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CNN Late Edition with Wolf Blitzer

Levin, Hutchison Discuss Senate Power Shift; Will Bush Work Well With Congressional Democrats?; George Mitchell Discusses Mideast Peace

Aired May 27, 2001 - 12:00   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.
WOLF BLITZER, HOST: It's noon in Washington, 6:00 a.m. in Pearl Harbor, midnight in Ho Chi Minh City, Vietnam, and 1:00 a.m. Monday in Chosin Reservoir, Korea. Wherever you are watching from around the world, thanks for joining for us this two-hour LATE EDITION.

We'll get to interview with Senators Kay Bailey Hutchison and Carl Levin in just a moment, but first a check of the hour's top stories.

We begin in Jerusalem where two more car bombs have exploded in the past 24 hours. The newly appointed special assistant to Secretary of State Colin Powell, William Burns, is meeting with Israeli and Palestinian leaders today to try to stop all this violence. CNN's Ben Wedeman joins us live from Jerusalem with the latest.

(NEWSBREAK)

BLITZER: Ben Wedeman in Jerusalem, thank you very much.

And this note, coming up later on LATE EDITION, I'll speak live with the former U.S. Senate Majority Leader George Mitchell, whose international panel this past week released its recommendations on how to stop violence between the Israelis and Palestinians.

Meanwhile, here in Washington, a victory for the Bush agenda on tax cuts but also a huge loss for the Republican leadership in the Senate. CNN's Major Garret is standing by at the White House with more.

(NEWSBREAK)

BLITZER: Major Garret at the White House, thank you very much.

It was, as Major just pointed out, an extraordinary week on Capitol Hill. A big win and a big loss for President Bush.

BLITZER: Joining us now to discuss these issues and more are two key senators: in our Dallas bureau, Texas Republican Senator Kay Bailey Hutchison. She is the vice chair of the Republican leadership. And in our New York bureau, Michigan Democrat Senator Carl Levin, who is in line to become chairman of the Senate Armed Services Committee.

Senators, welcome back to LATE EDITION.

And I want to begin with you, Senator Hutchison. When did you first realize -- when did it dawn on you as leader in the Republican caucus in the Senate that Senator Jeffords was about to become an independent and leave the Republican Party?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Tuesday morning, it came together for me. I couldn't understand why the Democrats were holding up the tax cut bill with such great fervor. There are the usual delays in the legislative process, but it seemed really different in nature.

And then I started hearing more and more discussions of negotiations with Senator Jeffords and the Democrats, and I put two and two together, and it dawned on me Tuesday morning.

And of course, you know, it's been an incredible week, like a roller coaster, a great up and a great down.

BLITZER: You know, in the new issue of Newsweek magazine that's just coming out today, Senator Jeffords says this about his decision to defect from the Republican Party. He says, "I don't blame the president as much as I do the Senate leadership."

You're one of those Republican leaders in the Senate. Why were you caught so by surprise that Senator Jeffords was apparently so upset at the Republican leadership in the Senate?

HUTCHISON: Well, Senator Snowe and Senator Specter and Senator Collins all said they were totally surprised as well, and they were very close friends with Senator Jeffords. He didn't really give the indication that he was that unhappy.

And I think all of us wanted him to stay. We did put every effort forward that we could when we realized how serious it was. But, you know, it just didn't work out.

And now we are going to have to go forward and try to continue to work on the issues that are important to the American people. But there's a difference, there's no doubt about it.

BLITZER: Senator Levin, when did you begin to suspect that you were about to become the chairman of the Senate Armed Services Committee as opposed to the ranking Democrat?

SEN. CARL LEVIN (D), MICHIGAN: Well, the rumors were moving about a few days before he actually made the decision. But I was interested in what Kay said about delay on tax bill votes. We were trying to improve that tax bill. It had nothing to do with any discussion going on with Jeffords, as far as I know. We were working very hard to offer amendments which would make that bill a lot fairer to middle-income people, a lot more fiscally responsible.

And the amendments that we were offering were intended to do just that. There's a huge bonanza in this tax bill for upper-income Americans. Most of this tax bill goes to upper-income Americans. It's a tax bill which is based on projections which are very speculative of surpluses for 10 years. We wanted to make this tax bill more fiscally responsible.

The backloading of this tax bill, most of it coming into effect in the second five years, is also an irresponsible thing to do, because those are the years when more people and the so-called baby boom generation are going to be eligible for Social Security, and there will be greater demand on Medicare.

So these efforts to improve this tax bill, which were defeated by Republican majority in Senate, were honest efforts to make this tax bill a better, more fiscally responsible tax bill and, to my knowledge, had nothing to do at all with discussions going on with Jeffords. Those discussions had been going on apparently for some time.

BLITZER: They'd been going on, Senator Levin, at least according to Senator Daschle, for at least two months. Senator Daschle told me Friday night that he had been talking privately with Senator Jeffords, together with Senator Harry Reid, the number-two Democrat in the Senate. And they'd been discussing some of the problems that Senator Jeffords apparently felt that he had with the Republican leadership.

And on that point, Senator Hutchison, earlier today, another Republican senator, Chuck Hagel of Nebraska, was on Face the Nation. I want you to listen to what he said, because he had some strong words himself about the Republican leadership. Listen to Senator Hagel.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: We had become a bit arrogant. And when you become arrogant, you get sloppy, you disconnect. Politics is about people. Elections are about governance. And you can't disconnect the two. We must be a relevant party. We must be a party that appeals to America.

(END VIDEO CLIP)

BLITZER: Has the Republican leadership in the Senate, have they become arrogant?

HUTCHISON: Let me say two things. First I want to respond to something Carl said about most of the tax cuts starting in 2005. The rate cuts start this year, July 1. But we would like to have made all of the tax cuts effective nearer to now.

We couldn't because we have to continue paying down the debt to the maximum extent possible. And we had limitations of $1.35 trillion, so we had to fit everything in as best we could.

On your question, I think we have to say, look, maybe we're not listening enough, maybe we haven't brought everyone in to make them feel a part of our team and our effort. We're going to do better. I'm not going to say we're perfect, but we are going to try to build a team and make sure that everyone's voice is heard. BLITZER: Senator Levin, how much, in your opinion -- and you've been a longtime observer of what happens here in Washington -- how much of the blame from the Republican standpoint do you think should go to the White House as opposed to the Republican leadership in the Senate?

LEVIN: Well, Senator Jeffords said that the reason he finally made this decision is, in his words, that he had fundamental differences as a moderate Republican with the president on tax issues, on spending issues, on energy, on the environment, on choice and on the direction of the judiciary. That's a pretty broad number of differences that he said that he had with the president.

And so, I have to take Senator Jeffords at his word, that these are fundamental differences between he, as a moderate Republican, with this administration. And I have heard a lot of that, frankly, from moderate Republicans back home. They have some real concerns about the direction of the administration in those areas, including the environment and energy.

BLITZER: On that point, Senator Hutchison, the White House is insisting that they did try to reach out to moderates, including Senator Jeffords. Only, in the aftermath of the Jeffords's defection, several White House officials went on television and insisted that there may be some other reasons behind Senator Jeffords's explanation for his decision. We've put together a montage of some of those explanations from the White House. I want you to listen to this.

(BEGIN VIDEO CLIPS)

KAREN HUGHES, COUNSELOR TO THE PRESIDENT: A lot of people were surprised that someone who was elected as a Republican would consider changing parties.

KARL ROVE, SENIOR WHITE HOUSE ADVISER: It's a little odd that somebody who ran and got reelected last fall would turn around so quickly. And it's also, we think, a little disingenuous to say that he couldn't bring himself to support the president's agenda.

MARY MATALIN, COUNSELOR TO THE VICE PRESIDENT: He comes from a liberal state. He has ambitions in that state. I'm not making any suggestions other than there's more to this.

(END VIDEO CLIPS)

BLITZER: Other Republicans are saying, Senator Hutchison, as you well know, that he was apparently interested in retaining his chairmanship and perhaps even getting a better committee assignment if he became an independent. The environment committee is apparently going to be his to chair right now. Do you see these kinds of motives behind Senator Jeffords' decision?

HUTCHISON: Wolf, I'm going to take him at his word. There's no reason to rehash this other than to learn from it and try to strengthen the bond in our caucus and with the president of the United States. I think our president is trying very hard to reach out. I think he wants to work with the whole Congress, and I think that his agenda is not a partisan one. My goodness, education reform has been on the top of everyone's list for years, and now we're really going to get there.

Tax relief is not a partisan issue; it shouldn't be. We're trying to help every working family in this country, and we're going to continue and hopefully get more tax cuts.

I think that we've got to move on. We've got to start talking about what unites us, what we can come together on with Democrats and with moderate and conservative Republicans.

You know, in both the Democrat and Republican caucuses, we have a range of views, and your alliances are made on different issues. The energy alliances are different from the environmental alliances, they're different from the tax relief alliances.

And I think all of this talk about the moderate Republicans, or the conservative Democrats being left out is really not so. I think we are all edges of the spectrum and in the middle. And I think we just have to make our alliances and try to move forward with a majority.

BLITZER: Senator Huthison, as you know, before his decision was made public, Senator Jeffords did meet with President Bush. He told one of the newspapers in Vermont on Friday that he told the president this. He said: "I told him frankly that I think he'll be a one-term president if he doesn't listen to his moderates." And the president apparently responding, "I hear you, I hear you."

Is that good advice that Senator Jeffords gave President Bush?

HUTCHISON: Well, I think we all need to make sure that everyone who wants to be a Republican is welcome in our party. I think it's very important. We've got to put together coalitions that move forward the issues that we think the American people want us to address.

And I think this is a wake-up call. I'd kid you if I said that business is the same today as it was last Monday. It isn't. It's different. We're listening, and we're going to try to use this lemon to make lemonade and make our party better.

BLITZER: All right, Senator Hutchison, Senator Levin, stand by, we have to take a short break.

We'll continue our discussion about the party switch in the U.S. Senate, tax cuts, plus a whole lot more and your phone calls. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: The historic 50-50 Senate now becomes history itself.

(END VIDEO CLIP)

BLITZER: Senator Tom Daschle on Thursday. He'll soon be upgrading his title to "majority leader."

Welcome back. We're continuing our conversation on the power shift in the U.S. Senate with Texas Republican Kay Bailey Hutchison and Michigan Democrat Carl Levin.

Senator Levin, just as the Republicans have problems with some of the moderate members of their party, the Democrats have some problems as well. Senator Zell Miller, a moderate Democrat from Georgia, I want to you listen to what he said earlier this week about what he senses is happening in Washington right now.

He said this: "But a word of warning to my fellow Democrats at this time: What is sorely needed around here is much more getting along and much less getting even. The poisonous partisanship that has pervaded this place on both sides of the aisle must end."

I think it's a sort of a warning to the Democratic leadership that if you don't find a way to cooperate, to work more closely with the Republican leadership, as well as with the White House, not simply obstruct the president's agenda, he potentially could be deciding to defect from his party, as well.

LEVIN: Well, he's very clearly indicated that he's not going to change parties, but his advice is surely good advice. You can't get anything done without a bipartisan agreement on it in the Senate because of the need to get 60 votes on important issues in order to overcome the filibuster.

But what the difference is going to be now is that the agenda, which has so far not been allowed to be advanced that has broad support from the American people -- for instance, a patients' bill of rights so that we have decisions that are made by doctors and not by insurance companies as to what's important for people's health. That bill of rights is going to come right first on the agenda after the bipartisan education bill is resolved. We have not been able to advance that so far. We think we we've got a good change of doing it now.

Next is going to be hopefully a prescription drug program as an optional part of Medicare. We've been unable to move that forward. Now we are going to get a hearing for that bill and hopefully get that bill passed, because prescription drug prices are absolutely incredible.

And we're going to do something on energy to have a much more balanced energy policy. When the vice president of the United States said that conservation is not an important part of a comprehensive policy on energy, when he pooh-poohed the importance of energy conservation, and when the budget that came from the Bush White House had significant cuts in programs that will lead to energy alternatives and energy conservation, that is the wrong direction. We need a comprehensive, balanced energy program that includes energy conservation. That was one of the reasons -- one of the many reasons -- that Jim Jeffords decided his differences were so vast with the president that he just had to leave his party.

BLITZER: We're going to get to conservation. We're going to get to energy. I'm sure Vice President Dick Cheney will disagree strongly with your characterization of his position on conservation, Senator Levin.

But I want to just wrap up some of the politics of this extraordinary week in Washington with Senator Hutchinson.

Senator John McCain, the Republican senator from Arizona, in the new issue of Time magazine that's just coming out today, the Time magazine is reporting that even John McCain has been having some quiet discussions with the Democrats possibly about becoming an independent. He said this on Thursday: "Tolerance of dissent is the hallmark of a mature party, and it is well past time for the Republican Party to grow up."

A, Senator Hutchinson, are you concerned that Senator McCain could bolt, follow in the footsteps of Senator Jeffords? And B, is his advice to the Republican Party sound advice?

HUTCHINSON: Well, first of all, I think his advice needs to be well taken. I think we all need to make sure that when people disagree with a majority in the Republican conference, that they are treated with respect. And in every conference where I've been in attendance, they have been. Senator McCain has differed with Republicans on key issues, and he is greeted with great respect, and we consider him a friend.

I do not think he will change parties. I think that Senator McCain is a Republican, but I understand that he differs with us on some issues. And he brings some Republicans with him on certain issues, maybe not on others. I just think we're going to have to be very, very inclusive.

BLITZER: You know, Senator Hutchinson and Senator Levin, I want you both the listen to what the outgoing Senate majority leader, Trent Lott, said earlier today on ABC. He seemed to be suggesting that the switch from the Republican to the Democrats as the majority party in the Senate, that may not be the last switch coming up in the next few months. Listen to what Senator Lott had to say.

(BEGIN VIDEO CLIP)

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: In this very close, teeter- totter Senate, which may go back and forth another time or two in the next year and a half, it could force us to not do as much of that and try to find common ground as much as possible.

(END VIDEO CLIP)

BLITZER: Senator Hutchinson, do you know what he's referring to when he suggests that it may go back a time or two, back and forth over the next several months?

HUTCHINSON: I think he might have been speaking historically. Because the last time the Senate was 50-50, it actually did go back and forth I think as many as eight times in a two-year period. That may be a little more than is accurate, but it did go back and forth. And I think we've talked this week and that has been mentioned.

But, you know, I think that this is a real turning point in a lot of ways. I was talking to a former Democratic member of Congress a few weeks ago and the former member said, "You know, I got tired of having to be a jerk."

HUTCHISON: Now, I'm not saying that only Democrats are doing that. I think Republicans do that sometimes, but that's not the way to do the people's business.

And I think we are making a strong pitch to change that, to have respect for differing viewings, to try to come together where we can and then agree to disagree.

I don't think that the moderates or the conservatives or the liberals should ever have to give in on their principles. But I do think that we need to agree to disagree where we have to, but come together in a very civilized way. And we need to be more friends than adversaries.

BLITZER: Senator Levin, how worried are you that the Republicans might try to convince one of your fellow Democrats to switch parties, whether it's Zell Miller, Ben Nelsen of Nebraska, one of the other moderate Democrats?

LEVIN: Well, the effort may take place, but I just don't see that happening. I don't see any evidence of it.

But I surely agree with Kay that civility has got to always be the hallmark. And as a matter of fact, I think we are very civil inside the Senate. There are differences on issues. And those differences, in this case between Senator Jeffords and the Bush administration, were so deep that the senator made a decision based on conscience. And I think we ought to respect that.

And by the way, if there is anything we do respect in the Senate, first and foremost, it is the decision based on the conscience of any individual on any issue. We respect that in the Senate.

And we all have been in the position of having to differ with our parties at times, but this difference became so deep between this moderate Republican and his party that he just decided he wanted to become an independent, and I think we have to respect that.

And civility, though, is surely the watchword, and we're not going to get anything done, even on our Democratic agenda, unless we have a bipartisan attempt and a bipartisan effort, and as the current majority leader, still for a few days, Trent Lott, said, unless we seek to find common ground. But it will be on different agenda. And I think, Wolf, that's what we really ought to realize, is that what will come forward, what has now been side-tracked up until now but will now come forward, will be the Democratic agenda, which really does have broad public support in the area of health care and the environment and a number of other issues which have just simply been neglected.

BLITZER: All right, Senators, stand by. We're going to take another quick break.

More of our conversation with Senators Hutchison and Levin, plus your phone calls. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The tax relief package that was voted on today was agreed on last night after this week's change in the balance of power in the United States Senate, and it can be a model for the work that is ahead.

(END VIDEO CLIP)

BLITZER: President Bush on Saturday claiming his formula for bipartisanship will work in the new Democratic-majority U.S. Senate.

Welcome back. We're continuing our discussion with two senators: Texas Republican Kay Bailey Hutchison and Michigan Democrat Carl Levin.

I want to begin with a caller from Utica, Kentucky. Please go ahead with your question.

CALLER: Yes, I'd like to know if the panel believes that the defection of Mr. Jeffords will affect the outcome of a great amount of issues or only a small portion.

BLITZER: What about that, Senator Hutchison?

HUTCHISON: I don't think the outcome is going to change very much. I think what comes to the floor of the Senate in what order is going to change, and what the committees take up in order will change. But once an issue gets to the floor, I think there will be very little change because Senator Jeffords is an independent and I think he will vote in much the same way that he always has.

BLITZER: But on that point, Senator Hutchison, you realize of course that with the Democrats in the majority, controlling the committees, the chairmen of committees are going to be all Democrats, it's going to be much more difficult to get legislation out of committee to the Senate floor.

HUTCHISON: Oh, I think that's right. I think that's the real issue, and the real difference is what comes out of committee and what will be brought up on the floor in what order. There's no question about that.

BLITZER: Senator Levin, you're going to be chairman of the Armed Services Committee, replacing your friend, Senator John Warner of Virginia.

You have been critical of the president's national missile defense system. So far as you're concerned, as long as you're chairman of that committee, do you think that missile defense as President Bush envisions it is dead?

LEVIN: I think, no. I think, instead of being dead, we're going to have a realistic look at it, because it creates some real instability, number one. And the issue on missile defense is whether or not we are more or less secure with unilateral deployment, if that is what it comes to. And violation of a treaty which could lead to a very negative and dangerous response on the part of Russia, for instance, or China, is against the advice of some of our closest allies.

So we're going to be taking a very realistic look at this, because this administration has simply not looked at the problems which it creates. They have only looked at the fact that there's a threat. But on the other hand, there are much greater threats to which we are not addressing resources.

This is the least likely of all of the possible ways in which a weapon would be delivered, since there could be a truck or a ship or a suitcase which could deliver the same weapon.

So we're going to look at this national missile defense in a much deeper way, in a much more thorough way and in a much more realistic way.

And we're also going to get the advice of some of our military leadership. They're very concerned that some of the resources going into this system, not yet proven, could be taken away from other more- needed systems.

BLITZER: One other issue, Senator Hutchison, that will be, of course -- the White House will have to rethink is its whole attitude towards judicial nominees. With the Democrats in control of the Judiciary Committee, will President Bush now simply be forced to submit more moderate Republicans for key judicial positions, if something should open up on the Supreme Court for example, than he would have done had the Republicans retained the majority?

HUTCHISON: Well, I certainly hope that the Democrats will give great deference to the choices of the president, just as many of us did for the choices of President Clinton. I certainly would not have chosen many of the same nominees that President Clinton did for the judiciary, but I voted for many of them, believing that it was his prerogative to make these choices.

I also want to say, on Carl's position on missile defense, that I very much hope that Carl will work with the White House, because many of our allies, once they have discussed the good parts of a missile defense and how it can also protect our allies, do turn the other way and are supportive of our making that kind of effort, because they probably couldn't afford to do it. They know we can, and they know that if we are protecting ourselves that we will be protecting them wherever we are together in the field or, if it is a NATO situation, where we are also going to be protective of our allies.

BLITZER: Senator Levin, will you work with the White House on that, as Senator Hutchison is recommending?

LEVIN: We have urged the White House to take a look at the entire missile defense situation, to take a look at whether or not, on the whole, it would make us more or less secure. Because there are many, many ways in which it could make us less secure if we pull out of a treaty, unilaterally, with the result that Russia, for instance, instead of dismantling nuclear weapons, would keep more nuclear weapons on its soil, more nuclear material for it to be stolen or sold surreptitiously. China's negative response could make it much more dangerous in the Taiwan Straits.

We have urged the White House to look at all of the negatives, not just the one positive that it sees, to see whether, overall, this would make us less secure, which so many of our allies believe it would under the current circumstances since we have this longstanding treaty with Russia.

BLITZER: All right. We have another...

HUTCHISON: If I could, could I just say that I think...

BLITZER: Go ahead, very briefly.

HUTCHISON: ... it would be more of a deterrent if our enemies, that might be thinking of lobbing a missile, knew that we had a defense.

BLITZER: All right.

LEVIN: But they can use a truck real easily.

(LAUGHTER)

HUTCHISON: We need a defense on that, too.

BLITZER: Let's take another caller from Alaska. Please go ahead with your question.

CALLER: Yes, good morning. Do you think that the reaction of the three White House officials that you just showed demonstrates a denial in attitude of the Republican leadership on tolerance?

BLITZER: What about that, Senator Hutchison?

HUTCHISON: No, I think that what they were saying was a view, but I don't think that we should be dissecting exactly what Senator Jeffords' motives are. There are very differing views on that. I think we need to say, "We've made some mistakes. We're going to try to do better, and we're going to try to use this as a lesson and strengthen our majority for 2002."

BLITZER: All right.

LEVIN: I've got to tell you, I think the White House response on this really misses the whole point. If they read Senator Jeffords as being personally quirky, which is the word that the White House press secretary used, or being disingenuous, which is the word which Mr. Rove which used, I think they are so missing the boat on this.

LEVIN: What this was was a statement of decision on principle and on conscience, a very difficult one for Senator Jeffords. We all have great respect for Jim Jeffords. And I think the White House attack, the kind of personal response to this, really missed the point of what was at stake and what the decision was based on and what is going through the minds of an awful lot of moderate people across this country about some of the Bush agenda.

BLITZER: All right, Senator Carl Levin and Senator Kay Bailey Hutchison, we have to leave it right there. I want to thank both of you for joining us on LATE EDITION.

HUTCHISON: Thank you, Wolf.

LEVIN: Thank you so much, Wolf.

BLITZER: Thank you so much, and have a nice Memorial Day weekend as well.

Just ahead, as the violence in the Middle East continues, a report offers recommendations on how to stop the bloodshed. But is it mission impossible? We'll ask international negotiator and former Senate majority leader George Mitchell. Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're looking at pictures of the 14th annual Memorial Day Rolling Thunder motorcycle demonstration here in Washington. The event is held to recognize and remember American prisoners of war and those still missing in action from the Vietnam War.

The bikers are also rallying for increased health care benefits for veterans.

Still ahead, former Senate majority leader George Mitchell talks about the new balance of power in the U.S. Senate. Plus, his report on pushing for peace in the Middle East.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE MITCHELL, FORMER U.S. SENATOR: The greatest danger of all is that the culture of peace nurtured over the previous decade is being shattered. (END VIDEO CLIP)

BLITZER: International negotiator George Mitchell on Monday, discussing how to stop violence in the Middle East. Senator Mitchell chaired a five-member panel that outlined steps for Israelis and Palestinians to resume peace talks.

The former Senate majority leader joins us now from our New York bureau to discuss his panel recommendations, and later we'll be discussing the shake-up in the U.S. Senate as well.

Senator Mitchell, welcome back to LATE EDITION.

MITCHELL: Thanks for having me, Wolf.

BLITZER: I read very carefully your report. I want to put it up on our screen now for our viewers in the United States and around the world some of the highlights of what you recommended with your colleagues.

Among other things, an immediate ceasefire; a freeze on all Jewish settlement construction; resumption of joint security cooperation between the Israelis and the Palestinians; denunciation of terrorism. The Palestinian Authority should prevent firing on Israeli solders and civilians. The Israeli military should limit the use of lethal force, and there should be negotiations to resolve the underlying causes of this conflict.

The question is this: In the report, you don't have a specific -- at least I missed it -- a specific recommendation on how to bring these two sides together. Does the United States once again have to get involved at a very, very high level to do the job, or is there some other mechanism that you have in mind?

MITCHELL: The United States, of course, is involved, with the Secretary of State Colin Powell, who's very much engaged.

We stated explicitly in the report that the timing and sequence of the confidence-building measures that we suggested, more than a dozen, are obviously crucial and can be decided only by the parties. And so I think it is important that they be brought together. Hopefully that process is under way now with Secretary Powell's personal representative there, former Ambassador Bill Burns, and they ought to start working on a process to do this.

You set forth several of the recommendations, but they were in sequence, as you know, in the report. First, an unconditional and immediate ceasefire and an immediate resumption of security cooperation, and then a cooling-off period during which there would be an exchange of confidence-building measures and then resumption of negotiations.

BLITZER: Well, you've been an observer of the Middle East for a long time. I've been covering that part of the world for almost three decades myself. I've never seen any significant agreement achieved over there at the level of Ambassador William Burns, who's there right now.

The Israelis and the Palestinians, they want the secretary of state, they want the president of the United States, they want a much higher level than an assistant secretary of state for Near Eastern affairs -- he hasn't even been confirmed for that position yet -- to be involved in this kind of shuttle diplomacy if it comes down to that.

MITCHELL: That will be a decision, of course, for the president and the secretary of state. I think the secretary is well aware of the importance of active American participation of leadership.

I've said on several previous public occasions that it is unlikely that there will be any substantial progress toward a final settlement without active American leadership and participation.

BLITZER: At the very highest level, right?

MITCHELL: Well, I don't think you can predict that at this point. I think there's somewhat of an unfairness to compare the last three months of the Clinton presidency with the first three months of the Bush presidency.

The active participation by the president and secretary of state depends upon the circumstances which exist. At the time that President Clinton had the summit, it was appropriate. Right now it may not be, but I think the administration is prepared, when it will be appropriate, to take active leadership.

BLITZER: Has President Bush or Secretary of State Powell asked you to take that kind of role?

MITCHELL: No.

BLITZER: Would you?

MITCHELL: Well, I told the secretary and the president, and I said publicly at the press conference last Monday, that, speaking on behalf of the full committee, we would do whatever we could to be of assistance, should our assistance be requested and required.

BLITZER: Do you anticipate that that might happen, that they would come to you, given the last several months that you were engaged in putting this report together, that you sound like someone who might be a credible emissary, given your experience also in Northern Ireland?

MITCHELL: Well, that's for others to judge, Wolf. My hope is that they'll get this process going right now. I think they're in discussions as we speak to try to establish a framework.

We said in the report, and I earlier alluded to it, that the timing and sequence of these steps is essential. When I went back to Northern Ireland at the request of the British and Irish governments in 1999, when the agreement there appeared ready to fall apart, I spent three and a half months. It only took me a short time, just a few days, to figure out the steps that had to be taken.

Most of the time was taken up in working out a sequence of events. Because of the high level of mistrust, no party is going to take a step unless they know something else is going to happen, and so on down the line. And you've got to organize an effort that can be the rebuilding of confidence. I think that's what's needed right now, and I believe that's what the administration's trying to do.

BLITZER: Prime Minister Ariel Sharon in Israeli, shortly after you released your report, did say Israel was ready for an immediate ceasefire. And his foreign minister, Shimon Peres, spoke out about it as well, as did the Palestinians.

I want you to listen to the Israeli and the Palestinian response to your call for an immediate ceasefire. Listen to this.

(BEGIN VIDEO CLIPS)

ARIEL SHARON, ISRAELI PRIME MINISTER: I invite the Palestinians to follow the same trick. If it is good for our public relations, why shouldn't it be good also for the Palestinian public relations? So if you can, in the name of public relations, to achieve a mutual ceasefire, this will be a contribution not just in public relations but also to peace.

YASSER ABED RABBO, PALESTINIAN INFORMATION MINISTER: Sharon's call for a ceasefire is misleading and inaccurate, since this is not a war between two armies or two states, but to other an aggression by an occupation army against an occupied people.

(END VIDEO CLIPS)

BLITZER: What Yasser Abed Rabbo is basically saying is that there can't be a ceasefire actually until the Israeli occupation itself ends. That has to be the first step in the process. How does that fit in to your recommendations?

MITCHELL: Well, of course, that's is not what we recommended.

MITCHELL: We recommended an immediate and unconditional ceasefire and immediate resumption of security cooperation.

However, we also said, and I believe it's stating the obvious, that a cessation of violence cannot be sustained for long, and certainly not indefinitely, unless it is followed by further steps. And that is what I think is the process that has to occur. There has to be a means of restoring confidence.

Wolf, you know this area much better than I do. Confidence is gone. It's been shattered, not just among the political leaders but among the people on both sides. They don't trust, don't believe the other side, and so each is fearful of taking steps that would then not be reciprocated.

And what they need now is coming together and working out a sequence of steps that would both assure the continuation of a ceasefire -- although we say it ought to be immediate and unconditional, and we mean that -- but would assure a continuation over time, as confidence is gradually rebuilt and meaningful, serious negotiations are resumed.

BLITZER: As you well know, the United States and the international community for years has urged Israel to halt settlement construction in the West Bank and in Gaza. Labor governments in Israel, Likud governments in Israel, they've repeatedly rejected all those calls.

What gives you any reason to believe that your proposal, your recommendation for a freeze on all Israeli settlement activity, including the so-called "natural growth" settlement activity, that that's going to happen?

MITCHELL: Well, first, of course, as you correctly point out, every American government for more than a quarter century has opposed Israeli policy and actions with respect to settlements, and we cited in our report President Carter, President Reagan, President Bush, President Clinton and the current administration. Indeed, we quoted a statement by President Reagan 20 years ago saying that what's needed to rebuild confidence is an immediate freeze on settlements.

But the fact is that, during Camp David, Prime Minister Begin did freeze settlements for a brief period of time. And then later, during his tenure in office, Prime Minister Rabin did freeze settlements. So there is some precedent for it.

Secondly, the current government policy is not to expand settlements but just to permit construction for natural growth. There's been controversy over whether that has or has not been actually implemented. But it is a recognition by the current government that some restriction on settlement activity is appropriate in the circumstances.

So I don't think it's unrealistic to think that, in the proper circumstances, with other steps occurring in this confidence-building process, that it may be possible for this step to be taken.

BLITZER: Senator Mitchell, we only have a minute left, but, as you were releasing your report, your recommendations on the Middle East this week, there was a historic development in the U.S. Senate. You were once the majority leader in the Senate.

What advice do you have for your good friend Tom Daschle, as he's about to become, first time really in six years, the Democratic majority leader in the Senate?

MITCHELL: He doesn't need any advice from me. Tom Daschle is an outstanding leader.

When I became majority leader, the custom had been for the majority leader to also be chairman of Democratic Policy Committee. I broke that custom, and I named Tom as chairman of the Policy Committee. He did a great job, as he did as minority leader, and as he will as majority leader. He's very able, reasonable, even-tempered, doesn't get too high when things are great, doesn't get too low when things are bad, which of course you need in the Senate because there are a lot of ups and downs. I think he's going to do a great job. I couldn't be more pleased.

BLITZER: You know, Rich Bond, a former Republican Party chairman, he had some tough words this week, an old nemesis of yours, in The Washington Post. He was quoted in a David Broder article as saying this. He said: "Mitchell was Daschle's mentor, and you know what a wrecking crew he was. I see an eerie parallel."

MITCHELL: Well, of course, Rich Bond's theory is that Republican leaders are statesmen and Democratic leaders are wrecking partisans.

(LAUGHTER)

MITCHELL: I understand that's part of the process that goes with the title.

I see Tom's already being identified as a partisan, an ultrapartisan.

It's funny -- when Republican leaders blocked President Clinton's initiative, Rich and others would say they were doing a great service for the country. When Democratic leaders block Republican initiatives, we're accused of being partisan. And the reverse is true. It's part of the political process.

I don't take anything he says about that very seriously.

BLITZER: Senator George Mitchell, thanks for joining us on LATE EDITION.

MITCHELL: Thank you, Wolf.

BLITZER: We have to take a quick break.

For our international viewers, World News is next.

For our North American audience, stay with us for the second hour of LATE EDITION. Former presidential advisers John Podesta, Ken Duberstein and David Gergen assess how President Bush will work with the new Democratic majority in the Senate. Plus, our LATE EDITION roundtable and Bruce Morton's last word. It's all ahead in the next hour of LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: This is the second hour of LATE EDITION, the last word in Sunday talk.

(BEGIN VIDEO CLIP)

SEN JAMES JEFFORDS (R), VERMONT: I have changed my party label, but I have not changed my beliefs. (END VIDEO CLIP)

BLITZER: A political earthquake shakes the White House. How will President Bush adjust his strategy to work with the new Senate majority?

We'll ask former Reagan Chief of Staff Ken Duberstein, former Clinton Chief of Staff John Podesta and former presidential adviser David Gergen.

Plus, our LATE EDITION roundtable: Steve Roberts, Susan Page and Christopher Caldwell. And Bruce Morton has the last word on a new necessary congressional evil, compromise.

Welcome back. Will President Bush rework his Senate strategy when the Democrats take charge? We'll speak with several veteran presidential advisers in just a moment, but first let's go to Donna Kelley in Atlanta for a check of the hour's top stories.

(NEWSBREAK)

BLITZER: Thank you very much, Donna.

Now we turn to three top political advisers who have weathered many battles between the White House and Capitol Hill. Joining us here in Washington: Ken Duberstein, he was the chief of staff to former President Ronald Reagan; David Gergen, an adviser to several former presidents; and John Podesta, chief of staff to former President Bill Clinton.

Gentlemen, thanks for joining us. Welcome back to LATE EDITION.

I want to begin with you, John Podesta. Andy Card, who succeeded you as White House chief of staff, he was on Face the Nation earlier today. I want you to listen to the line that he is now putting forward, as to why Jim Jeffords, the Republican from Vermont, this past week became an independent. Listen to this.

(BEGIN VIDEO CLIP)

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: I think it's significant, but it's not earth shattering. I mean, after all, Washington has functioned for many, many years with the White House of one party, the House was of another party and the Senate was of a different party. We'll be able to make things happen.

(END VIDEO CLIP)

BLITZER: He's trying suggest that it is not going to be all that great a matter. The White House is still going to be able to get its agenda through.

JOHN PODESTA, FORMER WHITE HOUSE CHIEF OF STAFF: Well, in one sense the same hundred senators are still voting on the agenda. But the question is, what's the agenda? And I think there is a significant change now that Tom Daschle will be the majority leader. He'll have a significant impact in terms of what comes up first. He has already pledged to move forward with bipartisan education legislation. But after that, it is the patients' bill of rights, prescription drugs for Medicare, raising the minimum wage. So, it's probably not the sequence that President Bush had hoped for.

BLITZER: Is it a huge, earth-shattering event for the White House?

KEN DUBERSTEIN, FORMER WHITE HOUSE CHIEF OF STAFF: I think it's a significant event but not earth shattering.

You know, Ronald Reagan was confronted with a huge Democratic Congress. And Tip O'Neill used to say, "I don't like compromising with Reagan, because Reagan got 80 percent of what he wanted every time." Well, you either have that model or you have the Bill Clinton model, which was 100 percent or nothing when it came to health care reform.

And it seems to me, that George Bush getting 70 or 80 percent of what he wants, whether it's on tax relief, education reform or a patients' bill of rights, is very much what the direction is going to be now.

BLITZER: So he's going to have to make major compromise right now?

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: I think so, and I think we're underestimating the importance of this. This should be a wake-up call for White House and for Republicans.

After all, Republicans fought for nearly 50 years to gain simultaneous control of the Senate, the House and the White House, and now, in less than five months, they've let that slip way from them.

So that, in itself, should be -- they wanted to move into a new politics; now they're back into the old politics, politics we've seen for a long time. But they hope to form a new majority in the country and carry out a conservative agenda. Now this is going to be hand-to- hand combat.

BLITZER: And if you watched Andy Card, the White House chief of staff, this morning, he was much more conciliatory and not going after Jim Jeffords, as opposed to some of his colleagues at the White House.

GERGEN: Their initial response, I thought, was not well considered. It's understandable they would want to put a brave face on this, but to go after Jeffords, to go after the moderates as if they somehow are the problem -- yes, Jeffords was a loner, but the White House was also not doing enough reaching out to the moderates.

BLITZER: The editorial on Friday's New York Times put it this way. Listen to this. I'll put it up on the screen. "The White House troika of Mr. Rove, Andrew Card, the chief of staff, and Karen Hughes, a counselor to the president, must take a major portion of the blame for the defection and must assume a major portion of the responsibility for getting Mr. Bush back to the center." DUBERSTEIN: I think what the key is is to reach out and work with all 100 senators.

You know, senators are all independent contractors. Even those of your own party are not your wholly owned subsidiary of any White House. And so I think it is important for them to do a better job of reaching out, a better job of listening rather than talking. And they'll be able to do some of the compromising that I think is so fundamental to any president.

You also have a dichotomy in any White House between the true believers and those who really want to govern. And what the job is of George W. Bush is to bring both of them together to get some common- sense policies and be able to work not only with Denny Hastert as speaker, but also Tom Daschle and Trent Lott.

BLITZER: How much of the blame goes to the senior White House staff -- maybe not necessarily even the senior White House staff, but the president and the vice president? Dick Cheney, afterall, is president of the Senate.

PODESTA: Well, there were rumors around about this for a couple of weeks, and it was actually in the Vermont press over the weekend, and they say they didn't hear about it until Tuesday. So I don't think people had a very good listening device going on in the Senate.

But I think the real question is not, did they just drive Jim Jeffords out and what is it going to mean to the 100 senators and to the relationship with the Congress, but really David's point, which is, are they driving moderate voters out, independent voters out away from them by pursuing a pretty hard-right agenda, having gotten elected with less than a majority in the election?

DUBERSTEIN: But, Wolf, let's be fair. What John is suggesting is that Al Gore won the election, that Hillary Clinton is the majority leader. And the answer is to find...

PODESTA: Come on, Ken, I'm not suggesting that.

DUBERSTEIN: Let's get in the middle.

PODESTA: You know, George Bush did sort of win the election, but I'm not suggesting....

(LAUGHTER)

DUBERSTEIN: George Bush won the election, and he is...

PODESTA: And I didn't say anything about Hillary Clinton.

He is the president of United States, and people need to recognize that.

DUBERSTEIN: And that he's governing on what he campaigned on, that in fact, you know, he was victorious with. GERGEN: But let me get back to this, Wolf, because it's important. Twenty years ago, as I recall, when we were in the same trenches together, Ken Duberstein was running our operation with the House. He got Jim Jeffords to vote for President Reagan's economic program by a lot of reaching out and by a lot of personal time with him, and by the president being willing to reach out.

Now, in this case, the president of United States has not sat down and talked to Tom Daschle in weeks and weeks and weeks. He has not had conversations, serious conversation. I don't think he's had a serious -- I don't think he's had a policy conversation with Lincoln Chafee, a moderate, since Bush came to Washington.

He has not met -- he needs to be meeting on a bipartisan basis with both parties, and he needs to bring in a lot more Republicans on a regular basis.

BLITZER: On that point, Ken, the fact that the president of United States and Lincoln Chafee, the moderate Republican from Rhode Island, have not had a substantive conversation over these past four months, doesn't that border politically on almost the irresponsible?

DUBERSTEIN: No, what you're asking George W. Bush to do is in fact reach out much more and not only, as I said, to talk but, more importantly, to listen. He needs to work with each of the senators, not just...

PODESTA (?): But the fact that he hasn't done that...

DUBERSTEIN: But not just the Republicans, but also many of the Democrats.

We have finished the honeymoon period, Wolf. Now we're talking about rearranging the furniture a little bit. And in doing that, you have to go back and forth and listen to the concerns of senators. They're independent contractors. You need to work with them.

BLITZER: President Clinton understood that, although he never really, as you well know, John, had a great relationship with the Hill.

PODESTA: Well, you know, in 1997, we were able to forge a bipartisan compromise on the balanced budget agreement. That also, I think, reflected our values, as the largest expansion, for example, of higher education funding since the GI bill.

PODESTA: After that, I think we went into a period of partisanship. I think that we attempted to reach out to the Republican leadership. You know, I think they were more interested in running at the 2000 elections, but we tried.

And I think in some cases, even up to the last day, we forged a bipartisan agreement on one of the president and the speaker's priorities on this new markets initiative to make investments in the places that have been left behind in the economic boom of our country. So we tried, but, you know, it can be difficult. And he's just got to be able to get in there and talk, but to, as Ken said, really listen too.

BLITZER: All right. We're going to take a quick break. We have a lot more to talk about, including Senator John McCain. John McCain, Time magazine reporting today that he's been flirting with the Democrats as well. Ken Duberstein is a strong supporter, close friend of John McCain. We'll ask him what this may or may not mean.

More of our discussion with John Podesta, Ken Duberstein and David Gergen, plus your phone calls. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We are continuing in our discussion with former Reagan Chief of Staff Ken Duberstein, former presidential adviser David Gergen and former Clinton Chief of Staff John Podesta.

Ken, you're very close to John McCain. You saw the story in the new issue of Time magazine. One Republican who has been in quiet talks with Democrats about the possibility becoming an independent is Bush's one-time presidential rival, John McCain.

DUBERSTEIN: John McCain is a Republican, born that way, bred that way and bound and determined to stay that way.

But that doesn't mean that on patients' bill of rights and some of the other issues on gun control, et cetera, that he may not be the Republican version of a John Breaux of trying to bring all sides together.

I think John very much is an independent contractor, will work with the White House. I think the White House is doing a much better job of reaching out to John McCain than they did initially.

So I think you're going to see an awful lot of good dynamic of John trying to forge these so-called bipartisan compromises.

BLITZER: How nervous, John, should the Democrats be about the Republicans cherry-picking off one of those moderate Democrats and once again tilting the way in favor of the Republicans?

PODESTA: Well, I'm sure they are talking to a couple. But I think the Democrats have done a pretty good job of trying to reach out. And I think Tom Daschle's leadership is really noted for his ability to really sit down with each member in a very diverse caucus and try to bring people together, and I think he'll try to pursue that.

BLITZER: Do you think there is going to be more changes between now and the mid-term elections in November 2002?

GERGEN: I doubt it. But I do think that Tom Daschle now is going to emerge with focus on him for the next few weeks and could emerge from all of this as the presidential contender for the Democratic Party in 2004.

He looked very Lincolnesque when he came out other day, the other day that Jeffords moved over. And I think the way he exercises leadership now is going to attract a lot of attention in the next few weeks.

To go back to Ken's point on John McCain, you know, one of the issues now that I think is going to move much, much closer to possibility of an enactment is campaign finance reform because the House has to act still. But then there may be conference, and now the Democrats will have much larger voice on who is going to go that conference from the Senate side. And that could bring out a bill, I would assume, that will be much closer to McCain-Feingold than would have been the case if Mitch McConnell had led the Senate delegation on the committee.

DUBERSTEIN: Assuming the Democrats really do want campaign finance reform.

GERGEN: Exactly.

DUBERSTEIN: They have been hiding behind McCain's shield for a long time.

BLITZER: Let's see if that really happens.

Let's take a caller. We have caller from Arizona. Go ahead with your question, please. Arizona? Can you hear me, Arizona?

DUBERSTEIN: Another McCain...

(LAUGHTER)

(CROSSTALK)

BLITZER: Maybe John McCain -- he's out in Arizona this week.

You know, John Podesta, correct me if I'm wrong, I believe you once worked for Tom Daschle on Capitol Hill. You know this man quite well. I want you to listen to what he said earlier today on Meet the Press about his desire to work with the Republican leadership in the Congress as well as in White House. Listen to this.

(BEGIN VIDEO CLIP)

DASCHLE: If there has ever been a time for us to begin working together, this is it. Now we've got to find a way with which to talk more effectively, work more -- in fact, I think it would be a great opportunity, Tim, for him to call a bipartisan meeting down to the White House right now. Let's all come down together. We haven't done that in a while, and I think it'd be terrific.

(END VIDEO CLIP)

BLITZER: President Clinton used to do those bipartisan meetings all the time. Occasionally they would emerge, Newt Gingrich and Trent Lott, saying they had been charmed by the president.

PODESTA: And sometimes we got something done as a result, and I think that's quite a good suggestion.

David mentioned that the president and the new leader hadn't talked in months, and I thought that was both -- his phone call in the immediate aftermath of the Jeffords' decision to President Bush and saying, let's sit down and work together; we can get some things done.

I think he believes that. I think that is what the caucus wants to do. And I hope that the president will take Senator Daschle up on his offer and invite him down to the White House see what they can accomplish.

BLITZER: Do you agree with David that this does put Tom Daschle, someone you once worked for, in a position to be the Democratic presidential nominee in 2004?

PODESTA: Well, you know, I think it's early. There are a bunch people running. But I think that, you know, he's going to be at the top of the list of the most mentioned, I think, in the weeks and months to come.

BLITZER: What kind of relationship do you think could emerge between President Bush and Tom Daschle?

DUBERSTEIN: I think Tom Daschle is a very reasonable, good guy. I think he is, in fact, the consensus builder.

My concern is, which way in the Democratic caucus is he going be dragged? We were all talking two weeks ago about how Tom Daschle was beating up Max Baucus on supporting a tax relief bill that was ultimately passed.

BLITZER: Max Baucus is the ranking Democrat on the Finance Committee.

DUBERSTEIN: Yes. And he has to choose whether or not he is going to incorporate Zell Miller and Max Baucus and some of the others, Ben Nelson, or is he going to be much more toward the Paul Wellstone and others.

So I think there is a real juggling act that Tom Daschle is going to have do as well, and especially in a 50-49-1 Senate. I think it's going to be a very difficult act, but it is something that Tom Daschle can build on.

PODESTA: You know, he won his leadership by one vote.

BLITZER: Against Chris Dodd.

PODESTA: And he was able to bring that whole caucus together. And I think he can do same thing in the Senate.

GERGEN: We need to face this point, though, Wolf, and that is, there is a division in the Republican party about how now to play this. We're talking about reaching out, working with Daschle, trying to work with him.

GERGEN: There are conservatives, and they're a very strong voice in the Republican Party, who say, this is an opportunity to really throw down the gauntlet, to go to combat, to make the issues very clear, not to compromise with him. They would argue, for example, in Pennsylvania, where a moderate like Arlen Specter is -- you know, people say we ought to reach out to Arlen Specter. And the conservatives say, "Well, wait a minute. Rick Santorum, the conservative, is more popular in Pennsylvania in some circles than is Arlen Specter. We ought to keep pushing for the Rick Santorum approach to government, be much tougher and throw the gauntlet."

I happen to think that's the wrong approach, but I'll have to tell you, there are a lot of people out there believe it.

(CROSSTALK)

DUBERSTEIN: ... George W. Bush is much more, if you go back to his campaign slogan, a uniter, not a divider. I think George W. Bush is interested in getting things done, whether it's tax relief, education reform or missile defense.

GERGEN: He calls himself a "uniter."

DUBERSTEIN: ... and so he has to reach out even more, David. And I think it's reaching out not only to the Democrats but also to all elements in the Republican Party. That's the job that George W. has over these next several months.

BLITZER: All right. We're going to take another quick break, but we have a lot more to talk about.

When we return, more of our discussion with Ken Duberstein, John Podesta and David Gergen, plus your phone calls. LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our discussion with former Reagan chief of staff Ken Duberstein, former presidential adviser David Gergen and former Clinton chief of staff John Podesta.

Olympia Snowe, the moderate Republican from Maine, was on TV earlier today. She had some words, I think some rather candid, blunt words about the state of the Republican Party right now. Let's listen to what she had to say.

(BEGIN VIDEO CLIP)

SEN. OLYMPIA SNOWE (R), MAINE: It was a sad day, I think, for the Republican Party, and even sadder if we don't confront the reality in terms of why he left. I think the manifestation of his departure, you know, represents a larger problem.

(END VIDEO CLIP)

BLITZER: Ken Duberstein, what is that larger problem?

DUBERSTEIN: Well, it's the tension in the Republican Party between the right and the moderates, whether it is on social policy or on spending and tax policy.

What Olympia Snowe represents is somebody who is very much interested in tax relief and has a bias toward the Northeast and some of the social issues. What George W. Bush has been so good at, I think, is bridging the gap in the Republican Party. But obviously, it wasn't enough for Jim Jeffords.

And what he has to focus on, is making sure to unite the Republican party, keep it united behind his leadership, by enunciating some positions and some policies and a playbook that plays to the mainstream, not just to the far right.

BLITZER: David, do you think that the political leadership of the White House now gets it?

GERGEN: I don't know. I think we'll only know here in the next few weeks on how they act.

What I do believe is, the Republican Party is a plane that needs two wings to fly. It needs a conservative wing, but it also needs a moderate wing. And the truth is that conservatives now are very dominant within the Republican Party. They are the majority within the Republican Party. But if they want to make the Republican Party the majority within the country, then they need moderates like Olympia Snowe.

Let me just cite a couple of numbers. Last election, the national election, self-identified people who went to polls, 20 percent came out saying they were liberals, 29 percent said they were conservatives, 51 percent said they were moderates. The moderates hold the swing vote in this country.

And if the Republicans want to build a majority, they need the Northeast. And they can't write off the Northeast, they can't write off California, in order to build a majority.

So the Olympia Snowes are pivotal players now if they want to build a majority. Otherwise, I think the Democrats can come right back in and say, wait a minute, we represent you on health care, on the environment, on a lot of these other issues that really cut in the suburbs.

BLITZER: John Podesta, you're good friends James Carville and Paul Begala had an opinion piece in the New York Times today.

Among other things they wrote this: "If the Democrats follow Jim Jeffords' lead and speak with candor and conviction about George W. Bush's misdirected plans, if they stiffen their spines and use their power to stand up for the majority of Americans who rejected the Bush agenda in the November election, they will be worthy of the majority status Jim Jeffords has given them." PODESTA: Well, I think that the fights of principle are important fights, but I basically disagree with the political direction that article took. I think that Tom Daschle set the right tone. It's important to project to the American people that the Democratic Party -- and I believe this -- want to get something done on the patients' bill of rights, on prescription drugs, et cetera. That's why people vote for Democrats, because they want to see those things accomplished. And I think Tom Daschle's leading in the right direction.

DUBERSTEIN: I think one of the interesting dynamics yet to be explored is the impact this is all going to have on the House Republican moderates. That, if in fact George W. Bush has to come out of the House with the strongest possible vote in order to balance out Daschle, that in fact it's going to put a premium on the House moderates. And the question is whether or not they're going to exercise their independence or they're going to be overwhelmed...

PODESTA: That would be a first.

(LAUGHTER)

DUBERSTEIN: ... or they're going to be overwhelmed by some of the Tom DeLays and Dick Armeys.

BLITZER: Should Trent Lott be nervous about retaining the Republican leadership position in the U.S. Senate?

GERGEN: I don't think so. Ken is very close to Chuck Hagel, but I don't see Hagel right now challenging him, and I don't see Don Nickles challenging him. I think he's going to be fine through the 2002 election.

But the Republicans have to take stock. After all, it was only a few years ago, in 1996, they had 55 seats. They're now down to 49 in the Senate.

So, the trend line is not in the right direction. If the 2002 election goes against the Republicans, then I think that there are going to be some shake-ups, not across the board in the leadership, but...

(CROSSTALK)

DUBERSTEIN: But I think the Republican leadership in the Senate is solid for the time being.

GERGEN: Through 2002.

DUBERSTEIN: Through 2002.

BLITZER: For Trent Lott?

DUBERSTEIN: Absolutely.

BLITZER: So he'll be the minority leader? DUBERSTEIN: And Denny Hastert in the House. I think you see a leadership structure that is very much in place, will stay that way.

BLITZER: All right.

GERGEN: Yes. What is their best crusade going into the 2002 election, Democratic obstructionism or we get things done?

DUBERSTEIN: Well, the question is how Tom Daschle plays things over the next year or so, and whether or not it is the left-wing agenda or in fact he tries to compromise. Then you'll decide which way, whether the Republicans are getting things done or the Democratics are obstructing.

BLITZER: And just to button this up, you think Tom Daschle will work with the White House?

PODESTA: I think he's already indicated that he would like to. Now the question is whether they're going to come to the center and work on those issues. And I think it can't be just working off their agenda and moderating it. He wants some moderate programs that he's interested in, too. And I don't call patients' bill of rights or a prescription drug benefit and Medicare a left-wing agenda.

DUBERSTEIN: Nor has George W. Bush identified it that way. He is very much in favor of a patients' bill of rights.

BLITZER: We're going to leave it there. Right wing, left wing, we don't talk about that.

(LAUGHTER)

John Podesta, Ken Duberstein, David Gergen, always a pleasure to have you on the program.

And just ahead, Senator Jeffords stole the spotlight from the Republican tax cut victory this week. What's ahead for the now independent senator, and why did the White House under estimate him? We'll go 'round the table with Roberts, Page and Caldwell when LATE EDITION returns.

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

STEVE ROBERTS, CNN COMMENTATOR: ... strengthened the Democrat's ability to oppose President Bush. It has not significantly strengthened the Democrats' ability to get through their own agenda. There's still a Republican House. There's still a veto in the White House. There's still a filibuster rule. Any notion that Democrats are somehow going to get through their agenda is totally wrong, but it is significant.

BLITZER: On that point though, Chris, you heard John Podesta suggest that perhaps the White House now is going to have to work more closely with Senator Kennedy and Senator Edwards of North Carolina and John McCain on their version of the patients' bill of rights.

CHRISTOPHER CALDWELL, CNN COMMENTATOR: That may be true for the patients' bill of rights, and that's certainly their instinct.

In general, the White House should be careful of this rush to moderation. If you look at what happened the last couple of days, on the tax bill, George Bush held his ground and he got pretty much the tax bill that he wanted. With some accounting tricks, you get a big tax cut.

On education, he worked with Ted Kennedy, sent Democratic lobbyist Sandy Kress out to lobby Democrats and got his head handed to him. I don't think moderation is always the way to go.

BLITZER: The Wall Street Journal editorial page, never a great friend of the Democrats, to put it mildly, said this about James Jeffords' decision earlier this week to bolt from the Republican Party: "Not everyone gets to wake up one morning and decide an inner voice has told him to overturn the results of a national election, an unprecedented legal struggle and a decisive supreme court decision to form a government. Senator James Jeffords, Godspeed."

(LAUGHTER)

SUSAN PAGE, CNN COMMENTATOR: So the good riddance theory of politics, which is a tough stance if you want to be majority party -- because the fact is, a majority party, whether it's that Republican Party or Democratic Party, has people with lots of different viewpoints.

And if you have a majority party on the Republican side, you're going to need moderate Republicans from the Northeast. You can't build a national majority party with only conservatives and only people from the Sunbelt in the mountain West. And that may be the fundamental lesson for the White House and for the GOP out of Jeffords' decision.

ROBERTS: That's a very important point, and the importance of it can be illustrated by when the Democrats made that mistake. You know, the Democrats fantasized for 20 years that this was a liberal country, and they nominated four liberals for president. And every one -- all honorable people -- all of them losers. And the fact is, they couldn't do without the South. They couldn't do without conservatives. They couldn't do without the moderate middle. They could not elect a liberal president.

And I think the Republicans can make the same mistake in reverse. If they listen to the Wall Street Journal editorial page, and maybe even listen to the Weekly Standard, and say, "This is a conservative country and we can govern with only conservatives..."

CALDWELL: Well, they seem inclined to. I mean, if you listen to Larry Craig, he says there is a great thing about being in a minority which is that you can consolidate ideologically. James Inhofe of Oklahoma is saying the same thing.

I think that you might have a harder core of conservative senators who might succeed in driving out the other moderates.

PAGE: Well, then you have an ideologically purer party, which is an easier thing to do, but you don't have a party that will hold the Senate, for instance, and you don't have a party that can win the White House.

The Republicans were on an incredible high when this year began, because they held all three -- the House, the Senate and the White House -- but it hasn't lasted. And even though Jeffords, in some ways a peculiar, quirky individual decision, there may be larger lesson here, as you say, Steve, for both parties.

ROBERTS: There's a much larger trend at work here, too. Because people forget there are four Republican senators sitting today who started life as Democrats, who were elected as Democrats. Trent Lott, Republican leader, first job in Washington: aide to a Democratic House member from the state of Mississippi.

The Democrats have lost the conservatives from the South. The Republicans, as Jeffords illustrates, losing the moderates from the Northeast. A very dangerous trend in this country: We have a polarization, a liberal Democratic Party, a conservative Republican Party. I don't think this is healthy because it makes it much harder for the moderates and...

BLITZER: On that point, though, how do you explain the fact, Christopher Caldwell, that, if the Democrats have lost the South, there's a Democratic governor in South Carolina, in North Carolina, in Georgia, I believe in Alabama?

CALDWELL: Mississippi.

BLITZER: What's going on? The Democrats seem to be taking over most of the governorships in the South.

CALDWELL: Right. Alabama is a special case, because you have a very powerful trial bar, and Fob James (ph) was able to use them to get into power.

But the other southern states, they have become suburbanized. You know, there was a Texas Republican operative who said that, even in a state that George Bush won so overwhelmingly as governor, eventually this state is going to turn into California with suburbanization and immigration. So those big southern states are risks to go Democratic, too.

PAGE: I think there's a different lesson. I think the lesson is, even as the parties become more polarized, voters have become less partisan. Voters don't care whether you're a Republican or Democrat in many places. Voters in Vermont, I don't think there has been outcry that Jeffords ran as Republican and now being independent.

So, even as voters have become kind of disenchanted with both parties -- more likely to identify themselves as independents, more likely to vote for people on either side of the ballot when they're voting -- the parties have gone the other direction. BLITZER: All right, we're going to take a quick break. More of our roundtable when LATE EDITION returns. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our roundtable.

Steve, pretty soon every American taxpayer will receive a $300 rebate, married couples $600. Are they going to get that check and go to the bank and cash it and say, "Thank you, George W. Bush"?

ROBERTS: Yes, I think they will. And I think that by any fair calculation you have to say this is a big victory for George Bush. Less than he wanted, had to make some adjustments. In this business, you get 80 percent of what you want. That has got to count as a big victory, and I think people underestimated his ability to focus and stay disciplined and hammer at the issue.

However, I think in the long run, it's going to come back to haunt him, because he has committed so much of the surplus to this tax cut. The money is not there for his missile defense shield, the money is not there for privatizing Social Security, the money is not there for prescription drug benefits. He is going to be faced with a choice, either bigger deficits, as under Reagan, or not enough money for his domestic and foreign priorities. I think this is going to turn out to be a pyric (ph) victory.

BLITZER: And everything from now on, now that the economic plan, the tax cut, has gone forward, if the economy should head South, the public could legitimately say, "Well, maybe George W. Bush is responsible for that."

CALDWELL: Right. The projections will change. But one thing that is on Bush's side in this is that the lower-income tax cuts get phased in a little bit quicker than the upper-income ones, like the estate tax. So he will have built a certain constituency for this tax cut, should the situation change and the rest of the tax cut need to be put on hold.

BLITZER: What about the political fall-out from this tax cut in the mid-term elections in 2002?

PAGE: Well, I think it's nice to get a check, and I now I spent my tax refunds several times already -- haven't even received it yet.

(LAUGHTER)

PAGE: But I think this is not only something that people will like, I think it seems appropriate to a lot of taxpayers when there's a surplus to get some of it back. If it helps to keep the economy going a little stronger at a time when it seems weak, that's to Bush's credit. And I think actually this was his number-one agenda item, personally. I think it was the thing he most wanted to have happen. So you have to chalk that up as a victory.

BLITZER: In the final days of the Clinton presidency, there were a lot of stories about how the White House staff trashed the General Accounting Office. The General Accounting Office put out a report this week saying there was very little, if any, trashing that actually went on.

Jake Siewert, writing in today's Washington Post, the former Clinton press secretary, wrote this: "A sensational story based on little more than rumor and innuendo is rewarded with prominent placement and blaring headlines. The follow-up based on a careful review of the facts gets chopped up and squeezed in to make room for the daily cellular telephone ads."

ROBERTS: So much for another -- you know, the liberal press, you know always coddling Democrats. It turns out that a lot of Democrats upset with press coverage because they think the press has been too easy on Bush.

But this does point out something else about the shift in the Congress in an interesting way. One of the powers the Democrats are going to have now is the power of investigation, the power of oversight. And they're the ones who are going to be able to hold hearings. If something like this or other issues that turn up in the Bush White House, very important potential power for them.

BLITZER: Weekly Standard, how are they handling this GAO report?

CALDWELL: I have not -- the GAO reporting to us?

(LAUGHTER)

I don't know about the magazine, but I sat on this very set on reliable sources with Joshua Micah Marshall of the American Prospect, who is the first journalist to say this is a lot of hooey. And I said, "Well, there probably is something to it." It turns out I was wrong, and the Bush administration just played us all like a drum.

(LAUGHTER)

PAGE: You know, it goes to the point that a lot of the weaknesses of the press aren't liberal or conservative. They're just sort of endemic to the press. You know, we like conflict over resolution, and we like easy stories over complicated ones. And when we make mistakes, often it's hard for us to correct them with the same fervor we pursued the original stories. That's a weakness that we ought to try to address.

BLITZER: Mission for the news media, that we make mistakes. Susan Page, Christopher Caldwell, Steve Roberts, thanks for joining us.

And up next, Bruce Morton's last word.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Back then it was more of a club. Senators socialized with each other, were friends with one another. (END VIDEO CLIP)

BLITZER: Through the years, maintaining friendships across party lines. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's last word on how the Senate has changed in more ways than one.

(BEGIN VIDEOTAPE)

MORTON: James Jeffords of Vermont isn't the first senator to switch parties, but his switch nevertheless says something about how the Senate has changed in the last 30 years or so.

Back then, it was more of a club. Senators socialized with each other, were friends with one another. Republican George Aiken of, yes, Vermont and Democratic Senate leader Mike Mansfield of Montana had breakfast together often. No agenda, they just liked each other.

Party mattered and so did philosophy, but senators could fight bitterly over an issue, have a drink together and have supper together and be allies on something else the next day.

Both parties had hawks and doves on Vietnam, and few issues were as emotional as that war. And they'd argue bitterly about the war but might vote together on a tax bill the next day.

The Democrats, for years, split on racial segregation. President Lyndon Johnson shepherded the Civil Rights Act and the Voting Rights Act into law. His closest friend and ally on other issues was Richard Russell of Georgia, who led the Senate filibusters against civil rights legislation.

The Republican Party had room for real conservatives, of course, but room for moderates like Charles Percy and Jacob Javits too.

That changed when, first, conservatives began to feel ideology, conformity to doctrine, was something to be demanded of party members and, second, senators socialized with each other less.

A few years ago, Mark Hatfield of Oregon voted wrong on a balanced budget amendment, and Rick Santorum of Pennsylvania, then a freshman, suggested stripping Hatfield of his committee chairmanship.

(BEGIN VIDEO CLIP)

SEN. MARK HATFIELD (R), OREGON: I'm Chairman Mark Hatfield.

(LAUGHTER)

(END VIDEO CLIP)

MORTON: It didn't happen, but it was a sign: Hatfield retired. Arlen Specter of Pennsylvania noted this past week, moderates have a harder time these days. Sometimes, frankly, he said, it gets pretty tough.

So the true conservative ideologues in a sense have won a battle, the same battle the Republican Party lost. Does it matter? Big doings in terms of furniture getting moved, offices reassigned, staffs growing or shrinking.

But except for the budget resolution which moves on a unique fast track, everything in the Senate can be threatened by a filibuster, which means you need 60 votes to do anything. Neither party had that before; neither will have it now.

So the Senate, the parties, will have to try to compromise, to cooperate. And it may be that the new majority leader, Tom Daschle, will be better at that than the Republican Trent Lott was.

Anyway, lots of compromise or lots of gridlock, we'll see. I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thanks, Bruce.

And now it's time for you to have the last word.

Former Attorney General Janet Reno's only Sunday interview last week on LATE EDITION generated lots of feedback.

Doris from Alabama writes this: "Janet Reno should get in her boat and paddle some other stream rather than running for the governor of Florida."

But Bonnie from California writes, "Reno is a woman of integrity, sincerity and valuable experience, which will serve Florida well."

Our discussion about Attorney General John Ashcroft's prayer sessions at the Justice Department also sparked interest.

Michelle from Pennsylvania wants to know, "Would Mr. Robertson still agree with Mr. Ashcroft's prayer sessions if he worshipped another religion -- Judaism, Islam, Buddhism, wicca?"

But Heather from Nevada says, "It is all much ado about nothing. This has been going on in many workplaces and environments forever."

As always, I invite your comments. You can e-mail me at LATEEDITION@cnn.com. And don't forget to sign up for my weekly e- mail, at cnn.com/email.

When we return, we'll reveal what's on the cover of this week's major news magazines. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Now a look at the cover of this week's major news magazines.

"TIME" says, "Bushwacked: The Senate's flip makes it a whole new ball game," on the cover.

"NEWSWEEK" tells us how Mr. Jeffords blew up Washington: "A quiet Yankee sends a loud message to the Republican right," on the cover.

And on the cover of "U.S. News and World Report": "Here come the zoomers. Baby boomers turn 55 and reach for the high life."

That's your LATE EDITION for Sunday, May 27.

Please join us again next Sunday and every Sunday at noon Eastern for the last word in Sunday talk. And if you missed any of today's show, you can tune in tonight 7:00 p.m. Eastern for a one-hour replay of LATE EDITION.

I'll see you tomorrow night on Wolf Blitzer Reports at 8 p.m. Eastern. I'll have a special Memorial Day interview with Vietnam veteran and Medal of Honor winner, former Senator Bob Kerrey.

Until then, thanks very much for watching. Enjoy the rest of your Memorial Day holiday weekend. I'm Wolf Blitzer in Washington.

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