79 billion we've already spent. For Iraq reconstruction, the White House paper assumes that we will fork over only $21 billion, 43 and a half is going to come from other nations. We'll be lucky to get half of that from other nations. Twelve and a half will come from oil revenues from Iraq they say. We'll be lucky to get half of that.

So, the president's going to have to come back and ask in a couple months for $25 billion or so more. I think the politics are going to get worse and worse. A number of John's Republican colleagues already have sticker shock and I think the defense of the tax cuts for the rich are going to get light, going to get less and less.

SHIELDS: Bob Novak in Los Angeles, sticker shock for some Republicans?

ROBERT NOVAK, CNN ANCHOR: There sure is a sticker shock. I wrote a column last week about several Republican Senators upset. This was before the president's speech about the supplemental and then because I used their names they're really unhappy about it.

But, on the other hand, the Democrats are trying to use this for all kinds of purposes. Senator Kennedy, Senator Byrd want to use it as an excuse for more domestic spending.

I don't get the rationale for that and, of course, Al chimed in with his friend Tom Daschle saying - with that canard about tax cuts for the rich that this somehow is connected to the cost of this war. I don't think, Al, besides I don't believe they knew it was going to cost this much. That's a shame on them but I don't believe there was a deception.

SHIELDS: Margaret Carlson, your own take on this, will George Bush get the money and will there be a political price to pay?

MARGARET CARLSON, CNN ANCHOR: Well, Bob was wrong about one thing. Certainly they knew it was going to cost something and we were kept in the dark for a very long time and, remember, it wasn't going to take 200,000 troops and it wasn't going to take that much money and the reason it wasn't going to take - we didn't have a figure is the tax cuts had to get through before Congress who, you know, was willing to be deluded had to face up to the fact that tax cuts for the wealthy and $87 billion and, as Al says, and much more.

SUNUNU: The tax cuts were about the economy, getting the economy going. It was a growth package. It focused on investments. It focused on cutting marginal rates so the tax cuts were a good idea.

So, the tax cuts were a good idea because we suffered through a slow economy. The real point about this package is what will be the nature of the debate? Some of it will be political. Yes, they'll bring the tax cuts back.

They'll try to increase domestic spending on the part of the liberals but I think there is an important substantive discussion here and that's on the reconstruction money, the $20 billion. Who's administering it? Where's it being put? What are we getting for the money?

I think if you talk to some of the delegations that went to Iraq, we saw spread across the country a lot of different needs, a lot of different priorities. Some places the money was being well used, leveraged very highly, put into the hands of the right people and even in some cases local Iraqi contractors to get the job done.

In other cases, down in the south, the progress on some of the power grid issues and some of the infrastructure issues have been very slow, so I think that will be the heart of the substance of this debate. How are we going to use this $20 billion for reconstruction?

SHIELDS: John Sununu, I think there are more fundamental questions even than that and we have the deputy secretary of defense the architect of this whole policy, Paul Wolfowitz, who said in March in testimony, we are dealing with a country that can really finance its own reconstruction.

He predicted oil revenues of $50-$100 billion which is totally beyond anything that country can produce, is expected to produce and most optimistic. I mean at some point there has to be accountability doesn't there?

SUNUNU: I think the oil revenues are going to be more than the $6 billion that Al described but certainly less than 50. I didn't hear anybody say $50-$100 billion per year but I think...

SHIELDS: Not per year, he said in two years I think.

SUNUNU: ...it will be in the $12-$18 billion range which is real money which will make a difference and which will be used to rebuild the country.

HUNT: That would be great if we could get there but, you know, just to take this out of partisanship for a minute I think you're on the Foreign Relations Committee and Dick Lugar who is the chairman, who if Don Rumsfeld and Paul Wolfowitz and Dick Cheney didn't know what it was going to cost, Dick Lugar as John knows well before this war was saying what this was going to cost and he's been right.

He's going to start hearings this week which I think will be an incredible contribution again and I think he's going to make this administration level with us more than they have.

SUNUNU: He will and the focus will be on those issues that I described.

HUNT: It will be.

SUNUNU: We talked about these in the committee before the fact and the need for preparation and the need for planning on the infrastructure side and we're going to come back to those very same issues.

CARLSON: And, you know, Secretary of State Powell has made a little progress with the allies but not enough to wring half of the cost of this out of them, not even close.

SHIELDS: Nobody realistically expects that. Bob Novak out in Los Angeles, Bob one of the returning groups from Iraq, and this is not partisan this is strong support of President Bush, found a shortage of 40,000 Kevlar jackets to protect the American troops over there, the American soldiers that they were without, from being attacked. This is a legitimate area of inquiry.

NOVAK: Oh, come on, Mark. You were in the service. I was in the service. You know they make mistakes. Harry Truman ragged as head of the Defense Committee in the Senate ragged FDR for the way the conducted the war. That's the nature of the beast.

The interesting thing for us, and let's all be honest, is the Democrats are going to use this every way they can as we enter the president election cycle and the Republicans are scared to death of these issues.

HUNT: OK, glad to know the Republicans won't play politics, Mark. That makes me feel a lot...

SHIELDS: That's right and, Bob, you know, as the "Los Angeles Times" pointed out, and I'm sure you read it, if President Bush's 2001 tax cuts were frozen just for the top one percent it would be a saving of $442 billion.

NOVAK: We have had you and Mark and Al now...

HUNT: He is Mark.

NOVAK: With this.

HUNT: Yes.

NOVAK: With this left wing mantra about trying to punish the rich when we have a serious question of whether we're going to -- how we're going to take care of this Iraqi situation and I'm sick of it.

SHIELDS: One of the serious questions, Bob, is who's going to pay for it? John Sununu and the gang will be back with Democrats at each other's throats in the latest presidential debate.

(BEGIN VIDEO CLIP)

ANNOUNCER: John Sununu was the first candidate in a decade to beat a sitting Senator in a primary election which incumbent Senator did he beat in 2002? Is it, a) Judd Gregg; b) Jeanne Shaheen; or c) Bob Smith? We'll have the answer right after the break.

(BEGIN VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: Earlier we asked: John Sununu was the first candidate in a decade to beat a sitting Senator in a primary election which incumbent Senator did he beat in 2002? The answer is c) Bob Smith.

(END VIDEO CLIP)

SHIELDS: Welcome back.

In this week's debate among Democratic candidates, Senator Joseph Lieberman of Connecticut took issue with former Vermont Governor Howard Dean's call for an even handed policy in the Middle East.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), PRESIDENTIAL CANDIDATE: He has said Israel ought to get out of the West Bank and an enormous number of their settlements ought to be broken down. That's up to the parties in their negotiations not for us to tell them.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I'm disappointed, Joe. My position on Israel is exactly the same as Bill Clinton's. It doesn't help, Joe, to demagogue this issue.

LIEBERMAN: I will simply say that Howard Dean's statements break a 50-year record in which presidents, Republican and Democrat, members of Congress of both parties have supported our relationship with Israel.

(END VIDEO CLIP)

SHIELDS: Meanwhile, retired General Wesley Clark indicated he will announce soon whether he will run for president. The former NATO supreme commander showed ten percent support in the new CNN/USA Today Gallup poll, compared to 16 points by the new frontrunner Congressman Richard Gephardt of Missouri.

Margaret Carlson, did Howard Dean commit a blunder by being too harsh, too hard on Israel?

CARLSON: Not for the people his campaign is aimed at. I think that's fine. I think by saying that the Hamas members are soldiers that's a mistake even with the left wing pro-Palestinian wing of the party.

You know what he said wasn't just at variance with United States policy, it was at variance with things that Howard Dean has said himself in the past and it adds to this notion of being that he just talks off the cuff, which I think is, you know, what probably lingers most about this and Dean.

And what's interesting is that Wes Clark comes out and gets ten percent immediately, which kind of shows the weakness of the field, the public preferring someone they don't know to all the ones they do know.

SHIELDS: Bob Novak in Los Angeles, was this a stumble by Howard Dean and I have to say Wes Clark. Charlie Rangel, the Ranking Democrat of the Ways and Means Committee told me yesterday he hadn't met anybody in public life who had impressed him as much or more than Wes Clark. That's how enthusiastic he is about him.

NOVAK: Well, a lot of the people in the Army weren't enthusiastic about him. That's why Bill Clinton had to save him to get him his four stars. But, as a matter of fact, we're talking about Dean and Israel. I don't think that's going to hurt him with the voters, as Margaret suggested, in New Hampshire and Iowa.

What I want to say was he has said, has been said by several Republican presidents, is Joe Lieberman who's out of line in being 1,000 percent for Israel.

My goodness, Eisenhower was almost anti-Israel and we've had candidates trying to get him to lay off those settlements - I mean presidents including both of the Bush's and Bill Clinton. So, I don't think - perhaps it's Lieberman who's out of the mainstream and not Governor Dean.

SHIELDS: John Sununu.

SUNUNU: Mark, I don't want to make a habit out of it. The last time I was on the program I said Margaret was right and she's right again, especially on this point about Dean changing his position.

He's now changed it on retirement age for Social Security. He's wavered on his position about troop positioning or withdrawal from Iraq. He's changed his position on Cuba trade.

No single one of these issues is going to make or break him with a piece of the electorate but when you're talking about independence in New Hampshire and across the country they're looking for somebody who's straight, who's clear on the issues, who takes a stand, who stays there, and I think this is undercutting him among a very important part of the Democrat primary electorate in New Hampshire.

SHIELDS: Al.

HUNT: Yes, I have just a slightly different take. I think that Howard Dean is like the proverbial can't miss AAA baseball player. To pander you, Mark, he's hitting 365. He's at (unintelligible). It's great but he's been called up to the Boston Red Sox and the pitching is a lot tougher and the standards are higher and the nuances matter a lot more.

Substantively in the Middle East thing he's basically right. We should pressure Sharon to shut down those settlements just as we should pressure the Palestinians on terrorism but the language was just off, not even handed.

We have an historic and special relationship with the Israelis. If he had just simply said we should be an honest broker that would have been fine. He's making the same kind of miscues on trade too and I think we're going to find out in the next couple of weeks whether Howard Dean can hit major league pitching. SHIELDS: There's no question he's getting the scrutiny now as the frontrunner and the others are going after him, Dick Gephardt lowest blow in the whole week compared him to Newt Gingrich, I mean just absolutely unforgivable.

And then, I guess, the one thing that Howard Dean did this week, I thought that really was a mistake, was when he said self righteously I'm the only White candidate who talks about civil rights.

HUNT: Right.

SHIELDS: Before White audiences and that's untrue. I mean those of us who have covered Joe Lieberman, covered John Edwards, covered the others, know that they raise that issue themselves and it had a little ring of self righteousness to it which I think is probably more dangerous in the long run than changing positions.

Bob Novak, final word in Los Angeles.

NOVAK: You know I think he may be getting, as well as scrutiny he may be getting screwed because I believe the establishment is pounding on him. They don't want this guy from Vermont nominated. He's an outsider and they want somebody they're familiar with.

I don't see where he's any worse than the rest of them. He's a lot more interesting and I think he was right on the Israel question, so probably a death blow to Howard Dean is Novak saying a good word for him.

SHIELDS: Especially on the Israel question.

Next on CAPITAL GANG who is rising and who is falling in the California Recall?

THE CAPITAL GANG FACT: The debate, co-sponsored by the Congressional Black Caucus Institute and Fox News Channel, was held at Morgan State University, a historically black college.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIF. GOV. CANDIDATE: We, as Republicans, have a choice. Are we going to fight Davis and Bustamante or we're going to fight among ourselves? I say let us unite for victory. Let us unite for victory.

(END VIDEO CLIP)

SHIELDS: That was Arnold Schwarzenegger's appeal this very afternoon to the Republican State Convention in Los Angeles. The new "Los Angeles Times" poll showed him gaining ground in the California governor's recall election but still trailing Democratic Lieutenant Governor Cruz Bustamante by five points. Conservative Republican State Senator Tom McClintock is on the rise, now seven points behind Schwarzenegger. (BEGIN VIDEO CLIP)

CALIF. SEN. TOM MCCLINTOCK (R), CALIF. GOV. CANDIDATE: If the momentum we've had during the first half of this race continues into the second half, I'll be in the winner's circle on election night.

(END VIDEO CLIP)

SHIELDS: The "L.A. Times" polls shows 50 percent in favor of recalling Governor Davis and 47 percent against the recall.

Bob Novak in Los Angeles, can Gray Davis actually defeat this recall on October 7th?

NOVAK: Most of the politicians I talk to, Mark, think that he can't. They're very suspicious of that "Los Angeles Times" polls. Other polls show him farther behind but ironically his - Governor Davis' best hope may be that Lieutenant Governor Bustamante has been such a lousy candidate he is really slipping.

He took $2 million from the Indian tribes and it appears unlikely that Bustamante is going to be able to win or less likely that he's going to be able to win the second part of the ballot. That may save Davis. There's a lot of moving parts there and it's hard to tell.

Let me say one other thing and that is Schwarzenegger has turned into a pretty good candidate. I went to a press conference of his yesterday. I thought he was quite good. He gave a good speech today and, of course, the party -- a lot of people in the party want McClintock to drop out, to give him an endorsement at the last minute. A lot of people don't think that could happen but that's what the inside dynamic inside the Republican Party is.

SHIELDS: John Sununu, you got a guy who's pro gay rights, pro gun control, pro choice. Who's his financial adviser?

HUNT: The great Warren Buffett.

SHIELDS: Warren Buffett and they're telling poor Tom McClintock to get out of the race in California.

SUNUNU: I don't think he's going to get out of the race anytime soon. I think you see a race with three relatively strong candidates. Bustamante is obviously slipping but they're out there. They're hitting their stride. They've got a month to go. I think the numbers are going to move a lot among the three candidates.

I think Bob's right though. I don't think you're going to see much change in the recall numbers. I don't think Davis is going to be able to pull it out himself.

SHIELDS: Margaret Carlson.

CARLSON: Tom McClintock thinks he's surging so it's going to be hard to talk him out of it right now but as you get closer maybe because Republicans are a very kind of orderly and gentlemanly party so maybe he can be talked out of it.

SUNUNU: Well, you know, you're talking to somebody here, at least according to the trivia question, I mean primaries are important. They strengthen the party. You're right in that.

Once you get close to that election if it is clear that one of these candidates don't have the ability to win on election day you might see one or the other leave the race but right now I think all bets are off. The candidates are going to go out there, raise their money, carry their message.

SHIELDS: Al Hunt, your take on...

HUNT: Well, first of all, Mark...

SHIELDS: ...the numbers do show Gray Davis.

HUNT: First of all, Mark, I want to say I think our kid reporter out in L.A. did a brilliant job of on-the-spot reporting. I loved the part about moving parts in particular.

Mark, I think there are two critical constituencies here and they're both about 15 percent of the electorate Latinos and right wing Republicans. For Latinos, the question is will they be energized and turn out for Cruz Bustamante.

And, if so, will they also vote for Gray Davis and against recall? I think that's a tough political bank shot and I agree with John, I don't think Tom McClintock is going to drop out anytime soon but I think that pressure is going to get enormous after that September 24th debate.

I know he says he's not going to but my guess is that pressure is going to get so big that days after that I would look for him to fold and hand it over to Arnold.

NOVAK: Let me...

SHIELDS: Bob Novak, just for clarification purpose, didn't Bustamante return that $2 million?

NOVAK: He gave it - he took the money. He didn't return it. He put it into the racial referendum.

SHIELDS: OK.

NOVAK: But it stinks to high heaven the whole relationship with the Indian tribes. A lot of people think they're going to do an independent expenditure for McClintock.

SHIELDS: For McClintock.

NOVAK: To get Bustamante elected. It's not very nice politics. Let me say one other thing that, Mark, you're talking about abortion and gay rights. Nobody's talking about that. What they're talking about is economics because this state is going down the pits and Schwarzenegger, his very conservative economic speech, which you would have hated, to the Republican State Committee today I thought it was an excellent conservative speech. I think John Sununu would have liked it.

SHIELDS: Bob, you are so tough on those conservative economic speeches too. I'll say this about Tom McClintock irrespective of how you feel he's a guy who believes in ideas and believes in philosophy and he's not a guy who's just into this let's go along, get along, kind of guy and I think he's less likely to be forced out by the consensus builders and the back room operators that Bob Novak's been talking to.

John Sununu, thank you for joining us.

SUNUNU: Thank you.

SHIELDS: Coming up on the second half of CAPITAL GANG, our Newsmaker of the Week is James Carville, consultant for and actor in the new HBO series "K Street."

Beyond the beltway looks at Israeli threats to get rid of Yasser Arafat with former U.S. diplomat David Necht (ph) and our outrage of the weeks. That's all after the latest news headlines.

(COMMERCIAL BREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with Al Hunt, Margaret Carlson, and in Los Angeles Robert Novak.

Our Newsmaker of the Week is James Carville who with his wife, Mary Madeline, is a consulting producer for the new HBO series "K Street" which premieres tomorrow.

James Carville Age: 58 Residence: Alexandria, Virginia Religion: Roman Catholic B.A. Law degree from the Louisiana State University Since 1982 a political consultant on campaigns which have included Bill Clinton for president in 1992. Author and co-author of five books Co-host of CNN's "CROSSFIRE" which he began doing in 2002.

Earlier this week, Al Hunt sat down with James Carville.

(BEGIN VIDEOTAPE)

HUNT: "K Street" what is it an HBO version of the "West Wing" or a political version of "The Sopranos"?

JAMES CARVILLE, CONSULTING PROD "K STREET": You know I think it's neither and I'm not sure exactly what it is either. I mean I've been in shooting all week. I promise you it will be different than any series that you've ever seen on TV. It's shot completely different.

There's no script. There's no lighting. There's no makeup. Some of it is true. Some of it is not. I play James Carville but I do something in the show that I don't do in ordinary life. I have like a firm that does lobbying and political consulting, public relations, et cetera, et cetera.

HUNT: But you're conceiving, taping, and editing all in a couple days. That's living on the edge. It's a high risk concept.

CARVILLE: The whole thing is high risk. Just to do a show here in Washington is high risk and, you know, Steven Soderbergh is probably not just by my estimation, by most people's estimation, one of the most creative people in Hollywood.

George Clooney, I've never seen a guy work so hard. He's a cameraman on this in addition to being one of the directors (unintelligible) blurring the lines between fact and fiction.

HUNT: Is there a danger that you'll add to the cynicism about politics fueling people's sense that it's all show biz?

CARVILLE: Maybe but it's about power. Look, Washington is a city by and large about power and there's things to be cynical about but there's also in this first one, there's - I get into trouble because I do something for nothing, all right.

HUNT: That's a Washington phenomenon.

CARVILLE: It might but I think people are interested. One of the things I think that this show has a chance, a chance, people now see that what happens in Washington really matters.

Somebody asked me yesterday well aren't there some people in Washington that do good? I said look there are thousands, homeless centers in Washington. There's charities everywhere, churches everywhere. It's like any other community and then there are people up here that really believe in what they're doing but I think we will be more about the power side of things which is a large part of the equation.

HUNT: Joe Abramson of the "New York Times" in the most comprehensive piece about this show so far notes that it may be difficult. The daily affairs of lobbying, she writes, and I want to quote "can be as opaque as the language in a legislative rider or as dull as the opening statements at an appropriations meeting."

CARVILLE: We'll take a big subject, I think. For example, one of the things we all was thinking about is the prescription drug bill. It's more about what happens in the firm. This is not going to be a legislative how-to and how a bill becomes law.

There's a lot of creative tension within the firm, much of it fictional. I mean it's going to have a program with creative tension. It's going to have a storyline.

HUNT: Tomorrow night's maiden episode you helped prepare Howard Dean for the debate that actually took place this past week.

CARVILLE: Right.

HUNT: Is that reality TV? Are you a Dean supporter now James?

CARVILLE: I'm not but I've helped. All the candidates have called me. We called Governor Dean and asked him to be a part of our show and he very graciously and nicely accepted that (unintelligible).

HUNT: Who was the more demanding task master, Bill Clinton or Steven Soderbergh?

CARVILLE: You know, Steven he is - he very much wants this thing to look real. He just never is not without this little camera. It looks like something - the cameras that they use looks like something you have at a kind of family reunion. You kind of got, you know, Uncle Lou out there with Aunt Bessie and, hey, you know come over here now Benjamin. Kiss your Aunt Bessie. Oh God, here we go again.

And he and Clooney and about three other guys with this little camera they just sit there and from that, of course, they probably have five hours of stuff and they edit it down to 28 minutes.

HUNT: You've now done television with both. Who is the bigger matinee idol, George Clooney or Robert Novak?

CARVILLE: It's real, real tough. I tell you these young women call and ask me about Bob Novak all the time and can you do this. I say nobody beats Clooney.

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SHIELDS: Al Hunt, what are the odds of this shotgun marriage between Hollywood's Sunset Boulevard and Washington's K Street will be saved, will last?

HUNT: Mark, I went to the "K Street" unveiling bash last night and I've never seen so many lobbyists and pundits sucking up for a cameo. This jaded town goes gaga over Hollywood but I think James is right. If I were George Clooney, I would worry about Robert Novak's footsteps.

SHIELDS: Bob Novak, what's your take? I know you don't watch a lot of television, although you're on it, Lord knows, enough. What's your take on this?

NOVAK: You know it's interesting that as James quite honestly said he doesn't know anything about lobbying. He's never been a lobbyist. Nobody connected with that program has ever been a lobbyist and the program is about lobbying.

What do they know of how the Boeing airplane company can roll over the Congress and the administration to really give it to the taxpayers? Are they going to show that? Maybe they will, maybe they won't.

I do know this that every program about Washington is always done from an extreme left wing position and I'm going to see if Mary Matalin can stop "K Street" from turning into the same outrage.

SHIELDS: Margaret Carlson.

CARLSON: Well, Michael Deaver is an actual lobbyist who's working on it.

NOVAK: Michael Deaver is a lobbyist who's, I think, the co- author of the show with James Clooney.

CARLSON: The program has actually caused its own little flap in the real world, which is that Howard Dean used a line in the debate last week that actually turned out to be a scripted line given to him by James Carville on the show and he claimed, I think, that no it was his line. So, there's back and forth about what's real and what's Memorex.

SHIELDS: Al Hunt, your prediction, America this is going to be the new "West Wing"?

HUNT: I think it will be hot. I think it's going to be different. I think it will be sometimes a little bit disjointed. People won't know when Rick Santorum or Don Nickles comes on. People are not going to know who they are but and the same with Democratic Senators but I think it's going to be - I think it's going to be a hit.

SHIELDS: OK, last word Al Hunt.

Coming up, THE CAPITAL GANG classic predicting after the 9/11 catastrophe whether the U.S. would attack Afghanistan.

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SHIELDS: Welcome back.

Four days after the 9/11 terrorist attack, THE CAPITAL GANG speculated on whether President Bush would take military action.

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SHIELDS: Margaret Carlson, is President Bush ready to attack Afghanistan?

CARLSON: Mark, he's ready as we all are but he's probably not able at this moment other than perhaps to drop a few feel good bombs because it's not going to be easy.

UNIDENTIFIED FEMALE: Certainly it's not going to be easy but look in the past we fought terrorism and we've had a war against terrorism in case you haven't noticed for years now with lawsuits and resolutions and diplomacy. The public is 100 percent practically in favor of a massive military response. SHIELDS: You're talking about troops on the ground. You're talking about occupation.

NOVAK: This is not a conventional army like the Iraqis. This is a guerilla army. Just what do we do? The American people are desperate for action but what do we do? It is not like getting the Iraqis to move out of Kuwait.

HUNT: I think we may do something quickly sort of like a do little raid when we raided Tokyo six months after whatever it was after Pearl Harbor. We're not trying to occupy Afghanistan. It's different than what the Soviets did in 1979.

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SHIELDS: Bob Novak in Los Angeles, was everybody just a little too pessimistic about the military outlook for Afghanistan?

NOVAK: Yes, everybody but Kate because we all thought it was going to be much harder. I was probably more wrong than anybody. We had a quick military victory. We rid - we got out the Taliban government.

We rid the terrorist camps. Yes, Afghanistan is messy now. Afghanistan will always be messy for the rest of the world but it was mission accomplished really, very quickly in Afghanistan. Bush was right and THE CAPITAL GANG was wrong.

SHIELDS: Al Hunt.

HUNT: I think Bob Novak is much too hard on himself. I think he was closer to right. Afghanistan is a mess now. The president, President Karzai is limited to a 30-mile radius of Kabul. The Taliban and other terrorist groups are reconstructing themselves and 732 days after 9/11 we still can't get bin Laden.

SHIELDS: Margaret.

CARLSON: It was nice of Bob to admit that he was wronger than anybody else. That might be a once in a lifetime thing. Listen what the United States now knows is that we can go in and win a quick war with military might but we can't win - well we can win the battle but not the war. In the aftermath, the United States has not been good on the follow through, either in Iraq or Afghanistan.

SHIELDS: I think just to underline that point, I mean it's not like the Brits or the Soviets who tried to occupy and conquer Afghanistan but we are limited to effectively - their government is limited to control of Kabul and the rest of the country, I mean the warlords are still very, very much active and very much to be feared.

Next on CAPITAL GANG, beyond the Beltway looks at Israel's decision to banish Yasser Arafat with Middle East expert David Mack.

THE CAPITAL GANG FACT: Ninety-one nations lost citizens in the World Trade Center attacks in New York City. (COMMERCIAL BREAK)

SHIELDS: Welcome back.

The Israeli government decided that Palestinian Authority President Yasser Arafat had to go.

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VOICE OF RA'ANAN GISSIN, SHARON ADVISER: The cabinet is today resolved to remove this obstacle. The time, method, ways by which this will take place will be decided separately.

AHMED QOREI, PALESTINIAN PM DESIGNATE: It is a very, very, very dangerous decision. It is unwise position. This will escalate the situation.

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SHIELDS: Israel deferred immediate action after the United States government voiced its objections.

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RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Our view on Mr. Arafat hasn't changed and our view is that he is part of the problem not part of the solution. At the same time, we think it would not be helpful to expel him because it would just give him another stage to play on.

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SHIELDS: Joining us now is David Mack, Vice President of the Middle East Institute and former ambassador to the United Arab Emirates. Thank you for coming in David.

DAVID MACK, FMR. U.S. AMB. TO UAE: Thank you, Mark.

SHIELDS: David, would the exiling of Yasser Arafat empower the new Palestinian prime minister?

MACK: No. In fact, it might end up making him more relevant rather than less relevant since he'll be going into some major capitals probably if he were exiled. If the Israelis liquidated him, of course, that would lead probably to a huge upsurge of violence and the only heirs of Arafat wouldn't be Ahmed Qorei, the prime minister, it would be Hamas and the Palestinian Islamic Jihad.

SHIELDS: Bob Novak out in Los Angeles.

NOVAK: Ambassador Mack, nobody ever called the Israelis dumb and they must know exactly what you know that every time they do this it builds up Arafat instead of tears him down. Why do they do it?

MACK: Well, there are a lot of questions among a lot of Israelis as to whether Ariel Sharon really has much of a strategy. He's a very tactical person. Secondly, a lot of Israelis believe that he doesn't want the president's roadmap, President Bush's roadmap, to really be successful. A lot of what the Israelis have been doing has been making President Bush irrelevant more than making Arafat irrelevant.

SHIELDS: Al Hunt.

HUNT: Mr. Ambassador, another important issue in the region is whether Iran has a nuclear capacity and I hear talk among some people that, look, if Iran keeps this up it is not beyond Sharon trying to pull a Baghdad and take out that nuclear facility. What effect would that have if he did that?

MACK: From what I've been able to understand from both U.S. and Israeli strategists, Israel is unlikely to have the capability to take out the Iranian nuclear potential. This is a much, much tougher kind of job in a military sense than what they were able to do at the Osirak reactor in Baghdad some years ago.

SHIELDS: OK, Margaret.

CARLSON: Mr. Ambassador, how can the new prime minister be strengthened, be given more power? Certainly this isn't working by trying to emasculate Arafat even further.

MACK: Right. Well, Abu Mazen, Mahmoud Abbas the previous prime minister made it very clear that the only way he could have become a really strong factor in dealing with Arafat, in dealing with the problem of terrorism would be if he got more muscular support from the United States not simply rhetorical support in the Oval Office meeting and a lot more cooperation from Israel.

He didn't get either. He was also very critical of Arafat but more because of Arafat's ambiguous attitudes and Arafat's opposition to political reform. No Palestinian that I know really believes that Arafat is the mastermind of the terrorism that's going on. That comes from other sources.

SHIELDS: Mr. Ambassador, Ambassador Mack, one Israeli analyst put it this way. He said the proposition to the Palestinians is they must choose between Yasser Arafat and a Palestinian state. Why is that not a fair proposition?

MACK: That's a good question, Mark. I don't believe that Palestinians have yet sorted it out in their minds that Arafat is, if you will, a historical relic. He played a very important role in keeping Palestinian identity alive, in bringing a nascent Palestinian state into being after the Oslo Accords.

But he really is a person who's only of historical importance insofar as he could be creative but I don't think Palestinians have yet come to the conclusion that they simply have got to move on to a new leadership.

SHIELDS: Bob Novak.

NOVAK: This may go back to that same question of tactics and strategy but it appears as a tactic by Prime Minister Sharon is to assassinate, to kill the leaders of the Hamas movement, the leaders of the extremist groups, the terrorist groups as they call them and that way that they are going to get rid of the organizations.

Is it their concept that there is a finite supply of leaders who will lead these kind of groups? I would think that supply would be rather ample and they'd kill one off and three more would spring up. What's the truth of that do you think?

MACK: Well, Bob, there's a lot of very, very good Israeli analysts including the former (unintelligible) chief Ephram Halevi (ph) who recently resigned as an advisor for Sharon who believed that the Israelis are missing a big opportunity at this point.

They're in a strong position, particularly after the end of the war in Iraq. They've got very strong support from the United States. They got to do something different. What they've been doing - if they do, in fact, want a peaceful settlement it's not working.

SHIELDS: Margaret.

HUNT: OK, OK, go ahead, I'm sorry.

CARLSON: I was just going to say some observers say that actually the demonstration in favor of Arafat was smaller than you might have thought it would have been given that, you know, there were bullhorns out and leaflets being passed out and only about 2,000 people showed up.

MACK: Well, Margaret, I don't think Arafat is personally that popular. He is a symbol of resistance to Israel and a symbol of Palestinian determination to express their nationhood but his popularity has greatly declined.

People do understand that he stood in the way of important political and economic reforms that he and or at least cronies around him are very corrupt. That's generally understood I think.

SHIELDS: We're down to one minute.

HUNT: Mr. Ambassador, you said a moment ago that Arafat and the Palestinian Authority are not masterminding the terrorism but could they do more to crack down on this Hamas-led terrorism? Are they doing enough?

MACK: Well, they could certainly do more. It would require, in effect, being willing to start a civil war with Hamas and the Palestinian Islamic Jihad and some similar groups and I believe that Abu Mazen would have been willing to do that if he were really guaranteed that by taking that ultimate risk he would have had the ultimate prize of the dismantling of Israeli settlements and the establishment of a Palestinian state but he never got those kind of assurances from Sharon.

SHIELDS: Ambassador David Mack thank you for joining us.

THE CAPITAL GANG will be back with the outrages of the week.

THE CAPITAL GANG FACT: During the 1980s, Israeli attempted many time to assassinate Arafat while he and his PLO fighters were entrenched in Beirut.

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SHIELDS: And now for the Outrage of the Week.

The Federal Communications Commission has ruled that shock jock Howard Stern's radio show is "a bona fide news interview" program just like PBS' "News Hour with Jim Lehrer" or "Meet the Press." That exempts Stern from any equal time requirement for political candidates and means he can invite California gubernatorial candidate Arnold Schwarzenegger for a repeat performance.

Earlier, Stern whose show has featured graphic discussions of child molestation, repeated ridicule of minorities, and Stern's report on shaving his own rear end had told Schwarzenegger to provide video of his having sex and this is news - Margaret Carlson.

CARLSON: Ooh, yuck. The only think worse than New York Stock Exchange Chief Richard Grasso grabbing a $140 million payout is New York Stock Exchange watchdog Carl McCall saying there is "no malfeasance" in doing so. How else, he asked, to get good talent? Former Chair Bill Donaldson, now SEC Chair, must have been mightily untalented earning only $1.65 million a year.

This week, Grasso claimed he was due an additional $48 million. How can Grasso and McCall curb Wall Street excess after this? Larceny dressed in a dark blue suit and power tie is still larceny. They should both be fired.

SHIELDS: Al Hunt.

HUNT: Right on, Margaret. Mark, Rick Santorum, the Pennsylvania Senator who recently likened gay behavior to bestiality is at it again. In opposing additional childcare funds for poor welfare-to- work participants, he argued, according to the "Los Angeles Times," "making people struggle a little bit is not necessarily the worst thing."

At the same time, he has championed every tax cut and every tax break for the rich. Santorum believes in the class struggle as long as it's only the poor who struggle.

SHIELDS: Robert Novak in Los Angeles.