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CNN Late Edition with Wolf Blitzer

Interview with Condoleezza Rice, Dick Armey, Christopher Dodd, Michael Bloomberg, Henry Waxman

Aired February 03, 2002 - 12:00   ET


BLITZER: It's noon in Washington; 11 a.m. in New Orleans; 9:30 p.m. in Kabul; and 10 p.m. in Karachi. Wherever you're watching from around the world, thanks for joining us for Late Edition.

We'll get to our interview with President Bush's national security adviser, Condoleezza Rice, in just a moment, but first this hour's latest developments.


BLITZER: Since the start of the U.S. military campaign in Afghanistan, some of President Bush's top advisers have argued for widening the war against terrorism to other countries.

Now the president is singling out Iraq, Iran and North Korea by name as terrorist states, and suggesting they could face severe consequences from the United States.

A short while ago, I spoke with his national security advisor, Condoleezza Rice.


BLITZER: Dr. Rice, thanks once again for joining us.


BLITZER: Appreciate it very much.

Let's get right to the most controversial part of the president's speech, when he spoke of an "axis of evil." I want to play that excerpt for our viewers.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world by seeking weapons of mass destruction. These regimes pose a grave and growing danger.

(END VIDEO CLIP) BLITZER: He lumped together Iraq, Iran and North Korea -- three very different countries, three very different challenges for the United States. Why?

RICE: Well, the president said "states like these," first of all -- and there are illustrative of a class of states that have certain characteristics -- they are repressive to their own people. They are regional threats to their neighbors. And most importantly, they have shown an aggressiveness at seeking weapons of mass destruction, which are the most dangerous weapons in the world. And that particular combination constitutes a real and clear and present threat.

BLITZER: But Iran, for example, there have been conflicting signals coming from the Iranian government, including offers of help to the United States in the war in Afghanistan.

RICE: The Iranian regime continues to support terror in the Middle East. It continues to support terror around the world. It continues to seek these weapons of mass destruction very, very aggressively. It has been a problem in trying to surreptitiously influence delicate the very delicate politics of Afghan government.

Now, Afghanistan is Iran's neighbor. And we fully expect that Afghanistan and Iran will have relations. It should be aboveboard. It should be transparent. It's true the Iranians were helpful in Bonn in trying to bring about the Afghan interim authority. But on the whole and as a regime, as a totality of the regime, Iranian behavior has not changed in many years and is devastating to peace and security around the world.

BLITZER: Was the main reason, though, that you included Iran in that because of the armed shipment that was intercepted by Israelis heading for Palestinians?

RICE: Well, we wanted to send a very strong signal to Iran and to the rest of the world that Iran is engaged in these kinds of activities, including supporting the Karine A shipment of weapons to the Palestinian Authority in violation, clear violation, of the Oslo accords, really stirring up trouble in a very delicate place like the Middle East. And that has been the Iranian way for quite a long time.

This regime deserved to be on the list, and this regime knows that it deserved to be on the list.

BLITZER: Do you have any information to suggest that Iran is harboring Al Qaeda fighters who may have escaped from Afghanistan into Iran?

RICE: Well, there are concerns about the border between Afghanistan and Iran and what might be going on there.

But I would return to the central point, which is, this is a regime that has supported and financed and trained terrorists for a number of years, particularly in the Middle East. And we're very concerned about that. BLITZER: And the notion that there are moderates within the Iranian government -- President Khatami, for example, as opposed to some of the clerical leaders. Some of the White House, including one senior administration official, told a few of us this week that there might be a good-cop, bad-cop routine, but there really are no such thing as moderates in Iran.

RICE: Well, I'm not going to try to analyze internal Iranian politics. There obviously is an elected part of the Iranian government. But the will and the desires of the Iranian people to have a more democratic, a more pluralistic form of government and to have a better life clearly is being thwarted by someone. And there are, as the president said in his speech, an unelected few who seem to be trying to do that.

The fact is, though, that the overall regime, the regime in total, is continuing to engage in behaviors that are just terribly destabilizing to many delicate parts of the world.

BLITZER: As far as Iraq is concerned, is the Bush administration preparing for a military strike against Saddam Hussein's regime?

RICE: The president has had Saddam Hussein on his radar screen since we came into office. And he's making very clear that this is a regime that has not lived up to its obligations it signed in 1991, after losing the Gulf War.

And we're looking at what means we can use with Iraq. The president's made no decisions about what that might be. But I just want to remind that we've had in place, already, a policy of trying to strengthen the sanctions regime against Iraq, focusing it more on trying to keep Saddam Hussein from getting military weapons, from trying to keep him from getting weapons of mass destruction or the means to develop them.

We have a lot of instruments at our disposal. We fly no-fly zones to keep his military in check.

And we are interested in and determined to support opposition to him, because the Iraqi people deserve a regime that is better than the one that they have.

BLITZER: I interviewed the recently retired chief of Saudi intelligence, Prince Turki, Friday night. He said he's been trying to get the United States to change the regime in Iraq for some time, unsuccessfully. Listen to what he said.


PRINCE TURKI AL-FAISAL, FORMER SAUDI CHIEF OF INTELLIGENCE: We are always proposing covert action programs against Saddam Hussein and presenting ideas on that. And we continue to talk to United States, during my stay at the intelligence service for those years, but there was never really any definitive action taken by the United States in response to our specific proposals.


BLITZER: Why is that?

RICE: Well, what you see there is the former Saudi chief of intelligence telling you what people in the region may think of this man. They know he's a threat. They know he's a danger and that, as long as that regime is in power there, it's going to be a threat.

But the means by which we deal with the Iraqi regime, I think, still have to be developed. They have to be developed in consultation with our friends in the Gulf like the Saudis. But this president is resolute in his determination not to allow the Iraqis to continue to flaunt the obligations that they undertook in 1991.

BLITZER: The bottom line, this president's determined to get rid of Saddam Hussein's regime one way or another.

RICE: This president is determined to deal with a multiplicity of threats, and he outlined those. We have different means by which to do it, and we will see what means are most appropriate in the case of Iraq. But Iraq is a threat, and someone has to say that forthrightly and to try deal with it.

We have, by the way, with our allies and with the U.N. Permanent Five, a chance to change the sanctions regime, that may help also, in dealing with the Iraqi threat, but we've got to get about the business of doing this.

BLITZER: You probably noticed that some commentators suggested you included North Korea in the axis of evil so that there would be at least one non-Muslim country in that axis. Is that why North Korea was included?

RICE: No, North Korea was included because, of all the states in that list and any other list, it is the most aggressive in spreading ballistic missile technology around the world. It is the chief merchant. It's the place that you go if you want to buy ballistic missile technology, and that's why North Korea is in that list.

BLITZER: And all of the cooperation that we've seen in recent years, in terms of its own nuclear program, agreeing to some sort of controls that the Clinton administration had suggested, you don't think that that sends a positive signal?

RICE: There is still an open offer to the North Korean regime to begin to go down an agenda that would improve peace and stability on the Korean peninsula, to talk about the indigenous nuclear program in North Korea, to talk about the indigenous missile program, to talk about missile technology sales.

But the fact of the matter is, there was not a very articulated regime for verifying what the North Koreans are and are not doing.

RICE: And what this administration said is that this is not a regime that you can trust. We would have to have significant verification that would give us some confidence that they were living up to their obligations.

This is, after all, a regime that several years ago re-engaged in terrorism against the south. This is a regime that starves its own people so that it can do these things.

We don't believe that there has ever been yet with the North Korean regime a verifiable way to make certain that they're living up to commitments that they might undertake. But we are ready to talk about it.

BLITZER: President Bush, in his State of the Union address, was very, very forceful in warning the American public of terrorist threats still out there. Here is a quick excerpt. Listen to this.


BUSH: Most of the 19 men who hijacked planes on September 11 were trained in Afghanistan's camps, and so were tens of thousands of others. Thousands of dangerous killers schooled in the methods of murder, often supported by outlaw regimes, are now spread throughout the world like ticking timebombs set to go off without warning.


BLITZER: Tens of thousands of terrorists still out there. Karen Hughes, that morning, said a 100,000, perhaps in 60 countries. That sounds as if, since probably only a few hundred are accounted for, that the problem facing the United States today may be much more serious than any of us imagined.

RICE: Well, this is the total universe of people trained in Afghanistan camps, and it is true that we've got a long road ahead of us to break this up.

We don't have to do it one terrorist at a time, of course. When you begin to break the network, you try break up its communications. You try to break up its ability to train.

And we've done some of that by the actions that we've taken in Afghanistan. It's much tougher to be an Al Qaeda terrorist now without a place to train, without ease of communications in the way that the Taliban-led Afghan government gave its territory to be used. It's also the case that we are making progress in other countries, because there's now a bright light of intelligence focus, of law enforcement focus, on these cells and where they might be operating.

So we're making progress, and you don't have to do it one at a time. You want to break up the network and take away its ability to communicate, take away its ability to finance itself.

But there's no doubt that, in the years that Osama bin Laden was using Afghanistan's territory, he trained a lot of people, and they are in a lot of countries around the world.

BLITZER: So how much should the American public be concerned about nuclear power plants, water plants, landmark facilities such as the Space Needle in Seattle, things that the president mentioned specifically, diagrams and information that was found in the rubble of Afghanistan?

RICE: The president wanted to let the American people know that we now know more about the plans that were in store, or potentially in store for the United States, and to warn that we are all need to be vigilant.

Just what happened on that airplane in which a flight attendant saw someone doing something suspicious and the passengers and the flight attendants subdued that person, we now know that this was a plot to bring down the airplane.

So, vigilance is really extremely important in this, but so are the efforts that are being made to so-called harden the country. If you look at the efforts that we're making with nuclear power plants in cities around the country so that law enforcement officials, working with the FBI and others, are themselves very aware of these threats, I think we're making some progress.

BLITZER: As you know, at CNN this past week we aired that Al- Jazeera television interview with Osama bin Laden that previously had never been aired at the end of October. That interview took place somewhere in Afghanistan.

But why didn't the president specifically mention Osama bin Laden's name in the State of the Union address?

RICE: You go back to the speech on the 20th of September, the president only mentioned Osama bin Laden one time in that speech.

Because we are continually sending the message that, while we are determined to hunt him down -- he's on the run -- while we're determined to get him and the others who perpetrated these attacks, this is a network. And the important thing is to disable this network, to disable it in its ability to do the things that it wants to do.

RICE: We want to bring to justice those who are responsible for the lives that were lost on September 11, that were lost with the Cole, that were lost at the embassy bombings and the World Trade Center before. This is a long list. We want to bring them to justice.

But we want also to remind people that the focus is on disruption of the terrorist networks that still exist, and that is one reason for the way that the president went about this in the State of the Union.

BLITZER: Is Osama bin Laden still alive?

RICE: We have no reason to believe that he's dead. We don't know if he is or not, but we're going to continue to pursue him and others who need to be brought to justice.

BLITZER: And you don't know where he is, if he's still in Afghanistan or may have fled? RICE: No, we have no new information.

BLITZER: Doesn't that shock you, though, that the United States, with all of the vast intelligence capabilities that it has, doesn't have a clue where Osama bin Laden is?

RICE: Well, look, it's not an easy place to fins somebody, and if somebody wants not to be found it's particularly hard.

But I would just remind everyone that we arrested a terrorist this year who was responsible for American deaths more than 12 years ago. This country is not going to forget. This country is not going to relent. And one way or another, these people will be brought to justice, even -- as the president said, all of this is not going to be completed on our watch. But eventually, these people will be brought to justice.

The good thing is that bin Laden and his lieutenants and Mullah Omar and his lieutenants are no longer sitting in Afghanistan, training terrorists, plotting against the United States. They are on the run.


BLITZER: We have to take a break, but we'll have much more of my interview with President Bush's national security advisor, Condoleezza Rice, when Late Edition returns. I'll ask her, who in the U.S. government, if anyone, should be held accountable for the September 11 intelligence failure? We'll also talk about the fate of the Wall Street Journal reporter Daniel Pearl.

Stay with us.


BLITZER: Welcome back to Late Edition. Now back to my conversation with President Bush's national security advisor, Condoleezza Rice.


BLITZER: As you know, many members of the House and Senate Intelligence Committees want to begin hearings on what went wrong, the intelligence, law enforcement failure before September 11. They want someone held accountable for that failure. The report suggesting the White House wants them to hold back right now.

Has anybody been held accountable yet for the September 11 terrorist attacks?

RICE: The president and his team is very focused on trying to prevent the next attack. And I think American people would understand that priority.

What we want to do is to, both in what we are trying to do abroad in routing out terrorism at its source, and what we are trying to do in the United States, in terms of hardening the country and bringing our security measures up to speed and working to rout out these cells, cutting off the finance, law enforcement, intelligence, that has got to be the focus. And I think that is where the American people want the focus.

BLITZER: So you want you want to delay in the hearings?

RICE: No, obviously, there is going to come a time -- and it may -- the Congress will certainly have its own clock on this -- come a time to look at what happened, to try to assess what happened and, most importantly, to learn the lessons from September 11 so that we can do better in future.

But everyone would agree that this is the kind of attack that no one saw coming. It was so outside the box. It was so different than what was imagined. We want to understand that better. But the president is very focused right now on trying to prevent a further attack.

BLITZER: So you don't want the hearings to take place right now? You'd like to see them delayed a little bit? RICE: Well, look we're -- we will be happy to discuss with the Congress, and particularly with the intelligence committee that have responsibility for oversight, how best to go about this, but how best go about it in a way that does not distract attention of the very people who have to carry out this war.

BLITZER: What can you tell our viewers here in the United States around the world about Daniel Pearl, the kidnapped Wall Street Journal reporter?

RICE: Well, unfortunately, there isn't any further information. The United States government is saying very clearly he ought to be released and he ought to be released now, unconditionally. Because this is a very difficult and sad situation for this country, and obviously for the family of Daniel Pearl, but for this country in general.

The Pakistani government has been very good and has been aggressive in pursuing the case. We have tried to cooperate with them in anyway that we can. But I'm unfortunately have in new information about him.

BLITZER: No information right now. We are all watching that, obviously, with high interest.

RICE: Yes.

BLITZER: You saw the article that Yasser Arafat, the Palestinian Authority president, had in the New York Times today, in which he condemned terrorism against Israeli civilians.

Is that is enough for you to now invite Yasser Arafat to meet, for example, with President Bush?

RICE: It is a good thing to condemn terrorism. It's an even more important thing to do something about it.

And our concern with Chairman Arafat has been that he has not made 100 percent effort to rout out the terrorist groups around him, to disable Hamas and Hezbollah operating in the Palestinian territories. He has tens of thousands of forces that are capable of doing this. And he really needs to get about doing something about it, not just talking about it.

Now, we are very concerned about the plight of the Palestinian people. We are very concerned that they have to go through daily trials and tribulations, that they are economic life has been constrained. And we talk all the time to Israelis about what can be done to make the Palestinian people's lives better on a day-to-day basis.

But what will ultimately make the Palestinian people's lives better, what will ultimately give them the chance of their national aspirations for a state, as President Bush said in the United Nations General Assembly speech, is to get the peace process moving again. And right now, Chairman Arafat holds the key to that. BLITZER: The prime minister of Israel, Ariel Sharon, is coming to Washington this week, will be meeting with President Bush, I believe. on Thursday.

He told the Israeli newspaper Ma'ariv this, and I want to put it up on the screen: "There was an agreement in Lebanon not to kill Yasser Arafat. Actually, I am sorry that we did not kill him. If Arafat takes all the steps we are demanding he take, as far as I am concerned, he will again be a partner to negotiation."

He is referring to the early 1980s when the Israelis forced the PLO out of Lebanon.

BLITZER: What do you make of this kind of comment from the Israeli prime minister?

RICE: I'm not going to comment on everything the Israeli prime minister says.

I do think that the ending to that sentence, though, is very important, which that is he says that, if Arafat can do the things that he needs to do, he believes that there can be negotiation going forward. And that's what we have to keep both sides focused on.

There's a lot of history here, there's a lot of history on both sides. I think rehearsing the history isn't really helpful. What would be helpful is to move forward on the steps that need to be taken.

And right now we are trying to be consistent, the U.S. government is trying to be consistent. We're asking no more of Chairman Arafat than we've asked of every other responsible leader in the world. And that's to rout out terrorism, to recognize that terrorism is not a legitimate weapon in any arsenal for any cause, no matter how good, and to thereby get back into a process that probably will lead to a resolution for the genuine aspirations of the Palestinian people. BLITZER: Dr. Rice, we have to leave it right there, but today being the Super Bowl here in the United States, a lot of speculation that one day, when you leave government, you'd like to be the commissioner of the NFL.

RICE: That's true. That's not speculation. That's fact.

BLITZER: So you want to tell us who's going to win the Super Bowl?

RICE: Well, shouldn't I be reserved if I'd like to eventually be commissioner?

Let me just say this. If New England can stay in the game until the fourth quarter, I think they've got a very good chance to win this game.

BLITZER: All right. I'm with you.

Dr. Rice, thank you very much.

RICE: Thank you.


BLITZER: She's beginning to sound like an NFL commissioner already.

And just ahead, the state of America's wartime economy.


BUSH: Now Americans deserve to have this same spirit directed toward addressing problems here at home.


BLITZER: Like the war against terrorism, President Bush is promising a victory over the economic recession, but can he get Congress behind his plan to jump-start the U.S. economy?

We'll ask the House majority leader, Dick Armey, and Democratic Senator Christopher Dodd when Late Edition returns.



U.S. REPRESENTATIVE RICHARD GEPHARDT (D-MO), HOUSE MINORITY LEADER: I refuse to accept that, while we stand shoulder to shoulder on the war, we should stand toe to toe on the economy.


BLITZER: House Democratic leader Richard Gephardt delivering his party's response to the president's State of the Union address earlier this week.

Welcome back to Late Edition.

Joining us from New Orleans, where he will be attending the Super Bowl later today, is the U.S. House of Representatives' majority leader, Dick Armey of Texas; and here in Washington, the Democratic Senator Christopher Dodd of Connecticut. He's the chairman of the Senate Rules Committee, also a member of the Foreign Relations Committee.

Gentlemen, welcome to Late Edition.

We'll get to the Super Bowl later, but I want to talk to you, Christopher Dodd, first of all, what president said about beating recession. A big chunk of speech, of course, dealt with economy, also defending a large increase in defense spending. Listen to one excerpt.

Basically what he said is, "My budget includes the largest increase in defense spending in two decades, because, while the price of freedom and security is high, it is never too high. Whatever it costs to defend our country, we will pay it."

Twelve or 13 or 14 percent increase, some extra $40 billion. Will the Democrats support the president on this increased defense spending?

REP. CHRISTOPHER DODD (D), CONNECTICUT: Well, I can't speak for all of Democrats, but my guess is that this the president will get pretty much what he wants in this area.

There's a strong sense -- and you just heard Dick Gephardt articulate it -- of rallying behind the country, rallying behind president since September 11.

So my answer to it would be yes, without obviously seeing how money gets spent, where it's going to go.

And then the important question, which the president raised, we're willing to pay for it, and we've got to pay for these things. And that's really where the rubber will hit the road, not so much on the defense spending itseld, but how we're going to pay for that and do the other things the president wants to do, and still keep our economy strong. And there is where the debate will be.

BLITZER: Well, how do you do that, Congressman Armey? How do you pay for all that increased defense spending at a time when tax revenues are going down and the budget deficit is going up?

REP. DICK ARMEY (R), TEXAS: Well, obviously, the first, most important thing to do in terms of funding the government, as well as restoring jobs and opportunity for American workers, is to get a stimulation to this economy.

We have been trying in the House -- in fact, twice have sent an economic stimulus package to the Senate, and at this point, so far the Senate hasn't produceed a package.

But insofar as we can make this economy grow, we will put people back to work, we will bring in the revenues that will fund our priorities for defending freedom across the globe and indeed allow us to restore our surplus.

BLITZER: Well, why won't the Senate follow the president's lead on this front, and go ahead and pass the economic stimulus package that Congressman Armey is suggesting he should do?

DODD: Well, we're following -- Alan Greenspan laid out what he thought a stimulus package ought to have as its principles, that it ought to be short-lived and targeted. What the president and what Dick Armey and others are advocating is anything but targeted and short-lived.

Tom Daschle has done a great job in putting together a package that is responsible and prudent. But coming back after the holiday recess, he said, "Look, let's put aside our differences. Let's take what we both agree to, Republicans and Democrats in the Senate, let's pass that, send it up to conference in the House, let them work on it and come back to us with a final product."

The Republicans in the Senate have rejected that, and there have been over 70 amendments offered, the bulk of them by Republicans. Why can't we get together at least on those points, then send it and bring it back, and then a final...

BLITZER: What about...

DODD: We could have done that two weeks ago.

ARMEY: Well, let me just say very quickly that, very quickly, that there is nothing in the Daschle package that was recommended as economic stimulus by Alan Greenspan. I sat in the meetings with Alan, and that is simply not a good stimulus package.

Furthermore, all that the distinguished Senate majority leader offered was what Republicans have agreed to by way of Democrat proposals to try to bring the Democrats to table. Thus far, the Democrats in the leadership of the House or the Senate have not been willing to agree to one clear economic stimulus component brought to table by the Republicans.

So we've got to get beyond the Democrat notion that compromise means me getting what I want and having to give up nothing to what the Republicans want.

DODD: Well, that's just -- that's not the case at all.

Really, the Republicans, unfortunately, have been very reluctant about talking about unemployment benefits which are critical.

ARMEY: Oh, that's not true.

DODD: We've got a 40 percent increase in unemployment. ARMEY: (OFF-MIKE)

DODD: Dick, let me answer.

ARMEY: We've got $20 billion worth of...

DODD: Dick, let me answer. Believe me, this is -- 40 percent increase in the last year alone.

More than 8 million Americans are out of work today. We think that's a major piece of stimulus. You get money to those people, they'll spend it, they have to. That will do a lot.

DODD: There are many of us who question whether or not we really need to have a major stimulus package. Many people think we're coming out of this recession.

But why not take the compromise position? Let that come out of the Senate. Let both the House and Senate conferees, as they do this, work on a final product and send it back.

BLITZER: Let me just let...

DODD: I don't understand why you don't do that. We could have done that two weeks ago to get out of this problem.

ARMEY: If you can show one portion of one percentage of one- tenth of a bit of economic growth in the proposals -- Tom Daschle's put a lot of spending proposals on the table, but he's put nothing on the table that would actually encourage growth to the economy.

DODD: No, no. Dick, you're not listening to me.

ARMEY: The fact is, Tom Daschle has missed the point.

No, you're not listening to me. This is about economic growth, stimulating growth in the economy, creating jobs, not expanding the size of government. And that's where the argument lies.

DODD: No, no, it's not.

ARMEY: Democrats have just simply not understood what the American people need.

DODD: Dick, listen. All we're talking about is, how do we get a package out of here? We've had gridlock in the Senate because there are conflicting ideas here.

Tom Daschle has said let's compromise, take the positions we agree on, pass that in the Senate, then you in the House can sit down with the conferees and work on it.

Your point at the outset was, why don't you deal with this? We've offered a means of doing it. Your Republican friends have offered 70 amendments to that idea, which creates further gridlock, which means it doesn't get done. And that's a simple process. BLITZER: Let me just interrupt for a second. Congressman Armey, the president does support increasing benefits for the unemployed and he does support an additional tax credit or tax benefit for those who didn't get it last year, the $500 tax incentive. So those are two issues that could...

ARMEY: That's right. And, Wolf...

BLITZER: Well, I was going to say, those are two issues that could sail through right away, right?

ARMEY: If you look at that, both of those provisions were in the House-passed package twice that we sent over there.

The problem has not been that the House Republicans have not been willing, as the president has been, to give Tom Daschle and Democrats their priorities on unemployment compensation and on health benefits. That's already been passed by the House, sent over there.

The problem is the Democrats will not accept the House provisions that create economic growth, like accelerated depreciation, capital gains tax reduction and reduction in the marginal rates. That's where the problem is.

It's that very fundamental proposition that the Democrats have that, we do the taking, you give the giving, we give nothing, and we call it a compromise.

BLITZER: Well, I think that's a fair point. I want to ask Senator Dodd, specifically on the tax cut proposals, one of the key points in the president's State of the Union address involved tax cuts. Listen to precisely what he said.


BUSH: For the sake of long-term growth and to help Americans plan for the future, let's make these tax cuts permanent.


BLITZER: All right, as you know, the president's tax cuts were approved by Congress last year, but -- for what? -- 10 years.

DODD: Ten years.

BLITZER: Why not make them permanent so that people can have long-term planning?

DODD: Well, first of all, I don't think you want to get into -- I don't want to see this go back. I disagreed with the tax cut of last spring.

According to the Congressional Budget Office and others, we're now watching the evaporation, which the president didn't talk about -- watching the $5.6 trillion estimated surplus evaporate in one year. This administration was given a gift unlike any other administration almost in memory, and that is a huge surplus, lowering interest rates and really improving the economy for the decades to come.

And in that last year, we've watched that surplus evaporate. A lot of it has to do, obviously, with September 11, the recession. But according to estimates, 40 percent of that reduction in the surplus over the next 10 years was over that tax cut.

Now, I'm not going to say -- that's been done. That debate is over with, in my view. I think it would be a mistake to make it permanent because we're talking tax cuts in the eighth, ninth or tenth year. And it seems to me we ought to wait and see whether or not you really want to do that much.

But that's not the debate at this point, in my view. So I disagree with making them permanent, but I don't necessarily go back and see us revisit the debate of last spring. That's behind us. You're not going to change that.

BLITZER: What about that, Congressman Armey, the argument that the deficits are increasing? In fact, the president acknowledged that in the speech himself. Listen to this very brief excerpt.


BUSH: Our budget will run a deficit that will be small and short-term, so long as Congress restrains spending and acts in a fiscally responsible manner.

(END VIDEO CLIP) BLITZER: How important is it to the Republican leadership that these deficits turn into surpluses sooner rather than later?

ARMEY: It's important to the country that we do it sooner than later.

We've got some very big public policy objectives, like retirement security for all Americans, that affect generations of Americans that we've got to get back to. And we need to get back to surpluses so we can attend to those.

ARMEY: And the way you do that is recognize that 90 percent of the change from surplus to deficit came from, first, the recession, then, of course, the spending that followed September the 11th.

We need to complete what we need to do on spending that secures the freedom and safety of this nation and the world. And then we need to get the economy growing, and we'll get back to surpluses.

And the bottom line is that, if the economy prospers, the federal government will prosper. If the economy stays in recession, it will of course affect our revenues to the government. The key is, get people back to work and America will prosper.

DODD: Well, I'd -- that's obvious, we agree on the goals here. The question is whether or not this formulation is likely to do it.

And it seems me, when you're talking about the possibility of interest rates going up, with $106 billion deficit projected for this year -- smaller deficits are projected for next couple of years, but then obviously, losing $4 trillion dollars in surplus over the next 10 years, based on estimates, we could be -- this is a -- you're rolling the dice here a bit on this.

ARMEY: But that doesn't have to happen.

DODD: The two things occur...

ARMEY: That doesn't have to happen.

DODD: It doesn't have to happen, Dick. But you're playing a very risky game here with that future. One is, you're going to end up with interest rates, car payments, home payments, loan payments going up. An interest increase is a huge tax on the average family.

And secondly, dipping into the Social Security trust fund and the Medicare trust fund. We had agreed to put Social Security first and to leave the next generation in solid shape on Social Security. Now we are raiding those funds in order to pay for these deficits.

BLITZER: Very briefly, because we're going to take a quick break, Congressman Armey, go ahead.

ARMEY: Well, very quickly. Economic growth comes from trade expansion: held up in the Senate. A good sound American energy policy: held up in the Senate. Tax expansion to the economy: held up in the Senate. Our problem, Mr. and Mrs. America, is the Senate is stuck in neutral. They can't get off the dime. And that's because they don't have good leadership in the Senate. It's as simple as that.

BLITZER: All right. You were very brief, thank you for that.


We're going to take a quick break. A lot more to talk about with Senator Dodd and the House majority leader, Dick Armey. They'll also be taking some of your phone calls. Late Edition will be right back.


BLITZER: Welcome back to Late Edition. We're talking with two key members of the U.S. Congress, the House Republican leader Dick Armey of Texas, and the Democratic Senator Christopher Dodd of Connecticut.

Congressman Armey, on this whole flap, this issue between the General Accounting Office, the investigatory arm of Congress, and Dick Cheney, the vice president, over documents that they want from his energy task force, people that came and met with the people putting those recommendations together; he's refusing to do so. They're threatening to sue the White House right now, an unprecedented lawsuit.

It suggests to some, as you well know, that the vice president and the White House may have something to hide. Do you think they do?

ARMEY: No, not at all.

And frankly, I feel bad for the General Accounting Office. You know, Henry Waxman is the guy that's pushing these guys out onto ground they can't stand on.

The White House is correct. They must protect their ability to have meetings in the White House. They were not taking the Fifth Amendment, which is what GAO says: "Just take the Fifth or take executive immunity," and the White House says, "No, we're not going to do that, it doesn't apply here, and it's not necessary."

Henry Waxman is pushing these people out to a place where eventually they will end up, and they will get in the courts. GAO will lose, the White House will be vindicated. And Henry Waxman will have what he should have, egg all over his face.

BLITZER: Henry Waxman will be on this program, Senator Dodd, later. But what about this dispute between the GAO and White House?

DODD: Well, first of all, the head of the GAO is a former employee of Ronald Reagan, I think, and George Bush 41, Mr. Walker. So he's hardly someone who's out to get this administration.

Secondly, I don't think they're being pushed out the door. And you're right, it is unprecedented. And they had don't like having to do it. The only information being requested here are the attendees, the names of the attendees, the dates they were there, and the topics that were discussed, nothing more. So the idea that you're going to go and have detailed information of discussions held in the White House is untrue.

Look, the bottom line is, they're going to do it. They may not like it, and it's painful to watch, but, at the end of the day, I believe that Dick Cheney is going to turn over this material.

My advice would be -- and I'm sure they'll jump at this -- would be to do it sooner rather than later, because you're going to do it ultimately. And day after day you're going to be asked to do it; ultimately you will. My advice is, do it now, get the information out. If there's nothing to hide, then you have nothing to worry about. And the dates, names of people who were there and the topics discussed do not reveal details.

BLITZER: But, Senator Dodd, the vice president and the president say they have a right to unvarnished advice, and this will not only affect them but future presidents down the road and their ability to ask people for some honest advice.

DODD: Well, I wish they had used the same principles when they talked about the dump they did of the e-mails of the Clinton administration. You can't have it both ways in this crowd. You can't dump out every e-mail you could get on Bill Clinton and then turn around and say you want executive privilege when it comes to the names of attendees and dates... BLITZER: All right. What about the supposed double standard, Congressman Armey?

DODD: It's unbelievable.

ARMEY: No, not a double standard. We were concerned, I'm sure that the senator's referring to Hillary's health commission, which was of course millions of taxpayers' dollars to fund a commission put together by a private citizen, not an officeholder, and indeed where they would not give us any information about the costs, what they spent it on, who was involved. It's two wholly different things.

And again, it's going to be embarrassing, when it comes clear, that you cannot compare what was done by the Hillary Clinton health commission with what is done by the vice president of the United States in the official function of his duties.

DODD: Dick, you tell that to the thousand employees of Enron...

ARMEY: You know, this government is not in the practice of funding a task force headed by private citizens.

DODD: Well, you tell that to the thousands of employees at Enron who've lost their pensions and lost their retirements, and they'd like to know what happened there.

ARMEY: Yes. You've got to -- are you telling me that these meetings held in the White House had something to do with Enron?

DODD: I don't know.

ARMEY: This is the kind of stretch that just kind of burdens the American people with their inability to keep up with your imagination.

DODD: Well, that's what people are wondering about.

ARMEY: If you want to go on a fishing expedition, at least put on the right kind of bait and fish in the right waters. But you cannot fish for saltwater fish in fresh water. You're way out of line on this.

DODD: That Mississippi River's right behind you there.


That's murky, muddy water I think you're getting into, Richard.


BLITZER: Gentlemen, unfortunately we're going to leave it right there.

DODD: Let me tell you one thing.

BLITZER: Yes, go ahead. DODD: Just one thing. You know, listen, this guy here, this Dick Armey, he's leaving Congress, and I know people don't always understand this. I'm going to miss him up here.

And you've done a hell of a job representing your constituency. And I love the passion of your views, and I wanted to tell you that. We may not do a show again before you depart next fall, Dick, so congratulations to you on a good career.

ARMEY: Well, thanks...

BLITZER: Congressman Armey, we second that, but do you want to ask Senator Dodd if he's thinking about running for president?


ARMEY: Are you, Senator?

BLITZER: Speaking of a second career.

DODD: Yes, fine, Dick. It's nice to see you again.


ARMEY: Oh, I don't watch it -- Chris, I don't want you to run, Chris, because I'm tired of voting no all the time.

(LAUGHTER) BLITZER: All right. Gentlemen, thank you very much.

Good luck watching the Super Bowl. I know you're rooting for different teams. We'll be watching the game as well.

And when we return, we'll go to New York City. As you can see, we have a live picture coming up from Ground Zero. That's what it looks like right now. Recovery efforts are still under way.

But how is New York faring nearly five months after the terrorist attacks? We'll talk with the new mayor of New York, Michael Bloomberg, about the state of his city, when Late Edition returns.



BLOOMBERG: At the start of my administration, I am pleased to report to you that the state of the city is strong.



BLITZER: New York City's new mayor, Michael Bloomberg, giving the State of the City address this past week.

Welcome back to Late Edition. Joining us now from New York is the mayor, Michael Bloomberg.

Mr. Mayor, good to have you on this program. Congratulations to you.

You know, of course, that you are filling some big shoes. How do you go about doing that?

BLOOMBERG: Well, you just do the best you can. I did have a great predecessor. He did a lot for the city, not just last three months of his administration, but over all eight years.

But he had different problems to face than I'm going to face, and he has given me some good advice. Hopefully, I'll take what he's built and make it even stronger and better.

BLITZER: He was Time magazine's Person of the Year...

BLOOMBERG: And deserved it.

BLITZER: ... as you well know, since -- given his decisions and the way he operated after -- in the immediate aftermath of September 11. But it does put an enormous amount of pressure on you, doesn't it?

BLOOMBERG: I don't think so. I think that it gives me an enormous opportunity.

What I have is I've inherited a city which is one of the safest big cities in the world. I have inherited a city with 8 million of the greatest people and 250,000 dedicated employees. And now my chance is to go and address other problems than what Rudy had addressed.

He did some things. I will do some things, hopefully. And my successor will do other things.

BLITZER: You may know that a recent survey conducted by among experts listed New York as safest city, the most prepared city in the United States right now. Is that because of what happened on September 11?

BLOOMBERG: Well, I think September 11 showed the strengths of the city, but we have been a city with enormous capabilities for an awful long time.

And I came this morning from the World Economic Forum, where in two months we put together a program that they normally take two years to do over in Switzerland. And it's bigger than they have ever had it before. It's better than they have ever had it before. It's been safer.

We've had very few protests. We'll have some more today, I'm sure. But New York's finest will take care of that give people the right to express their views, at the same time protecting those who have other views. That is what New York is all about. BLITZER: Have there been any problems whatsoever, as far as economic conference in New York -- the so-called Davos conference is concerned? Any security threats arise yet?

BLOOMBERG: There have been the normal things that go on in a big city, and then there are the normal things that go on when lots of people want to come here make their views known.

But we've had, given the number of people that have come to visit New York this weekend, a very small number of arrests. Very few people did anything that you would question. A lot of people came and expressed themselves. That's what New York -- that's what America was founded to do. But very few people, in all fairness, have tried to take away others' rights while asserting theirs.

BLITZER: How worried are you, Mr. Mayor, about another terrorist attack against your city?

BLOOMBERG: I think that we have to take every precaution that we possibly can. But you also have to balance security with the right for people to go about their business and move freely about.

And that's the balance that professionals do. I've got, I think, the world's best police commissioner. We have appointed a deputy commissioner for intelligence and a deputy commissioner for counterterrorism. So we're focusing on those things.

At the same time, we are focusing on crime and quality-of-life crimes. One of the reasons that we have great city is that people can go off to school or to their office every day, not look over their shoulder and not worry about their children. And we've got to continue that.

BLITZER: All right, Mr. Mayor, stand by. We have to take a quick break. There is a lot more I want to talk to you about.

Coming up, the next hour of Late Edition. We will continue our conversation with the New York City mayor, Michael Bloomberg. Then we'll get a Super Bowl preview from the former NFL star and a long- time hero of mine, Joe Namath.

Plus, a look at security preparations for the Salt Lake City Winter Olympics. And former President Ronald Reagan approaches a milestone, and as he does, we'll speak with his former speechwriter, Peggy Noonan.

Late Edition will be right back.


BLITZER: This is Late Edition, the last word in Sunday talk.


MICHAEL BLOOMBERG (R), MAYOR, NEW YORK: We have been attacked. We have been tested. And now we are on the path to renewal and recovery.


BLITZER: On the road to recovery, we'll discuss New York City's progress with the new mayor, Michael Bloomberg.

We're counting down to the big game in the Big Easy with former Super Bowl MVP and football legend Joe Namath.

Then, the Olympics, a gathering of the world's best athletes. But are the winter games in Salt Lake City a target for terror? We'll talk with the Olympic organizing committee's Mit Romney and Utah Governor Mike Leavitt.

And Bruce Morton on the virtues of standing alone.

Welcome back. We'll check the latest developments in our news alert from Atlanta in just a few moments, but first back to our conversation with the new New York City mayor, Michael Bloomberg.

Mr. Mayor, thanks again for joining us.

Are you getting all the help that you need from the federal government in terms of money and intelligence and other sort of assistance to protect the people and tourists who come to New York?

BLOOMBERG: There's no question that one of the reasons I picked Ray Kelly as my police commissioner was his experience in Washington. He ran the Secret Service, he ran Customs.

And I can tell you that the cooperation and communications between not just the city and the federal government, but the city and the state government as well has just been superb.

You know, there is a potential for all the time for problems, we've got to worry about that. We've got to be mindful. Right now we have Daniel Pearl, a Wall Street Journal reporter who's being held overseas and hopefully will get out alive. Our prayers have to be with him. Our prayers have to be with our friends our sons and daughters who are trying to keep the peace and stamp out terrorism around the world.

But the federal government's been as helpful as could you possibly expect.

BLITZER: As you know, there are some in New York who believe your resources are being stretched too thin in New York right now. Are they being stretched too thin?

BLOOMBERG: Well, I think that the test will be when you look at crimes statistics and quality of life statistics over a period of time, but I can tell you for the month of January, the murder rate was down 40 percent from where it was a year ago. And a year ago was a long time before September 11.

So, at least measured by the numbers at the moment, we're doing well in protecting the public on a public safety point of view, but also keeping crime down and making limited resource goes further, that's what we've got to do.

Every state, every city is going to be tested with a down economy. Doing more with less is what good management's all about, and I think we've got it here in the city.

BLITZER: Every time I interviewed your predecessor Rudy Giuliani since September 11 and I asked him, what could people do outside of New York to help, he always gave the same answer. He said come visit New York, go see a Broadway play, spend some money in New York.

But can you assure all those people out there who want to come to New York that they'll be safe?

BLOOMBERG: I can tell them that they will be safer on the streets of New York than they will be on the streets of their hometown. And that's true for the 150 bigger cities, the biggest cities in the United States. New York is the safest big city around.

And so, come here if you want to be safe. You don't have to worry about coming here and the reverse.

BLITZER: You know, there's been somewhat of a controversy, what kind of memorial at Ground Zero should eventually be established. Where do you fit in? Where do you believe this situation should be resolved?

BLOOMBERG: Well, I think that it's going to take some time. You want to make sure that everybody can express their points of view.

And then you've got to step back and say, you know, maybe the most moving memorial built in modern day any place in the world is the Vietnam Memorial in Washington. And nobody, at the beginning of the process, would have thought that you'd something as simple basically below ground, and yet it turned out to symbolize everything that we wanted to say to memorialize those 55,000 people that gave their lives to protect us. So, you can't tell in advance, but we'll have a competition. We'll do it after we consult with everybody. At the beginning, not everybody will be happy, and the test will be a few years later when you look back and say, "What did we create," and hopefully people will say we did the right thing.

BLITZER: And should they ever rebuild those two towers at what once was the World Trade Center?

BLOOMBERG: Well, we should rebuild something on that plot of land around a memorial. But nobody suggests that we can build 210- story towers. The economics just don't make any sense. They were not doing very well before 9/11, and now it just would be very difficult to, from a commercial point of view, to rent them.

BLOOMBERG: But mixed-use buildings on that site around a central memorial is exactly the right thing. We are trying to remember those we lost, and we are also trying to build an economy for those they left behind. Both things are important. BLITZER: Earlier in this program, Mr. Mayor, we saw picture of riding the subway in New York. Do you really ride the subway every day?

BLOOMBERG: Wolf, in 1966 when I came to New York, I rode the subway every day for 15 years, and nobody ever asked me about that. Nobody photographed me. Nobody asked me for my autograph. Nobody introduced themselves. I don't know why everybody thinks it's so strange.

Yes, I take the subway every day. It's the easiest way to get around.

BLITZER: You know, it's an interesting development, because, I'm sure, many, many years ago when you used to take the subway, you weren't as wealthy as you are right now.

But, Mr. Mayor, thank you so much for joining us. And I have to be -- disclose -- full disclosure to our viewers. You are a graduate of Johns Hopkins University. I'm a graduate of Johns Hopkins University. But you have given that university a lot more money than I have.

Thanks to you for joining us.

BLOOMBERG: Well, we hope you'll match me, Wolf.

BLITZER: Oh, I wish I could.


Thank you so much for spending some time with us. I appreciate it very much. Good luck in a very, very tough job.

And now time for this hour's news alert.


BLITZER: And just ahead, it's down to the Big Easy for the big game, Super Bowl XXXVI. Millions of people in the United States and, indeed, around the world are expected to tune in for this sports spectacle.

We'll get some insight from the pro football legend and Super Bowl champion, Joe Namath, and the CNN Sports Illustrated football analyst and former NFL wide receiver, Irving Fryar.

Late Edition will continue right after this.


BLITZER: Welcome back.

Later this afternoon, the St. Louis Rams will square off against the New England Patriots for football's top prize, the Vince Lombardi trophy. Since its start in 1967, the Super Bowl has evolved from just a football game to one of the America's biggest events.

Joining us now from New Orleans, the former NFL quarterback Joe Namath. He led his New York Jets to victory in Super Bowl III, a day all of us remember, at least I do, very vividly. And the CNN-NSI football analyst Irving Fryar. He's also a former wide receiver. He played for the New England Patriots in Super Bowl XX.

Gentlemen, welcome to Late Edition.

And, Joe Namath, let me begin with you. How do you feel to be back at this Super Bowl? I'm sure you've attended many of them over the years, but how about right now?

JOE NAMATH, FORMER NFL QUARTERBACK: Well, Wolf, it's exciting, of course. You know, you see so many friends, like Irving here, you get a chance to visit and see guys you haven't seen for a while. And it's become to me the most spectacular week in sports.

Everyone here is just thrilled to be here, and there's so much excitement. Not a loser yet, so just everybody's happy.

BLITZER: You know, all of us remember 1969 when the Jets beat the Colts. You were 18-point underdogs. The Rams today are 14-point favorites over the Patriots. Remind our viewers what happened in Super Bowl III. We're looking at some pictures of that dramatic day.

NAMATH: Well, first of all, Wolf, I've got to tell you. You know, whether you're on a team in your neighborhood, your junior high, your high school, college, and you've done reasonably well, and you have confidence in your team, and you respect one another, when people keep telling you, how badly you are going to lose the next game, you get a little bit upset and a little bit angry.


And this is our football team, the New York Jets, at that time. We felt very confident about our team, and we believed we were going to win the game, and I think that's one of the things New England has to have going into this game today. They've got to believe they're going to win the game.

BLITZER: Nobody really believes, Irving, that the Patriots are going to win, except maybe some of those Patriots themselves. Do they have a shot today?

IRVING FRYAR, NFL ANALYST: Well, I think they do, Wolf, I think they have to do some things that they haven't done in the past, which is, play a perfect game.

I mean, there's a lot of things that -- they go into a count, and I think they have to make sure that they have good field position, when you're talking about this game, make those Rams -- obviously they're going to score, but make them go 70, 80 yards when you talk about them scoring points.

Get some big plays on special teams. They did that last week against the Pittsburgh Steelers, did a fine job with Troy Brown (ph) and that punt return. They also blocked a field goal. Troy Brown (ph) picked it up and pitched it back to one of his team-mates, Harris (ph), and he ran it in for a touchdown.

And then they've got to do what I think is most important, is trying to find a way to account for Marshall Faulk. That's something that many teams that have played the Rams this year have not been able to do. But I believe Bill Belichick (ph) and that defensive regime on that field today for the Patriots will find a way to account for Marshall Faulk.

If they do those things, they have a chance to win.

BLITZER: What do you think about that, Joe?

NAMATH: Well, you know, I...

FRYAR: You're a Patriots fan.


NAMATH: Yes, I'm having a tough time. I pull for people. In this case, you know, I know people both sides, so it's a very difficult thing.

I'd like to see an underdog come through. St. Louis just won it two years ago, and I'd like to see some new blood in there.

But, on the other hand, the Rams have earned everything they have. I know some people on their side, too.

So, it's tough for me to really figure out how I'm going to pull for the game.

I really think, though, the underdog has a chance. I like to see underdogs come through. I think it lifts everyone that's an underdog that's out there, fans, whatever.

And, you know, I hate to say I want to see an upset, because I don't want to offend the guys on the Rams...

FRYAR: Well, say it. You're on the TV, say it. You predicted...


NAMATH: Yes, I'd love to see the upset.


BLITZER: Well, let me ask you, Joe, when you guaranteed that the Jets would beat the Colts in 1969, was that simply bluster or did you really believe that deep down?

NAMATH: You know, Wolf, first of all, I really believed it deep down. We're leaving practice, going to practice one day, and in the cars Vito "Babe" Perelli (ph), our quarterback, Big Boy Pete Lammons (ph), our tight end, and Bill Matheson (ph). Big Boy Lammons (ph) turned around and said, "Hey, you all, if we don't stop looking at these films, we're going to get overconfident."


We believed we were going to win the game, man. And it's a lasting feeling, I can't explain, it's one of the best feelings ever to win a championship, certainly on the pro level.

BLITZER: Irving, I don't know if you're even old enough to remember Super Bowl III, when the Jets beat the Colts.


But if you do, you remember that game, especially for old AFL fans like me, having grown up in Buffalo, it was one of the most exciting days of my life, and I've had a lot of exciting days since then.

You remember that Super Bowl III?

FRYAR: Well, I don't remember watching it, but I remember hearing a whole lot about it.


You know what? I'll tell you what, one of the greatest things in pro football was that Super Bowl, Super Bowl III, where Mr. Joe Namath guaranteed that they were going to win, they believed it.

And I do believe -- you can't tell me that most of the Patriots, or probably all the Patriots players, really do believe deep down on the inside that they can beat the Rams. And they need to have that confidence in order to go out on the field and execute the way they must execute to win the game.

BLITZER: You once played, Irving, for the Patriots, so you remember playing in a Super Bowl, a game, of course, that you lost.

What do you do in the hours before a game like this to get your team ready emotionally to take on a team like the St. Louis Rams?

FRYAR: Well, I'll tell you what, the guys last night, they didn't get much sleep. They're emotional. They try to rest, but they are restless.

I think the best thing that you can do is visualize yourself playing a good game. I think the thing that you can do is try not to get too excited.

And it's the old cliche, like all of us say as football players, we got to get in the game and get that first hit. And once those guys get into the game, the ball is kicked off and they bang into one another, it will be just like another football game. Yes, the stakes are much higher, but that is the thing that has to take place. They've got to get into the game and realize that it's just another game and play it that way.

BLITZER: Joe, is this game -- it's not just another game, though. It's the Super Bowl. And the pressures are enormous, the pressures building up all week. How do these players just pretend it's another game?

NAMATH: You don't pretend it's another game. I mean -- well, as Irving said, once you get hit, it kind of flows in there.

But it's very difficult not to get caught up in the emotion and the excitement. Learning how to handle that adrenaline flow is going to be instrumental.

I remember seeing the Patriots play the Bears here in New Orleans.

FRYAR: I lost.

NAMATH: I was out there for coin flip. And I remember Nelson (ph), a couple guys -- I looked at the Patriots, these few guys, and the mouths were dry and they were a little bit uptight. And the Bears seemed a lot looser.

And I think now that the Patriots are going back with their staff and with their players, they won't be as uptight is they were that first time around. And so that is going to help.

BLITZER: Irving, another thing that makes this game very different than all previous Super Bowls is September 11 and the security surrounding the Super Bowl in New Orleans. Talk a little bit about the security that you have witnessed leading up to tonight's game.

FRYAR: Well, they have some 2,000 local, regional and national law enforcement people here. It's been deemed as a national security area.

And I tell what you, trying to get out of the hotel just to get here on the set this morning was a feat in itself. It's an area that you feel very secure. I'm very confident that nothing will take place -- anything that will hinder this game, or put a tarnish on this game.

We've done a fine job. The people here in New Orleans are doing a great job of cooperating. You haven't heard much about any different types of incidents that would put a tarnish on this game or this setup here at Super Bowl.

BLITZER: All right. We have a caller from New Jersey who has a question for Joe Namath.

Go ahead, New Jersey.

CALLER: Hello? BLITZER: Go ahead.

CALLER: Hi, Joe. My name is Nancy Mehan (ph). I'm a Jets season-tickets holder, and you are the reason I'm a football fan.

I see that you are wearing the NYPD t-shirt. And you were such a -- you were such a representative of New York, as being Broadway Joe. And I'm wondering what your feelings are about New York and everything that's happened since 9/11?

NAMATH: I tell you what, since 9/11, you know, we all have shared a lot of tough emotions and we have a lot of friends that have been devastated by tragedy. But I saw Mayor Giuliani this morning and he has on his New York hat. And the people of New York, I have been told, are great people and I have learned that.

When I was rookie with the New York Jets, there was a fellow Sunny Worbin (ph), our team president. He said, "Joe, get to know the people of New York. This is the greatest town in the world and the greatest people in world."

Well, we all have our opinions. But I love New York and I love the people. And we're coming back and this country is going to come back from this tragedy.

BLITZER: Irving, I think we have another caller from California.

Go ahead, California, with your question. CALLER: Actually my call is for Mr. Namath. I'm a huge fan of yours, sir.

BLITZER: Go ahead, California.

CALLER: Hello?

BLITZER: Go ahead.

CALLER: OK. My question was, what do you think of the Patriots putting Brady in the position of starting quarterback in lieu of Drew Bledsoe?

BLITZER: All right. Let's ask Joe first and then, Irving, you can follow up.

NAMATH: Yes, first, I didn't have any doubt that Brady should be starting the game. He got the team there. He is well oiled. The team believes in Tom.

They also believe in Drew Bledsoe. When Bledsoe came in against Pittsburgh, I was so excited and happy for the way it worked out for them.

But the key to this thing is the team. And these guys on offense, they look at these tapes, every play of every practice of every game. They see the decision-making by Tom Brady. They like that. They see his toughness. They see he's a determined guy out there. So whether Tom -- well, first of all, he deserves to start. But whether they come in with Bledsoe if Tom's having a bad time, I don't know. Both of these guys are certainly capable.

And I just get tickled watching Brady play. I mean, he's a young guy. He's almost like a kid. But he is in second year, I guess, and he is wonderful. You look at his eyes. He's calm. His demeanor is cool, and he is tough. So, I'm glad he got the nod in a sense, not because Bledsoe is not playing, I like Drew. But I think he earned the chance to start.

BLITZER: What about that, Irving?

FRYAR: I agree with Joe. I think the right decision was made in starting Brady because of the fact that he has played most of the season and the team rallied around him.

But at the same time, I'd like to say this, you've got to give Drew Bledsoe a lot of credit because when all this took place, when the decision was made earlier in season to make Brady the starter when Drew Bledsoe came back and was healthy, he did not make a big stink about it.

FRYAR: He did not cause a lot of controversy. He had a great attitude. He acted as the great leader that he is on this team.

And what would solidify that was the fact that he came in last week when Brady went down and the team responded to him. I believe that if he had acted like a cancer on this team and not responded in the manner that was proper, this team would not have responded to him last week when they played the Pittsburgh Steelers, and they probably would have lost that game.

So you've got to feel good, Patriots fans. You got to feel good. Bill Belichick (ph) -- if something does happen to Brady that when Bledsoe comes in, if he does ,that this team will respond properly to him.

BLITZER: All right, let's take a quick caller from New York. Go ahead.

CALLER: Yes, I was calling to see what you are doing nowadays, Joe.

BLITZER: Update our viewers, Joe. Tell us what do you nowadays. We know you're a family man.

NAMATH: Yes, I was just going to say, Wolf, I'm basically trying to keep up with my 16-year-old daughter Jessica and my 11-year-old daughter Olivia. And you know it's a full-time business when you have children.

It's a joy. I thank God that I'm healthy and have a great family. My priority in life right now is to stay close to my family and give them a lot of love. BLITZER: All right. Joe Namath and Irving Fryar on Super Bowl Sunday. Thanks to both of you for joining us. Appreciate it very much.

We'll all be watching the game, and I remember Super Bowl III almost like it was yesterday. Joe Namath, thanks for those memories.

And coming up next, thousands of athletes from around the world are preparing to go for the gold later this month. But with heightened security concerns, is Salt Lake City ready?

We'll talk with Utah Governor Mike Leavitt and the head of the Salt Lake City Winter Olympics organizing committee, Mitt Romney. Late Edition will be right back.


BLITZER: Welcome back to Late Edition.

On Friday, the 2002 Winter Olympic Games open in Salt Lake City, Utah. Unprecedented security precautions are being taken as a result of the September 11 attacks.

Joining us now from Salt Lake City is Utah's governor, Mike Levitt; and in Park City, Utah, the president of the Salt Lake City organizing committee, Mitt Romney.

Gentlemen, good to have both of you on Late Edition. Good luck with the Olympic Games.

Governor Leavitt, are you prepared, all the security precautions set in place?

GOV. MIKE LEVITT, UTAH: We are ready. Five years in the planning. We'll have nearly 15,000 security oriented personnel; $310 million spent. I think our plan is a good one. It was good plan before September 11, and it's an even better one now.

BLITZER: But we heard the attorney general, John Ashcroft, say in the last few days that, even after his visit out to Utah, even after the visit of the homeland security director Tom Ridge, some additional steps, some additional personnel were added to fill some gaps. What was the problem?

LEAVITT: The national government's been remarkably helpful in this process. It's clear that this is not just a Utah event, it's a national event, an international event. And therefore, the most important thing is that we provide for safe games.

They have not so much as broadened the plan, they have basically thickened it. They've added more people, a little more technology. We do have air cover at various times during the games.

It's the best plan, I think, that could be developed in this circumstance. Everything that is humanly reasonable is being done. BLITZER: Mitt Romney, everyone knows that the security at the actual venues, the locations for the various events, is going to be extraordinary. But what about outside those specific areas, in the parks, in the other areas where folks are just going to congregate who want to go see events? How's security out there?

MITT ROMNEY, PRESIDENT, SALT LAKE CITY ORGANIZING COMMITTEE: Well, the people who are responsible for preparing all the security looked back to Atlanta and looked at the mistakes there and said the one thing you have to do is make sure that the official celebration sites, the places where people come together at end of the day to witness the awarding of medals, that those sites are secure and safe.

And so in our case, we've surrounded the major celebration sites with fencing, magnetometers, security patrols, such that we assure people that when they finish the day on the slopes and they come down into downtown Salt Lake City or here in Park City that they'll be able to come to a place which is safe and secure.

BLITZER: Governor Leavitt, is there a good sense that you have that what happened in 1996 at that park in Atlanta at the Summer Olympics, that that can't happen in Utah?

LEAVITT: Incidents could occur in any major city on any day of the week, so it's impossible to eliminate all risk. But I believe that if there's a safe place to be during the next 25 days, it will be here in Utah.

There has been an extraordinary amount of cooperation between federal, state, and local law enforcement officials, and we're ready. We have our freeways are done, our railroads are working, the flags are hung, the snow's on the ground. It's game time, Wolf.

BLITZER: Mitt Romney, as you know, you heard the governor say that the security precautions have been in the works now for five years. But they must have gotten much more intense after September 11.

What were the major changes since September 11 that you probably didn't envisage before?

ROMNEY: Well, the people from the Secret Service and the Utah Public Safety Command sat down immediately after September 11 and said, how is our world changed? And clearly, one way it changed is looking at threats from the air in a different light.

And so, airspace restrictions have been put in place that are quite extreme, in some people's minds. And there's also intercept capability to assure that if anybody ventures into this airspace that they'll be accompanied out of this airspace. And so, that's one of the areas.

Secondly, some venues were slated just to have security patrols and armed forces walking perimeters. Those were changed to more secure perimeters, where we have fence lines and people on constant alert, vigilantly watching for anybody coming into that area. BLITZER: Governor, the vice president, Dick Cheney, was interviewed by our White House correspondent John King earlier in the week. I want you to listen to one thing that he said, and then I'm going to ask you a specific question. Listen to this.


RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: It's clear that the threat level continues. It's clear that there are still cells out there capable of mounting an attack.


BLITZER: Governor, as far as you know, is there any credible information about any specific Al Qaeda threat that has been disclosed to you, involving the Winter Olympic Games?

LEAVITT: No. And I am assured that if there were, we would receive that information.

Our goal is to assure that these games go forward in a way that that the games need to. This is the first time that the world will have gathered since September 11. It's a time of both healing and celebration, where we celebrate the values that unite the civilized world -- of peace and courage and human performance. It's a time when 83 nations will come together.

Certainly there are risks in the world. This is a dangerous place. But all that is humanly reasonable will be done to assure their safety, and we're going to assure that those who attend the games have a good time.

The athletes are ready. This is about athletes, not just about security. And it will be a world, global celebration that I think will be among the finest games ever produced since the Olympic movement began again in 1896.

BLITZER: Mitt Romney, this program is being seen live around the world in more than 220 countries, territories out there. And many of our viewers remember the tragic 1972 Summer Olympic games in Munich when those terrorists killed the Israeli athletes. They had dressed up, those terrorists, some of them, as athletes.

What kind of security precautions will the athletes themselves, the thousands of athletes who will be coming to Utah, what kind of security precautions will you have for them?

ROMNEY: Well, as you can imagine, every precaution is taken to assure that the athletes, as long as they're staying within one of the prescribed areas, have complete security coverage. The village itself is surrounded by double layers of fencing. It is entirely monitored both electronically and by human personnel. Their transportation is also monitored. The venues that they'll be competing in are surrounded by perimeter which is monitored on a constant basis.

All of these things suggest that the athletes are going to be having for them the same level of security you'd expect for a head of state. The president of the United States, for a governor, these are the levels of security being provided for these athletes, so they can focus on what they came here to do, which is really a lot more scary than flying or coming to a place like this: going down the downhill course, going 90 miles an hour down the skeleton (ph) or bobsled course.

These are the kinds of things that the athletes want to focus on. Our job is to make sure they can do that without ever being distracted by security concerns.

BLITZER: And just, Governor, to put this into some sort of perspective, what, there will be some 900 square miles, over 17 days, a million people coming in to watch these Winter Olympic games. What an enormous challenge for your state.

LEAVITT: It's an enormous opportunity.

When September 11 occurred, it became very clear that the importance of these games, as important as they were before, became even more important. Because this is, as I said, the first time the world will have gathered, and fate has fallen upon us to host it.

And we'll be ready. We look forward to having flags from around the nation. Our people are prepared. We have nearly 30,000 volunteers. We expect it to be a world celebration that will never be forgotten by our state and, we hope, the world, as well.

BLITZER: All right. We have a caller from Canada.

Please go ahead with your question.

CALLER: Hi. 1996, Atlanta, Georgia, the pipe bomb in the park, even with all the security and all money spent, they still couldn't stop it. How can you guarantee, even with 15,000 people and $250 million being spent, 100 percent guaranteed security, not only for the people participating but for all the people coming to watch? It just seems like an awfully hard task to me.

BLITZER: Well, I don't think they're making a 100 percent guarantee. But, Mitt Romney, why don't you try to answer that question?

ROMNEY: Exactly. I think what you do is make sure that every possible source of threat is being addressed by law enforcement personnel and being planned for.

I think in our case, the specific lesson learned from that pipe bomb Atlanta was that if you are going to have a major celebration site with free to concerts and athletes arriving there, you want to make sure that site is surrounded by fence and people are being searched before they go into it.

People who come into our Olympic Square, who come into Galavan (ph) Plaza, Washington Square, City-County Building and so forth, know that when they are inside that perimeter, the can have a meal and a drink, go to concert, go to an athletic event and know that they are in a safe and secure place.

That, as well as the other security precautions being taken, we believe makes every possible effort in place to secure the safety of these games. But no 100 percent guarantees.

BLITZER: And, Governor Leavitt, finally, President Bush is planning on coming out to attend at least some of the Games. Security, obviously, for him is always very tight. But you can handle it when he arrives there, can't you?

LEAVITT: We can handle it. We're ready for not just the president, but for the world. The last time I was in the White House talking about this with the president, he said, "I want you to know that I will be there, and so will America and so will the world."

BLITZER: Governor Leavitt, we'll be watching you. We'll be watching your state. We'll be watching the Olympic Games.

Mitt Romney, thank you so much. Good work preparing all of these activities and let's hope and pray that it will be a very, very quiet, peaceful, but exciting, Winter Olympic Games.

Thank you very much to both of you for joining us.

And when we return, Ronald Reagan turns 91 on Wednesday, the oldest former president in history. As he marks this historic milestone, we'll look back at the 40th U.S. president with the author and the former Reagan speechwriter, Peggy Noonan.

Late Edition will be right back.


BLITZER: There's still much more ahead on Late Edition, including reflections from former Ronald Reagan speechwriter Peggy Noonan, on the 40th president's character, his legacy and more.

Late Edition will be right back.



RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: You and I have a rendezvous with destiny. We'll preserve for our children this, the last best hope of man on earth, or we'll sentence them to take the last step into 1,000 years of darkness.


BLITZER: Former President Ronald Reagan giving his first televised speech back in 1964, on behalf of then Republican presidential candidate Barry Goldwater. His debut address, known simply as "the speech," launched him on the road that would lead to the White House.

Welcome back to Late Edition.

On Wednesday Ronald Reagan marks his 91st birthday, making him the oldest former U.S. president ever, surpassing John Adams.

Joining us now from New York is the former Reagan speechwriter, Peggy Noonan. She's also author of the new book, "When Character Was King: A Story of Ronald Reagan."

Peggy, thanks for joining us. Congratulations on the new book.


BLITZER: I notice on the book jacket, among other things, you wrote this: You said that one of the secrets of Ronald Reagan's success was no secret at all. It says it was his character, his courage, his kindness, his persistence, his honesty, and his almost heroic patience in the face of setbacks. That was the most important element of his success.

How do you explain that kind of character that he had, still has?

NOONAN: Oh, Wolf, that is a big question. I think it came from a number of elements within him. One was, he was an inherently hopeful kid. He was born sort of hopeful and optimistic. That can help you in life when you're being brave, because you can imagine that the outcome of your courage will be happy.

I think a major part of the making of Ronald Reagan also, Wolf, was the fact that he came from a family that had some real challenges and some real peace at the same time. His mother filled the family with a kind of God-loving and Christian peace that he breathed in, and it helped make him, I think, strong as a person.

His dad was an alcoholic who didn't always work in a steady way and couldn't always provide for his family. And so Reagan had to learn fairly early to be a strong person and to be an independent kid and to sort of walk forward into his life, on his own, but with his mom's religious belief.

So I think the combination of that made for an extraordinary character in this man.

BLITZER: And what do you mean with the title of the book, "When Character Was King"? What do you specifically mean by that?

NOONAN: I specifically mean that it was not his brain, and though his brain was a very good, first-rate one, it wasn't his brain, it wasn't his talents, it wasn't his looks. It was not external things and a head that made him a great man who changed history, changed American history and world history. It was the qualities of character within him that did this.

And so when he was in the presidency, I think people could look at him, and whether they liked him or not, or shared his political philosophy or not they could tell this is a man of character. He will tell us, to the ability that he can, the truth, as he can see the truth. He will lead us in a way that he thinks has integrity and honestly and rightness.

So I just think the heart of him and his leadership was character and not talent and not some other things that he had and that people tend to celebrate.

BLITZER: A lot of people are saying that some of the quotes -- some of the lines from President Bush in his State of the Union address, echo some of what President Reagan said. The evil empire, for example, that whole reference to the axis of evil that President Bush just spoke about. Here is a sample of the way President Reagan spoke in 1983. Listen to this.


REAGAN: Let us be aware that while they preach the supremacy of the state, declare its omnipotence over individual man and predict its eventual domination of all peoples on the earth, they are the focus of evil in the modern world.



BLITZER: What did he mean by that, "focus of evil"?

NOONAN: He meant that we can -- you know what he was trying to do there, Wolf? He was trying to bring the announcement, the pronunciation of honesty and truth to American and world foreign policy.

In the previous 25, 35, 40 years, the United States had been saying, "Maybe we misunderstand the Soviet Union. The Soviet Union has problems that we don't fully appreciate. You have to understand the Soviet Union within a context of history and geopolitical desires." Ronald Reagan was saying, "No, the Soviet leadership is communist leadership and communism is evil at its heart." That's how Reagan saw it.

I think history, as it looks back in the writing of great histories, will prove him correct.

But it is interesting to me that Mr. Bush, our current president, sees another huge and great struggle, not in ambivalent terms and not in -- so much in sort of geopolitical gobbledy-gook terms. He sees a right and a wrong here. He sees an evil and an absence of evil. And he is calling the other guys who would knock down the World Trade Center, who would bring a dirty bomb into Manhattan and kill millions of people, he is calling them what they are, which is evil.

Now, from -- number one, I think he is correct. But number two, this is kind of a language that people understand because I think people naturally within them have an understanding of truth and have an understanding that there is some very good in the world and there is some evil too. And when it is named, it is not a bad thing, it is a helpful thing. BLITZER: Was the phrase, the evil empire, was that vintage Ronald Reagan or just a clever phrase from a speechwriter? I know it wasn't your phrase, because you joined his team later. But as far as you know, who made up that phrase?

NOONAN: Oh, the evil empire speech was given in Orlando, Florida, to, I think, to a bunch of Protestant Christian evangelical organizations. I think I'm correct in that, unless it was the Westminster...

BLITZER: You are correct.

NOONAN: All right, fine.

BLITZER: You are correct.

NOONAN: Yes. I know -- it was before I got to the White House. I know that speech was worked on by a speechwriter named Tony Dolan (ph), and there may have been others involved, I'm not sure of that. I know the NSC, the National Security Council, and the State Department got very involved in that speech.

I know it was Reagan who, as he always did, was the one who finally made the decision, I will say this or not say it. I will say it in this way or not say it in this way.

Reagan's speechwriters had a way of writing for him what he thought. That's why I think we felt we did a good job. We were writing the old man's thoughts in words that we thought he liked. If he liked them and approved of them, he said them. If he didn't, he didn't, and it wound up in the dustbin of history.

BLITZER: Let me read another excerpt from your excellent book, "When Character Was King," an excerpt in which you wrote this: "Reagan was an actor. All of our great modern presidents have been actors. FDR with his plummy tones and cigarette holder tilted jauntily upward. JFK with his lovely, diffident humor and love of lofty rhetoric. But the key always is to be an actor without being a phony, without being insincere, inauthentic, not your true self."

NOONAN: Yes. I think that's true. I think -- you know, the modern presidents of the media age, of the television camera, the sort of thing I'm talking into now, and the radio microphone, they had to learn to -- or they simply had to, if they had it within them naturally, as FDR did, they had to learn to portray their presidency for this extraordinary media thing that we have going and have had going in America for 50 years.

NOONAN: But you have to do that as a president or as a political leader while also being yourself, not being a phony, not trying to make believe that you are something that you're not.

You know my opinions, Wolf, and you will probably understand that I am the sort of person who would have the opinion that Mr. Clinton, the president immediately before Mr. Bush, had so much capability in terms of media. He loved the television camera, he loved the microphone, he loved portraying himself, in a way. But at the same time, I think he appeared not to be portraying, for so many of us, his authentic and honest and real self.

Bush, it seems to me, the president now, has a different kind of struggle. He's just getting used to portraying himself through TV, through radio. And he doesn't seem to have any struggle with keeping his authentic self. He's an authentic guy, I think you can tell. It's part of his awkwardness, which you can consider charming or not.

BLITZER: Yet there was a blotch, as you remember vividly, you remember well, I remember well, involving Ronald Reagan's presidency, was the arms sales to Iran. How did that fit in with his character?

NOONAN: How did it fit in with his character? Boy, in an odd way, it was utterly of a piece with his character. He was a very kind man, and inspite of the fact that he was not always engaged in a deeply personal way with people around him, he was engaged on some kind of imaginative level with people who he knew were suffering.

One of the people, one of the groups of people he felt the suffering most of were the people who were being held in Lebanon and in the Mideast, those who had been made captives by various bunches of bad-guy wackos, if you will. Reagan wanted so much to get them out of there, he did a great deal to try to get those captive people out of there.

But in the trying to do that, he made some real mistakes. He backed some people who I think were not thinking defensively enough about the United States and about how things might look if they became known.

I think he also allowed, by the end of his presidency, a certain amount of leeway and latitude to people who worked for him, who proved themselves not to be up to the stresses and strains of that leeway and latitude.

BLITZER: And, Peg, we only have a few seconds, but I want to just give you a chance to respond, because your name, as you know, has surfaced in the Enron investigation. Like some other writers, some other journalists, you did take some money from Enron, obviously nothing illegal. But tell our viewers precisely what that was all about.

NOONAN: May I tell you, Wolf, I did not take money, I earned it. I worked really hard for it, in early 1997. I worked with Ken Lay, who was the head of Enron, trying to work with him on a speech that was about the deregulation of electricity and trying to work with him on his annual report. I billed him for it. I'm not a person who writes, I wasn't a columnist in those days, but I don't write about business, and I always felt this was legitimate work and really hard work.

I, however, found it really difficult to do the work, in part because it was hard for to understand the company. And so I did not go forward with a regular relationship with him. I thought I didn't understand Enron because my level of business sophistication was not high enough. I think, in looking back, I didn't understand it because it was not an understandable place. It was a kind of empire built on very provisional and tentative things that might happen.

I think, looking back, it probably was not going to succeed as a company, but certainly, back in January of 1997, it looked like a real, solid, triple-gold, Wall Street kind of place.

But anyway, I didn't take money, I worked real hard for it. I don't regret it, except to the extent that, when you work for a company that gets in trouble, you can get a little scandal goo on you. You know what I mean?

BLITZER: I know...

NOONAN: All right, it gets on you, but...

BLITZER: I know what you mean, and thanks for clarifying that matter.

Peggy Noonan, the author of the new book, "When Character Was King: A Story of Ronald Reagan," thanks for joining us. Good luck with the new book.

NOONAN: Thank you so much, Wolf.

BLITZER: Thank you.

And when we come back, Bruce Morton, he's got some thoughts, as he always does. Stay with us.


BLITZER: Welcome back to Late Edition.

The Enron controversy was the topic of most of your e-mail that was sent to us this past week.

This is an example: John from North Carolina writes this. "Vice President Cheney owes it to himself and the people to offer full disclosure."

Allen from Alabama writes: "We need to make sure we let the administration know they're not above the law on this one."

And now Bruce Morton's offers his thoughts on the possibility of America going it alone when it comes to global matters.


BRUCE MORTON, CNN CORRESPONDENT: President Bush talked a lot about the war on terror in his State of the Union speech, and he may, in the process, have announced a big change in U.S. policy. People here are still wondering whether he did. When John Kennedy, in his inaugural speech, said the United States would pay any price, bear any burden to assure the survival and success of liberty, he spoke as the president, of course, but also as the leader of a coalition, of NATO, as, in the phrase of that Cold War day, the leader of the free world.

That's been the pattern ever since. In the Gulf War, the United States led a coalition. In the war against the Taliban, the U.S. led a coalition.

Now, the president seemed to be saying last Tuesday, the U.S. may decide to go it alone.


BUSH: North Korea is a regime arming with missiles...

BUSH: Iran aggressively pursues these weapons...

BUSH: Iraq continues to flaunt its hostility toward America...


MORTON: The president singled out three countries, North Korea and Iran, which have recently made at least some friendly gestures toward the U.S., and Iraq, which hasn't; and called them an axis of evil, biblical language with which Mr. Bush, a born-again Christian, is comfortable.

But then it gets interesting. Some governments will be timid in the face of terror, he said.


BUSH: And make no mistake about it...


MORTON: "If they do not act, we will."

Again, "America will do what is necessary to ensure our nations security."


BUSH: I will not wait on events while dangers gather.


MORTON: "I," not "we."


BUSH: I will not stand...

(END VIDEO CLIP) MORTON: "I will not wait on events," "I will not stand by." That sounds as if Mr. Bush is ready to act alone.

Administration briefers were out in force the next day telling reporters this didn't mean the bombs would start falling this week or anything like that, but some see action ahead.

The New York Times' William Safire wrote about B-52s taking out North Korea's key nuclear-bomb-making sites, for instance.

And some remembered Mr. Bush's earlier decisions to go it alone internationally: end the ABM Treaty, let the Russians object if they want to.

So the question is, does the president mean to use force whenever he wants, wherever he thinks it's needed, whether any allies come along or not? The speech did not answer that, but it raised the question.

American presidents have said for generations that the United States alone cannot be the world's policeman. Now a president may be saying, yes it can. I'm Bruce Morton.


BLITZER: Thank you very much, Bruce.

And to our international viewers, good-bye and thanks for joining us.

For our North American audience, stay tuned for more of Late Edition. We'll talk with two key members of Congress who are investigating Enron. Stay with us.


BLITZER: This is Late Edition on CNN, the last word in Sunday talk.


(UNKNOWN): It's a classic sort of feeding frenzy in Washington. Nobody's got a charge to make. Nobody did anything wrong.


BLITZER: But the Enron investigation intensifies, with former CEO Ken Lay scheduled to testify before Congress tomorrow. We'll talk with two top congressional investigators, Democrat Henry Waxman and Republican Jim Greenwood.

Then, our fast-paced political talk, Sunday style.


CALLER: I've got to say that you guys look smarter and hipper than the Mclaughlin Group.


BLITZER: Late Edition's Final Round. You've got questions, they've got answers.

Welcome back.

Joining us now are two key members of the House Energy and Commerce Committee, which is one of the committees -- one of the many committees investigating the entire collapse of Enron. In Philadelphia, Pennsylvania, Republican Congressman Jim Greenwod, and here in Washington, Democratic Congressman Henry Waxman of California.

Congressmen, welcome to Late Edition. Thanks for joining us.

And, Henry Waxman, let me begin you with you. Tomorrow, Ken Lay, the former CEO of Enron, will appear before a Senate committee investigating the entire collapse of Enron. He's showing up, apparently no immunity was granted, he is not taking the Fifth Amendment.

What do you expect to hear from him?

REP. HENRY WAXMAN (D), CALIFORNIA: I don't know what to expect from him, but what I hope we'll will hear from him is the information on these partnerships.

There are many, many partnerships created that became the basis for siphoning funds out of the corporation. And it's a way that the insiders were able to loot that corporation and rob the employees and the investigators of their financial security

BLITZER: Congressman Greenwood, is there any suspicion that those partnerships, the millions of dollars in debt that was hidden from auditors, hidden from the public at large, investors, that that was illegal, or was that part of rules of games in those days?

REP. JIM GREENWOD (R), PENNSYLVANIA: Well, that's the $64 million question, Wolf.

The reason that we are having these hearings is only in part of who done it. The who-done-it aspect really is the province the Justice Department and Securities and Exchange Commission will go out and look for where the laws were broken and then punish those who broke those laws, pursue that.

Our job is find out, frankly, what of this was legal, because it appears that under our current system, investors have been trusting accounting firms to give them accurate reports of the liabilities of the companies in which they intend to invest and those accounting firms do that.

Here, it was clear that the generally accepted accounting principles have been stretched to the point where massive amounts of liability and debt were able to be kept off the books, hidden from the employees and the investors.

And to the extent that that was actually legal, our job in the near future is going to have to be to change those laws to make it clear that all liabilities of every publicly traded company must be disclosed fully and openly.

BLITZER: Congressman Waxman, is possible that all that crazy accounting, those practices that were going on, were within the law?

WAXMAN: It could well be that it was within the law. But you ought to put this scandal in context. It was certainly a business scandal. But I think it's more than that, it's a political scandal.


WAXMAN: Because a lot of what they have done and may turn out to be legal were things that the Congress and the regulators allowed them to do. The SEC chairman...

BLITZER: Arthur Levitt, the former chairman.

WAXMAN: ... Arthur Levitt had suggested, the former chairman, suggested separating the function of auditing and being consultants to a company. And instead, his proposals were diluted. Congress passed a law making it harder to sue if you're an investor who has been cheated in this kind of -- very kind -- same kind of circumstance.

So I think we need to look at all of the ramifications. Not just who did it and how they did, but who let them do it.

BLITZER: Is that a concern that you have, Congressman Greenwood, that there may have been some authority given from federal officials in Washington for these practices to go forward?

GREENWOOD: Well, I think our system has made assumptions, as I said earlier, that the accounting firms, because of their need for credibility, would feel compelled to make sure that all of these obligations were on the books.

I don't really think there is a whole lot to be gained here by finger-pointing, trying to blame whether this was the fault of previous administrations. It certainly couldn't be ascribed to the Bush administration -- the Bush administration is too new -- or members of Congress.

I think the real important work to be done is to find out exactly what was legal, what wasn't legal, and then change the law. That's what we do in America, when things go wrong, we find out how to evolve as a society and make sure that they don't happen again. And I'm confident that we will do that.

BLITZER: Congressman Waxman, are you suggesting, though, when you say that there was a political problem here, that this was a political problem during the Bush administration or going back to the Clinton years? WAXMAN: I think we have a good example of Enron having so much influence in politics, giving to Republicans and Democrats. They got special treatment. They were exempted from certain laws that otherwise would have applied to them. They seemed to be very well connected with Bush administration when they came into power. In fact, Ken Lay and the Enron people were the single largest contributor to President Bush's political efforts. They seem to have money all over the place.

BLITZER: But Ken Lay was also close to, in a sense, to President Clinton. Went to spend a weekend at Camp David with him.

WAXMAN: Well, I think this is an indictment of our political campaign system where Enron could have money all over the place and get special treatment. And then suddenly, you have a collapse of seventh-largest corporation in America, people being robbed of their financial security, the insiders walking away with over $1 billion, and people say, "Well, this is just a business scandal."

WAXMAN: It is. It's an accounting scandal, it is. But it's a political scandal as well.

BLITZER: What do you say about that, Congressman Greenwood?

GREENWOOD: Well, I think it's -- I'm an avid proponent of campaign finance reform. I don't take political action committee funds myself, and I'm a supporter of Shays-Meehan. I signed the discharge resolution and all of that.

But I think there's a little bit of a danger here in creating cynicism again about our political system, when 99 percent of this story here is all about the -- has to do with the integrity of the higher-ups at Enron, their business practices, and the degree to which Arthur Andersen, the accounting firm, was complicit.

This is fundamentally a collapse that hurt thousands and thousands of people because of some very selfish and reckless acts by the Enron employees, and we always have to take a look at ourselves in the mirror.

But I hate to see this turned into a political scandal, either for partisan political purposes or just to once again make everyone feel badly about how Congress and the federal government operate.

BLITZER: Is that was you're trying to do, Congressman Waxman?

WAXMAN: I just think we ought to learn all the lessons to be learned.

Certainly the people at Enron were the most culpable, and their accountants were also culpable. But I think it would be a mistake to just wall it off and say they're the only ones responsible.

When a criminal conducts an act, if the police aren't given the authority to go out and do what's necessary to stop it, then those who stopped the police from acting have to bear some responsibility as well.

BLITZER: Congressman Greenwood, I want to report to you and to our viewers what our CNN financial news correspondent, Alan Chernov (ph), is now reporting, that Arthur Andersen, the accounting firm, has just announced that it has asked Paul Volcker, the former Federal Reserve chairman, to conduct an internal audit to advise the firm on internal reforms in the wake of the entire collapse of Enron.

Is that a good start, as far as Arthur Andersen is concerned?

GREENWOOD: Well, it's a good start. He obviously brings credibility with him because of his stature from his past government service.

On the other hand, there's something that bothers me about the notion that a company has to ask someone else to come in and tell them what they have been doing wrong. It seems to me that, if Arthur Andersen wants to improve its credibility and its stature, the first rule is, take the blame for the mistakes you've made, say, we were wrong, we didn't operate faithfully to the people who trusted our advice, and we need to make a fresh start.

And I don't feel that Andersen has yet done that. They've blamed Mr. Duncan, the account manager. They're looking for outside advice as to how to improve.

They really need to just come forward and say, we blew it, this isn't the only account in which we took this kind of posture, and we're now going to change from within.

BLITZER: In a statement, Henry Waxman, the Arthur Andersen CEO, Joseph Berardino, says the company, in naming Paul Volcker to undertake this internal audit, it's also part of what he called, Berardino called, "a broad reexamination of the entire Arthur Andersen firm."

WAXMAN: I think it's appropriate. I think it's appropriate to have a full examination, get all the facts out.

That's one of the reasons I think that Vice President Cheney ought to give the General Accounting Office all the information that would pertain to how his energy task force operated, not just Enron's influence, but all the other special interests that wanted to get special treatment and the arguments they made to his task force.

Better to have everything out than to have things done secretly. That's what makes good government, when everything's in the open.

BLITZER: Congressman Greenwood, are you comfortable with the White House position in refusing to accept the demands of the GAO?

GREENWOOD: Well, nobody's comfortable at first blush with the notion of not divulging everything. I think anyone who looks at this question of the Cheney task force, their first reaction will be, of course, let's make everything out in the open. GREENWOOD: But when you look a little deeper into this, you realize that the framers of the Constitution created separation of power and checks and balances for a reason. And, since day one in our republic, there has been a tension between the Congress and the presidency about who can influence who and command which branch of government to behave.

This president and this vice president are doing what other presidents have done, and that's to protect the presidency itself and make sure that they're not being unconstitutional or that the Congress is not being unconstitutional in demanding certain documents.

I think frequently these kind of cases are resolved by the courts. I think that will happen here to provide us some more clarity.

But, again, it's a mistake to just point at the administration here. If you look at where the money was spent by Enron, the biggest recipients of Enron political campaign contributions were Democrats in the House.

And if Henry Waxman wants to demand that anyone who received contributions from Enron or assume that they were corrupted, if he wants to demand that every meeting that they had needs to be divulged, he might want to look right next to himself in the House of Representatives and talk to his colleagues who received these contributions and tar them with the same brush.

All of that, I think, is a side show to the real issue which is resolving these issues around accounting principles.

BLITZER: I'm going to let Henry Waxman respond to that in just a moment, but we have to take a quick commercial break.

A lot more to talk about with Congressmen Greenwood and Waxman. They'll also be taking your phone calls. Late Edition will continue right after this.


BLITZER: Welcome back to Late Edition.

We are continuing our conversation with Republican Congressman Jim Greenwood of Pennsylvania and Democratic Congressman Henry Waxman of California.

And, Congressman Waxman, Congressman Greenwood says in the House of Representatives, Enron gave more money to Democrats than to Republicans.

WAXMAN: Jim Greenwood is a doing a good job in his investigation, and I have the highest regard for him and I respect the fact that he also wants to clean the campaign finance system.

But it's not true that Enron has give more money to Democrats than to Republicans. They have given far more to Republicans -- but also to Democrats, and they've had influence with both Democrats and Republicans.

And that's point that I'm making: That a lot of what has happened might not have happened if the recipients of a lot of the influence from Enron didn't act on their behalf early to exempt from certain regulations, to stop the SEC from being able to handle the accounting in a proper way.

So I think we are making up for the mistakes that have happened due to the inordinate influence of Enron.

BLITZER: Are you lumping together, Congressman Greenwood, Enron and Arthur Andersen in coming up with that number?

GREENWOOD: No, I'm not at all. I'm looking at a printout here from -- I just took off the Internet last night. The number-one biggest recipient of funds in the House was Ken Benson, Democrat of Texas, $44,250. Second is Sheila Jackson Lee from Texas, $39,000. So they're number one and two.

Then you go through Joe Barton and Tom DeLay and then Martin Frost, a Democrat, Charles Stenholm, a Democrat, Chet Edwards, John Dingell, who is sharing Henry Waxman's probe.

The point that I'm making is not that I'm out to chastise these folks. What I am just suggesting is that it is a diversion from the task ahead of us, which is to reform the accounting system, to reform the way publicly traded companies disclose their liabilities. It's a distraction from that to try to play political games, if you will, in the blame game for all of this. I think that's looking in the rearview mirror and doesn't do us much good.

BLITZER: All right. Let's take a caller from Texas.

Go ahead with your question, please.

CALLER: Yes, hi. I was just wondering, why hasn't the government at least proposed or brought up the issue of reimbursing the Enron employees for what they lost for their 401(k) plans?

BLITZER: All right, let's ask Henry Waxman that.

WAXMAN: We may look at it. But I think the view is going to be that a lot of people lose money when they make investments, and the government doesn't stand behind investments.

I would hope what we might do is put the employees who are losing money in their retirement funds higher up in the bankruptcy lineup and not at the very end where they are now, so that they can get some of the money that's left in Enron corporation.

BLITZER: I want to ask Congressman Greenwood a comment that Linda Lay, the wife of Ken Lay, made -- Ken Lay testifying tomorrow before a Senate committee.

Among other things, she said that there were some things her husband simply didn't know about what was going on in Enron. "There are some things that the board of directors didn't know. But that will all come out in the investigation. Those things will all come to light. That's what we're all praying for, is that they'll get the truth and they'll bring it all out."

Does that sound credible to you, that there are certain things that Ken Lay didn't know about what was happening in his company at the highest levels?

GREENWOOD: Well, I never like to judge a man before I have the opportunity to talk with him directly, and I have not done that with Mr. Lay. We will hear what he has to say about that in the coming days, beginning tomorrow.

It is hard to imagine how the CEO of a company of this size that was engaged in moving hundreds and hundreds of millions of dollars of obligation off its books, enriching members of its hierarchy to the tunes of tens of millions of dollars, could be so oblivious. It's very difficult to imagine how that could be, but we will let Mr. Lay speak for himself.

I happen to be pleased with the fact that Mr. Lay has not chosen to take the Fifth. He's not chosen to seek immunity. But he is taking it like a man, in the regards that he is coming before Congress and will subject himself to, I'm sure, what will be a firestorm of questions from members of Congress. BLITZER: And one final point for you, Congressman Waxman. The Wall Street Journal, an editorial that you probably saw this week, slammed you directly, referring to dispute between the GAO and Vice President Cheney.

It said, "We have a deal for Congressman Henry Waxman. If Vice President Dick Cheney releases a list of everyone he's ever discussed energy policy with, then will Mr. Waxman disclose the name of every campaign donor he's ever met with?"

WAXMAN: Well, I would be happy to do that, but that is really not issue.

The issue is that the vice president was the chairman of a task force to develop energy policy, just as Hillary Clinton was the chairman of a task force to develop health policy when her husband was president. And the information about the task force should be made public, as was Clinton administration's task force made public; as has always been the case, except, now, suddenly the Bush administration is taking a hard-line, saying they are suddenly going to protect the prerogatives of the president and the vice president.

I think they are acting in a way that is inconsistent with what the Constitution provides. They ought to make the information available to the GAO.

WAXMAN: Even if they have some embarrassment in releasing it, there's no constitutional protection against an embarrassment. They have a right -- Congress has a right to get this information, they ought to give it up.

BLITZER: Congressman Waxman, Congressman Greenwood, both of you are going to be very busy in the coming weeks, probably months, investigating this entire Enron mess.

Thanks to both of you for joining us.

And 13 months after conceding a hard-fought and controversial presidential election, former Vice President Al Gore is back in the political spotlight.

Last night he addressed a huge gathering of Democrats in his home state of Tennessee. Our senior political correspondent, Candy Crowley, was there and has details.


BLITZER: And we'll talk about the return of Al Gore on Late Edition's Final Round. That's next. You can also join our panel discussion with phone calls and e-mail. Late Edition's Final Round, it's coming right up after this news update.


BLITZER: Welcome back to Late Edition's Final Round.

Joining me: Donna Brazile, the former Gore presidential campaign manager; Peter Beinart of the New Republic; Jonah Goldberg of the National Review Online; and Robert George of the New York Post.

President Bush's State of the Union address earned our pick for Quote of the Week. On Tuesday, he talked about widening the war to cover Iraq, Iran and North Korea.


BUSH: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world by seeking weapons of mass destruction. These regimes pose a grave and growing danger.


BLITZER: Peter, is it a good idea to lump these three countries together?

PETER BEINART, "NEW REPUBLIC": No, it's a bad idea, because it's intellectually incoherent. I mean, they are not an axis. Iran and Iraq hate each other. They've hated each other for years.

And furthermore, it's a bad idea because we're really only going to do something about one of them. We're clearly going after Iraq; I think that's a great idea. But the stuff about North Korea and Iran is mostly hot air.

BLITZER: What about that, Jonah?

JONAH GOLDBERG,"NATIONAL REVIEW ONLINE: Well, I agree, it's not an axis. And actually, there's this funny thing going around the Web these days, where China, Libya and Syria have announced that they're upset by not being mentioned, and they're forming the "axis of almost as evil."


GOLDBERG: Or "just as evil," I'm sorry.

But I agree, it's not an axis. It's just -- not in the way that the Germans, the Japanese and the Italians were. But I have no problem putting these people on alert, and I have no problem using the word "evil." And I think, you know, it's a Reaganesque flourish to use strong moral language.

And just because we're going after Iraq first doesn't mean that these guys can't be mentioned on the list. I just think the list might have been a little longer.

BLITZER: What about that?

ROBERT GEORGE, "NEW YORK POST": Well, I think -- I mean, some of the U.S. allies in the region, such as Kuwait, are very nervous about putting Iran in particular on there, because they're almost afraid that they might, you know, a few years down the line, actually push Iran and Iraq closer to one another.

But the fact is, I think, Iran is getting more and more scrutiny from this administration. There's already been the connection between them sending arms to the Palestinians, and also, we also found out in the last few days that they have may have also allowed some of the Al Qaeda people to escape as well.

So I think it's certainly legitimate to put them on the list as well.

BLITZER: In fact, today Secretary of Defense Donald Rumsfeld did confirm officially that certain Al Qaeda fighters have gotten into Iran.

BRAZILE: Well, I'll tell you, that may speaks volume in terms of what our policy should be over the next couple of weeks and continuing our fight against Al Qaeda. You know, one of the things I was shocked by this week is that the president did not mention Osama bin Laden in the State of the Union.

So, when you talk about evil and not mention Osama bin Laden, I was a little struck by that.

BEINART: There's a reason for that. And it's because this new phase is not really a war on terrorism. And that's what the Bush administration won't admit.

If you were really going after -- North Korea's connection to terrorism is their involvement with some Japanese communists in -- who hijacked a plane in 1970. It's ridiculous.

If you were really going after states that sponsor terrorism, you would you put Syria on that list, not North Korea, probably not even Iraq. So it's really a new kind of war about weapons of mass destruction.

BLITZER: We're going to move on, but I want to ask Jonah, was it a good idea for the president not to mention Osama bin Laden by name?

GOLDBERG: I think it was, because you don't want to elevate Osama bin Laden as the goal -- eliminating Osama bin Laden is no longer the goal for the war on terrorism. It depersonalizes the war on terrorism, which I think is probably a good idea.

BLITZER: All right. The Bush administration says it has found evidence that terrorists may have been targeting landmarks such as the Seattle Space Needle.

Earlier today I spoke with the national security advisor, Condoleezza Rice. She told me why that information is being publicized.


RICE: The president wanted to let the American people know that we now know more about the plans that were in store or potentially in store for the United States, and to warn that we all need to be vigilant.


BLITZER: Some people, though, say it's overly alarming and may just be an excuse for more money for defense.

GOLDBERG: Yes, it may be an excuse for more money for defense, but that doesn't mean it's unnecessarily alarming. I think the -- you know, it serves many purposes.

First of all, you have to inform the people that the war is far from over and that sacrifices are going to be demanded from them, in terms of what we're going to have in the budget and all sorts of other things. And in turn, those people put pressure on their elected representatives.

And, you know, you have to lead. And sometimes what you do to lead is, you have to put the threats out there and let people absorb it as they will.

BRAZILE: We should be kept informed of all of these new threats and any possible threats that are coming through.

At the same time, I think it's the responsibility of Congress to not just look at the size of the budget that the president's going to submit tomorrow for defense, but also look at what he's talking about. The last thing we need to do is throw money at the problem like we did in the '80s, when we had the other buildup and we found out that we were spending $500 for toilet seats.

GEORGE: And of course that buildup helped to bring about the end of the Soviet Union. Let's not forget that.

BRAZILE: "Of course"?


GEORGE: Let's not forget that. The fact is, these are probably known as necessary alarms, I mean, to let people know the threats are indeed out there. And the fact is, even if the war had not happened, this budget would have had an increase in military and defense spending regardless. But because the war did happen, and because of the expenditures and so forth, the amount of bombs and so forth, obviously we're going to need more money to spend on the military.

BEINART: Yes. The only problem is that the Bush administration isn't paying for it. I mean, I think we do need the money. What we don't need is a tax cut that will drain money over the years, just as this military spending starts to kick in.

GOLDBERG: Why don't you start complaining about the Louisiana Purchase? The tax cut passed. It's a law of the land, it's over.

BEINART: Laws are repealed all the time, Jonah.


BLITZER: Maybe the Louisiana Purchase will be repealed. We'll find out.

GOLDBERG: Not until after the Super Bowl.


The French get nothing.


BEINART: That's right.

BLITZER: Let's move on. Amid the tension and violence in the Middle East, the Palestinian leader, Yasser Arafat, says he stands ready to end the conflict with Israel.

BLITZER: In today's New York Times, he write this: "I condemn the attacks carried out by terrorist groups against Israeli civilians. These groups do not represent the Palestinian people or their legitimate aspirations for freedom. They are terrorist organizations, and I am determined to put an end to their activities."

Robert, do you believe him?

GEORGE: Absolutely not. I mean, as we were saying before, already we know -- well, Arafat claims he doesn't know how these arms happened to be coming through Iran, coming towards the Palestinians, that the Israelis intercepted. He's completely unbelievable on this, and he's either -- he's, in a sense, incompetent if he can't stop suicide bombings or he's, in a sense, complicit.

BLITZER: But give him a chance to back up his words now with deeds, right?

BRAZILE: Well, actions speak louder than words. And I tell you, we're in a different world now since September 11, and Chairman Arafat really needs to get out there. I know he's in the bunker...


... and can't move around a lot, but he needs get out there and really strongly enforce, you know, a cease-fire among some of the militant groups. And I think that's what the world is looking for.

BLITZER: Personally, he can't get outside of his own little building in Ramallah.

GOLDBERG: Yes, well, that's great, keep him there.

But, look, the New York Times op-ed page is not gospel, and merely by the fact that Arafat has a piece there saying these things doesn't necessarily mean he means them.

I would take him on a lot more -- I would be much more likely to believe that he was serious about this if was willing to read verbatim that New York Times op-ed in Arabic on Palestinian radio.

Because what he always does is he says all sorts of wonderful things that makes everyone all a twitter on the Upper West Side of Manhattan in the New York Times, but then he turns around and he talks about the blood of martyrs and pushing Israel into the sea and all that kind of stuff on Arabic radio to his own domestic population. Until he's willing to talk honestly to his own people, I don't believe a word he says.

BEINART: Read it in Arabic, I'm not even sure he's read that op- ed.


It was written by some PR flack probably in Virginia.

I think Arafat's problem is that he's crossed the Bush administration personally. This is an administration that take things very personally. They were very upset when they sent Anthony Zinni there and at just about the same time Arafat did not come clean about the ship, and I think that's their problem.

BLITZER: Is that a problem that he has, that the president no longer trusts him?

GEORGE: Yes, I think that's -- I think that's very clear. Before, the administration seemed to want it to do kind of a good cop, bad cop with Arafat. Now he's getting criticism from all sides of the administration.

BEINART: Everyone is a bad cop now with Yassar Arafat.

BLITZER: And what's the message the president's going to give Sharon, Ariel Sharon when they meet on Thursday?

BRAZILE: Well, I think he's going to support him in his, you know, ongoing war against terrorism in Israel, and I think that's what you're going to hear on Thursday.

BLITZER: All right. We'll soon find out. Stand by, we have to take a quick break.

We have a lot more to talk about including your phone calls from our panel. Late Edition's Final Round will return.


BLITZER: Welcome back to our Late Edition Final Round.

We have a caller from Kansas with a question. Go ahead, Kansas.

CALLER: Yes, why would the GAO have to go to Cheney with a lawsuit to find out who attended the energy meetings, when it'd be so easy to find out without going to him?

BLITZER: You want to handle that?

GEORGE: Well, they basically need to -- they need to get the information from the vice president. I don't think they can just assume who was there.

The fact is, though, on the Hill, I think you've got a number of Republicans who are very strongly supportive of the administration, who want this issue to go away, both staffers and members of Congress and so forth.

And I think, eventually the vice president is going to have to, just by force of politics, have give up this information.

BLITZER: Do you think he will, Jonah?

GOLDBERG: Yes. I mean, I think it's a -- he's in a dinghy of principle in an ocean of politics at this point. And the idea that somehow can he hang on, it to I don't see it happening.

BEINART: Yes, but Jonah, where is the principle? The New York Times has just announced that the administration was, right and left, giving out e-mails that Clinton and Gore got from their advisers. They weren't concerned about the presidential power then. The principle thing is nonsense.

GOLDBERG: Of course it's not nonsense. I mean, first of all, the Gore -- the GAO had a very similar problem with Al Gore, and the GAO refused to sue in the case of Al Gore, but is suing in the case of Dick Cheney.

BEINART: But how they can they really be concerned about principle if they were giving out all of these e-mails that were confidential advice to Clinton and Gore? GOLDBERG: Because it's a matter of principle. It's saying that the executive branch is supposed to be immune from these sorts of investigations from the congressional branch.

I admit, it's a small principle in this sort of -- in this sort of day and age that we've had. But at the same time, I don't -- do you really believe that Dick Cheney is being venal and corrupt in refusing this? I mean, do you think it's...

BEINART: No, I think this administration comes from the corporate world where they think that they don't have to answer to anyone. Their instinct is for secrecy.

GOLDBERG: Dick Cheney has been in and out of government for 35 years. I mean, it's not really very corporate.

BLITZER: You know, the vice president says he's trying to protect future presidents. That might be a Democratic president there as well.

BRAZILE: Oh, I don't think he's trying to protect anyone but himself in this matter. All the GAO is asking for is the dates, the time and the topic of discussion. They are not asking for confidential information. They are not asking for any...

GOLDBERG: They were at first asking, and they've backed off on that. The were asking for confidential information. They were asking for the minutes from meeting from everybody in there, and they backed off.

And it's been -- I have to admit, National Review Online, with Byron York (ph) doing the reporting, has been all over this story. And they're basically going back and forth. GAO pretty much called Dick Cheney a liar last week. And it's very ugly. The were asking for a lot of inappropriate stuff. Now they're just asking for the names.

BLITZER: Let's move on and talk about the former Enron chairman, Kenneth Lay. He testifies before a Senate panel tomorrow. One senator says the energy executive has lots of explaining to do.


U.S. SENATOR BYRON DORGAN: We want to know what Ken Lay knew. We want to know what the board knew. We want to know what the accountants -- I mean, how can the accounting firms have sat by here? Were they braindead, incompetent? Once you start peeling away the layers of this onion, it gets pretty ugly in there.


BLITZER: Peter, how ugly is it going to get?

BEINART: It's going to get very ugly, I think, for Enron and for Andersen.

The people who I think need a bit more heat than they are getting are some of the politicians on these committees who took a lot of money from Arthur Andersen, who bludgeoned Arthur Levitt when he tried to stop the accounting firm from doing some of the things that got us in all this trouble. Now they are talking about the obligations of other people. The media needs to keep the focus on the politicians, I think.

GEORGE: I agree with you almost 100 percent.



BLITZER: Tells us where you don't agree.

GEORGE: Well, for one thing, I mean, I think you've got probably two-thirds of Congress, I believe, ended up taking money from Enron...

BRAZILE: Most of them Republicans.

BLITZER: But plenty of Democrats.

GEORGE: Plenty of Democrats.

BRAZILE: Just a few.

GEORGE: Oh, just a few. But, I mean, the fact is, though, next week you've got 10 million different hearings going on. The Enron CFO is going to be taking the Fifth. I mean, I think you've got a situation -- you've got a situation where it's, in a sense, spilling everywhere.

BLITZER: The Enron CEO says he's not going to take the Fifth. He is not going to ask for immunity. He is coming over to make his case. But we'll see tomorrow morning precisely what happens when he appears before that Senate committee.

Meanwhile, Al Gore was the headliner at a Tennessee Democratic fundraiser last night. He expressed criticism of President Bush's economic policy. But he did not announce he was a candidate for 2004.

Donna Brazile, can Al Gore once again reinvent himself?

BRAZILE: Well, Al Gore can reemerge to help the Democrats retain control of the Senate and of course take back the House in 275 days.

BRAZILE: Al Gore can also help revive the Democratic Party, help the party with its message and getting it out to working families.

So I think it's important that Al Gore is back on the scene and that he's talking about real issues that will impact working families.

BLITZER: Is he running for president again?

GOLDBERG: I think he's probably running for president. And I think the real question isn't can he reinvent himself again, it's can he ever stop reinventing himself. This is a guy who's reinvented himself so many times, you know, you're not really sure where the original copy is and.

So look, I think he's going to run cause that's what politicians are like. People don't run for the president and sort of give it up. He's got the fire in the belly, he always has. And he's probably waiting and seeing, because it doesn't sound like the Democratic Party is rallying to his side yet.

BLITZER: He's established a new PAC, a political action committee, going to raise money for a bunch of Democratic candidates. Sounds like a candidate to me.

BEINART: Yes, I think the interesting question will be whether Democratic candidates want him to come and campaign for them in the fall.

BLITZER: That bad?

BEINART: Yes, I think that will be the -- well, they have other people they could ask. They could ask Bill Clinton, for that matter. If Gore doesn't get a lot of requests to go out there and help other candidates, that will be a bad sign.

GEORGE: The big question though is, you know, what is his message? And I think that's actually a problem that the rest of Democrats wannabe presidents also going to have, because they could talk about education, environment and so forth, but in the broader context of the completely changed world geo-politics, I don't know if the Democrats have a message.

BLITZER: Bottom line, Donna Brazile, you know Al Gore better than any of us know Al Gore. What's he going to do?

BRAZILE: I think Al Gore's is going to help Democrats this fall, and I think he'll review his options after the November 5 elections.

BLITZER: OK, he's reviewing options. You heard it from Donna Brazile.


BEINART: This just in.


BLITZER: We have to take another quick break. Our lightning round is just ahead. Stay with us.


BLITZER: Welcome back.

Unfortunately, the kidnapped Wall Street Journal reporter, Daniel Pearl, is still missing in Pakistan.

Peter, is the Pakistani government doing everything it can to help find him? BEINART: I think they're trying. The problem is, this is a government that for years and years was in bed with these very people, with terrorists and extremists. That's very hard to rout out overnight, and I fear this young man may be paying the price.

BLITZER: Robert?

GEORGE: Yes, I think Peter's exactly right.

BLITZER: Is there anything the U.S. government can or should be doing?

GEORGE: Well, I mean, I think they can, you know, put as much pressure as possible on Pakistan. But I also don't think that they, you know, should be sending the signal that we'll, you know, to cut some deal.

So, I mean, I think they're, in a sense, doing the best that they can as well.

BRAZILE: Well, I think they're doing everything possible, but they should go beyond the graveyards and go house to house and really search for him.

GOLDBERG: Yes, it's an awful situation, and it puts everyone in a terrible spot, because, you know, you can't reward this kind of behavior. But I don't think Pakistan needs to have it explained to them that it's really not a good idea to be murdering Wall Street Journal reporters, and so you've just got to hope for the best.

BLITZER: All right. On another front, the Bush administration, the secretary of health and human services in particular, Tommy Thompson, declared that a developing fetus should be eligible for government-funded health insurance. Abortion rights groups claim this is a ploy to ultimately outlaw abortion.

Donna, what's going on?

BRAZILE: Absolutely. A year ago, the Bush administration reimposed a gag rule, and now this is another threat, another attempt...

BLITZER: But how can anybody complain...

BRAZILE: ... to undermine Roe v. Wade.

BLITZER: But how can anybody complain about money going to poor pregnant women so they can have the proper treatment during the nine months of their pregnancy?


GEORGE: Hypocrisy abounds on this particular issue, because you've got liberals, who for years have been wanting to see expansion on anything that has to do with children's health, but they're against this because of abortion reasons. You've got conservatives, on the the other hand, who should actually be criticizing this idea of what is ultimately in a sense expanding an entitlement, but they're of course in support of it because of abortion.

BRAZILE: Robert, they don't want to help health care...

GEORGE: So what I'm saying is, I mean, I think there's ideological hypocrisy on both sides here.

BEINART: Yes, but this is what the scandal is. This president has such a terrible record, even back when he was governor, on the issue of the health of children outside the womb. And it's impossible to believe he's sincere.

It reminds me of that old Barney Frank line about Republicans, you know, "They believe that life begins at conception and ends at birth."


It's really hard to take this seriously.

GOLDBERG: Well, it's also hard to take people seriously who quote Barney Frank too often, so...


BEINART: This is the first time.


GOLDBERG: Your quotas over for the year.

Look, I love these kinds of stories, because, you know, it's one of these wonderful sort of positioning of a wedge issue which basically comes out with a whole new constituency of feminists against prenatal care.

And look, this is -- you know, if you call it helping the unborn or something that's pro-life, you can get liberals to be against anything. And I think, you know, liberals play these games all the times with conservatives. And so what's good for the goose is good for the gander.

BLITZER: All right. Just wrap it up, because we're going to move on.

BRAZILE: This is a threat of Roe v. Wade. They want to undermine it, and Thompson made the speech at the Conservative Political Action Committee to send a message to the right wing that we are going to keep our campaign promise to try to undermine Roe v. Wade.

GOLDBERG: And good for him.

BRAZILE: So this is not about prenatal care.

BLITZER: Meanwhile, the former president Ronald Reagan turns 91 on Wednesday, God bless him. We just had Peggy Noonan, his former speechwriter. She was on this program.

What remains, Jonah, and I'll ask you first, of Ronald Reagan's legacy?

GOLDBERG: Every president gets one sentence. You know, Lincoln freed the slaves. Roosevelt fought the Depression, won the Second World War, so maybe he gets a semi-colon in there.

And Ronald Reagan gets the sentence -- (inaudible) historians not withstanding -- that he won the Cold War. And he did win the Cold War, but I think his legacy is a lot bigger than that because he re- moralized American foreign policy and he put America on a path to fight Euroschlerosis and the sort of deading of the American economy. And I think he's going to grow larger and larger into one of the lions of the 20th century.


BEINART: You know, conservatives think that, just by repeating the sentence over and over and over again, millions and millions of times, that Ronald Reagan -- they can ignore the consensus of pretty much every actual historian who's looked into this.

Ronald Reagan's real legacy is this: That if you cut taxes a lot and you hike defense spending and the same time, you create a mountain of red ink. And our current president pays homage to that legacy every single day.

BLITZER: All right...

GOLDBERG: Even Gorbachev agreed that Reagan pretty much won the Cold War. GEORGE: And I guess Peter believes if you keep repeating something that isn't true a number of times, people will eventually believe it.


The fact is actually, his cutting taxes, in terms of long term, has helped produce both the '80s and '90s expansion, and then on top of...

BEINART: Why not blame this recession on him too?


GEORGE: On top of that, Jonah's point in terms of ending the Cold War.

BLITZER: Very quickly.

BRAZILE: Big spender, deficit spender. And that's what he'll be remembered as. BLITZER: That's not very nice. He's going to be 91 years old. He's got his birthday coming up. Say something nice about him.


We want to hear something nice about Ronald Reagan.

BRAZILE: I'll pass.


BLITZER: I guess we're out of time. Super Bowl, I'm saying the Pats by three.

GEORGE: I will say -- I'll agree with you, Pats by three.

BLITZER: All right. That's it, nobody else.


That's all time we have.

I'm Wolf Blitzer here in Washington. And that's your Late Edition for Sunday, February 3. Please join us again next Sunday, every Sunday, at noon Eastern.

During the week, of course, I'll see you twice a day, at 5 and 7 p.m. Eastern, two editions of Wolf Blitzer Reports.

Until then, thanks very much for watching.