Return to Transcripts main page

On the Story

Week of Public Mourning for Reagan Ends

Aired June 12, 2004 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BETTY NGUYEN, CNN ANCHOR: Here's a look at headlines.
A top Iraqi diplomat is dead, the victim of a drive-by shooting outside his home in Baghdad. Bassam Salih Kubba was one of four deputy foreign ministers. He had just returned to Iraq from the U.S.

Also in Iraq, their employer reports that seven Turkish civilian contractors being held hostages have been released. But three people taken hostages earlier this week, a Lebanese citizen and two Iraqi co- workers, have been found shot to death.

The jurors in Oklahoma could not agree on a penalty, so the life of Terry Nichols, convicted of 161 counts of murder in the Oklahoma City bombing, will be spared for a second time. He's already serving one life sentence and will now get another one.

And from Iraq, the Associated Press is reporting that the U.S. military will release more prisoners from Abu Ghraib prison, the facility at the center of the abuse scandal. Another 650 detainees are now due to be released on Monday. There have been four major prisoner releases since the scandal broke two months ago.

That's a look at the top stories at this hour. I'm Betty Nguyen. Now back to ON THE STORY.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Barbara Starr, on the story of national mourning for a former president, amidst fresh concerns over war in Iraq.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Los Angeles, ON THE STORY of a week so many people spent remembering Ronald Reagan, honoring him and watching the ceremonies of his state funeral.

LIS NEISLOSS, CNN SR. U.N. PRODUCER: I'm Liz Neisloss in New York ON THE STORY of a Bush administration success on an Iraq resolution. Will it just be another piece of paper?

ELAINE QUIJANO, CNN CORRESPONDENT: I'm Elaine Quijano in Crawford, Texas. I'll be back later ON THE STORY of President Bush, combining tributes to a former president with meetings with world leaders.

SUSAN CANDIOTTI: I'm Susan Candiotti, in McAllister, Oklahoma, ON THE STORY of a jury deadlocked over the fate of convicted Oklahoma City bomb plotter and murderer Terry Nichols.

KATHLEEN HAYS, CNNfn CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of events this week refocused attention on so-called Reaganomics.

Also, coming up, will events of this week have any political impact? And does President Bush benefit?

And 10 years since the O.J. Simpson murder case. He was acquitted. What's his life now?

E-mail us at onthestory@cnn.com.

Now straight ahead to Candy Crowley and a national farewell.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When the sun sets tonight off the coast of California and we lay to rest our 40th president, a great American story will close.

(END VIDEO CLIP)

CROWLEY: And a great American end to that story. That, of course, President Bush, at ceremonies yesterday, at Washington's National Cathedral. A week of pomp and circumstance, but also a week of fond memories, very personal memories, as well as some things for the history books, some really powerful images.

I have to tell you, out here in California, laid to rest, finally, ladies, last night, at his library in Simi Valley. You really -- you got the spine-tingling stuff last night at that ceremony. Just absolutely picture perfect. Even in his Hollywood days, Ronald Reagan couldn't have imagined this.

HAYS: Candy, I was struck throughout the week at Nancy Reagan's composure, a very powerful presence. I understand that last night in the final moments it became very, very difficult for her, as it becomes for many widows laying their husbands to rest.

CROWLEY: And -- true. And what happened at the ceremony last night was that -- in front of about maybe 700 or so people -- and these were close friends, longtime friends -- we had the ceremony. And then the family, in those pictures you just saw, went sort of out of sight, at least from the people at the funeral. Obviously, the cameras were there.

And boy, once they have folded the flag and gave it to her, and she went up to touch that casket for a final time, as she has so many times before, it was really hard for her to tear away. And I was thinking so many people related to Ronald Reagan thought, you know, they loved his story, it was an average American who came out of near poverty at any rate in Illinois and made big in Hollywood, and then to Washington.

And I thought that this is also a story that that generation, particularly, is now going through. So many widows know that those first couple of days, when she seemed so stoic, and those are almost the shock days. And then when it came to that final good-bye, when her kids were around her, you know, almost feel them saying, "Come on, mom, Come on mom," you know, "We've got to go." And it was -- that was a very, very hard moment, and the first time I really saw her not having quite control over herself.

NEISLOSS: George Bush spent a lot of time this week it seemed, and his administration officials, trying to wrap Bush, maybe, in some of this aura, some of this Reagan legend.

Candy, you covered the Reagan White House. How accurate are these comparisons? What do you see?

CROWLEY: Well, there -- you know, yes, there are comparisons. There are certainly that sort of Western cowboy thing that they both had going.

You know, history hasn't judged George Bush yet. And it's hard to remember, but at the time Ronald Reagan was in office, he was pretty controversial. I mean, he put the conservative back into the Republican Party. His tax-cutting, program-cutting, building up the defense were very controversial. They fought tooth and nail. He did it with such a smile on his face.

Look, he is clearly a Republican icon. I haven't covered a campaign since Ronald Reagan that the republican didn't say, hey, I'm a Ronald Reagan Republican. So obviously, this is clearly someone that George Bush wants to lay claim to, as all Republicans do.

But you also saw with John Kerry, they each chose a part of the Reagan legacy. Bush saying, You know, he was a determined man, Ronald Reagan. He stuck with what he believed in, which is very much like George Bush. And then you heard John Kerry say, You know, Ronald Reagan, even when he was breaking his hearts, did it in such a nice way, and it was such a lovely time in Washington.

So they each sort of pointing to parts of the Reagan legacy that they want to amplify.

STARR: You know, Candy, when you talk about legacies -- still, when I watched all of this on TV this week, it struck me that both on the East Coast and West Coast, this was a real turning of the page of history. At that service at the National Cathedral, it almost seemed like it was the last great summit of the cold war, Reagan, Thatcher, Gorbachev. This group will never be together again.

And then it moved out to the West Coast, to the family funeral, the friends of Hollywood, and the great names that ran that town in the 1950s: the Sinatra family, the Kirk Douglas family, a turning of a page of Hollywood history, too.

I just wonder if Americans -- so many born after or were children during the Reagan administration -- if they really grasp this real turning point of history that maybe some of us of a certain age feel a little more deeply. CROWLEY: Well, certainly, their parents have told them. We know that just by being out there on the roads, where you see so many young children. We saw those Boy Scouts saluting -- saluting the president at his -- where the coffin lay in state in the Capitol.

You know, I think that anytime there is a death of someone of this magnitude or national and international standard, everybody measures their own life. It's a milepost. And this is certainly one of the final mileposts of that World War II generation, and on the national -- international level of the Margaret Thatchers and the Brian Mulroneys.

And interesting to me, I was talking to one of my 20-something sons. And they said, Oh, mom, this is so sad about Ronald Reagan. And I said, Well, you know, he's 93. Great life, full life. And they said, Yes, but they said, you know, he was my whole childhood. So for that next sort of 20-something generation, and even those whose mother, when they weren't with him, you know, when they weren't with them, you know, were with Ronald Reagan, they do remember. This is the first president they can remember. So for them it's a passage of time. And I think that's true anytime we have something of this magnitude on a national level and we don't have it very often.

CANDIOTTI: Candy, because Nancy Reagan really built her life around her husband and understandably, especially so, taking care of him over the past 10 years, what do you suspect her life will be like from here on out?

CROWLEY: You know, who knows?

There were so many images of Nancy Reagan this week and so many people commented on her great dignity. There was a moment when she left paint Point Mugu to fly with the coffin back to Washington for it to lay in state and for the state funeral where she climbed up the steps of that plane, which is not Air Force One because a living president was not on it. But it was nonetheless -- there she was, standing on the top of this -- the steps of the plane, kind of waving. She looked so tiny. She looked so alone, because we were so used to seeing her with Ronald Reagan. And suddenly, she looked very small and very alone.

I'm sure as, again, any sort of widow can tell you, that these are moments of great loneliness. But she is one tough woman. Everyone will tell you that. Despite her apparent physical frailty, she's very strong.

But, you know, on the other hand, we've heard nothing but tales of the very -- the 50-year plus relationship. The last 10 years, she has guarded his memory very fastidiously, kept him protected, as she did during the White House. Most people around her, and when you talk to them, will say, thinks she will continue on protecting his legacy, that there will be work for the Ronald Reagan library, doing that kind of thing.

Now she's gotten into the stem cell research debate and taken a position, obviously, that is different from President Bush's. But how political she'll be, I think, remains pretty unclear, both because of her advanced age and because her politics were always Ronald Reagan. They weren't -- didn't ever strike me as republican. They strike me as her husband.

CANDIOTTI: Thank you, Candy, for your poignant observation. We'll talk more later about Ronald Reagan and the past week.

But just ahead, jury deliberations. A jury deadlocked over the fate of Oklahoma city bomb convicted murderer and planner Terry Nichols.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How many people do you have to kill before you get the death sentence? Is it 500? 1,000? I don't know. I'd just like to ask them that question.

(END VIDEO CLIP)

CANDIOTTI: Survivors and victims' families of convicted -- of the Oklahoma City bombing, torn over the fate of convicted Oklahoma City bomb plotter and murderer Terry Nichols. The jury deadlocked after three days of deliberations. And that means Terry Nichols escapes once again the death penalty.

Welcome back. We're ON THE STORY.

CROWLEY: Susan, let me ask you -- it seems to me this is a guy who is already serving a life term without parole. The only reason that the prosecutors could have brought him to this case was to try to get the death penalty, and they didn't.

Was this -- did they just miscalculate the jury? What were they thinking here?

CANDIOTTI: Boy, that's hard to say, because, you know, they -- the evidence, having covered both federal trials of Timothy McVeigh and Terry Nichols, was pretty much the same in this case. Obviously juries and the selection of a jury can make all the difference in the world. And this case was all about trying to felt the death penalty for Terry Nichols. And also, to get murder convictions for the state of Oklahoma on those 161 victims that were not named in the original federal indictment.

But it's hard to get inside the heads of the jurors because so far, none of them will talk about how -- why they were deadlocked, over what kind of evidence, why there was a dispute. And they were split almost down the middle, seven for death, five for life.

NEISLOSS: So does this mean it's the end of the line now for Terry Nichols? It certainly would seem to be. But is there any more -- anything left that can be done? And also, is there anyone else out there? Are there more suspects or more cases? Or is this it, as far as the bombing goes? CANIDOTTI: Legally, this should be the end of the line for him, of course, because he could not be convicted for a third time. There was a difference this case because there were different victims for whom he was being tried.

Now, in terms of whether there were other unknowns involved. Of course, that remains to be the case stated in the original indictment against both McVeigh and Nichols. And in this case, the defense kept saying, Terry Nichols, and Timothy McVeigh weren't the only ones involved. There were others who were involved. And they kept saying they were going to talk about it, but they never really made much of a case about that.

Perhaps that made a difference to this jury. Perhaps not.

STARR: Susan, remind everybody -- because it's been so many years now, of course -- why the state of Oklahoma wanted to pursue this trial. Why the state charges -- and how do the people of Oklahoma --- besides of course the victims families -- how do they feel about going through all of this again?

CANDIOTTI: Well, make no mistake about it. A key purpose of this trial was to make sure that Terry Nichols got the death penalty, because after the federal trial, a lot of victims and victims' families, felt they had been short-shrifted, because he had been convicted only of involuntary manslaughter in that case, primarily. And so this time, the victims' families of the others who were not part of that federal trial -- remember, in the federal trial, he was only on trial for the deaths of the eight federal law enforcement agents. And so that's why they wanted to pursue this case.

And in that sense, they were successful. He was convicted of first-degree murder on 161 other countries, including a fetus.

HAYS: Susan...

CANDIOTTI: Now, in terms of the state of Oklahoma -- right, I was just going to say, 70 percent of the people who live here were opposed to this trial, thought it was a waste of time and money. And by the way, this cost, probably when all is said and done, around $5 million.

HAYS: I was just going to say, speaking of pursuing issues, Susan Candiotti, you intrepid ON THE STORY correspondent, you pursued Terry Nichols and got a response from him, I understand?

CANDIOTTI: Well, certainly tried to anyway.

No, he didn't say anything. I yelled out, do you feel as though you -- now that you've escaped death for the second time, are you relieved? He said nothing. But standing next to me, watching him walk out of the courthouse in handcuffs, was the mother of the victim of the bombing, and she took that opportunity to yell out to him -- quote -- "Go to hell, Terry Nichols."

CROWLEY: Susan, what about inside the courtroom, when they came back with the non-death penalty verdict? What was it like inside? CANDIOTTI: Well, of course, you couldn't hear a pin drop, and this judge really ran a very serious-minded courtroom. There were no outbursts. He wouldn't have stood for that.

However, after the jury left and after the defense attorneys walked out of the room, and Terry Nichols' family walked out of the room, the victims' families, as described to us by our courtroom sketch artist, stood outside the well of the court room as Terry Nichols was being re-handcuffed and they were putting the bulletproof vest back on him, and they stood almost in a semicircle behind him.

He didn't face them. He chose to face the wall. The judge saw this and put a stop to it, and ordered the victims' family, and told the prosecutors to have them leave the courtroom.

NEISLOSS: Susan, I have to ask you, another story we thought we have already heard quite a bit about, but you had to cover, 10 years since the O.J. Simpson trials. What did you see?

CANDIOTTI: Well, of course, after that trial, five years ago, as we all recall, O.J. Simpson decided to leave California and move to Florida. So of course, the obvious question is, What's been happening to him? What's his life been like? And I spoke with his lawyer at great length about that.

He plays golf. He writes. But in terms of finding his wife's real killer, as he said he would, they haven't had any real leads. And so, therefore, nothing new on that end.

NEISLOSS: Well, from law and order, to diplomacy and law and order. And how the Bush administration won a victory at the U.N. this week on Iraq. We're back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN NEGROPONTE, U.S. AMBASSADOR TO THE U.N.: We acknowledge an important milestone. By June 30, Iraq will reassert its sovereignty, a step forward on the path towards a democratically-elected government.

(END VIDEO CLIP)

NEISLOSS: U.S. Ambassador to the United Nations John Negroponte on a diplomatic win for the U.S. on a resolution on Iraq that marks the end of the occupation. John Negroponte, of course, will go on from the U.N. to a tougher post. He becomes the U.S. ambassador in Iraq.

We're back ON THE STORY.

STARR: Liz, even for those of us who cover Iraq every day of our lives, it's getting confusing.

The U.N. resolution, what now does it really mean for the situation on the ground in Iraq, June 30th? And what does it mean for the United Nations' role in Iraq?

NEISLOSS: Well first of all, I have to say you have to take a look at what has happened in Iraq today. There was a giant wake-up call with the assassination of the deputy foreign minister in Iraq. I think you have to see that the ink is just dry on this resolution, and this piece of paper will only be as good as the security situation allows it to be in Iraq.

What it means, on paper, is that the occupation formally comes to an end. It means that Iraq can kick out the multinational U.S.-led troops whenever they want to. It's not expected that they will do so in the near term.

But it is also intended to be a signal to the Iraqis that the situation that they have seen is going to come to an end, that they will regain their sovereignty. There's a lot of -- there's going to be a lot of collective breath-holding, I think you have to say, that when June 30 comes, that things will not melt down in Iraq, that there will eventually be some kind of improvement.

HAYS: Was just maybe a year and a half ago that it seemed that the Bush administration didn't want to deal with the U.N. because they felt the U.N. didn't have enough teeth. Now it being looks like they think there's enough teeth in this agreement. Are there?

NEISLOSS: Well, it's a lot of -- it's a lot of factors. It was very interesting to hear George Bush this week say, "We trust the U.N."

George Bush need the U.N. at this point. The U.N. role will be to help on elections, to help move the political process forward, to help in other areas, humanitarian, human rights. But George Bush needed to get the international community back together on Iraq because he needs them as well. And you do expect to see potentially some contributions, maybe financial. But certainly not the rush for troop contributions that perhaps at one point the Bush administration had hoped they would get.

The U.S. ambassador right after the resolution was passed came out and said, Look, we don't expect a flood of troop contributions. And certainly, so far this week, that seems to be the case.

CANDIOTTI: What about the U.N. inspectors? Are there -- are they finding anything new as they review their records, or look at anything else? And how will they be working with U.S. troops on the ground?

NEISLOSS: Well, that's a very interesting question because the U.N. inspectors, the one who used to be on the ground combing for weapons, have not been in Iraq since the war, and the U.S. is in charge of the inspections process.

This week, the United Nations inspectors came out with a report that basically said there are some interesting and very strange things that we're seeing in Iraq. They are not in the country, but they're able to look at aerial photos. They say there are two sites that they know of, sites where dual dual-use equipment has been stored. Those two sites have been razed. There is nothing left. So they're saying, what happened to this equipment? Where did it go? Why were these sites razed?

Another sort of strange tale, the weapons inspectors have seen missile engine parts turning up in scrapyards. There were parts that turned up in Jordan, parts that turned up in the Netherlands. When the scrapyard first contacted the Dutch government, they sent in an official who started taking pictures, and these photos were sent back to the U.N. And one U.N. official said to me, We looked at this and said, Hey, that's a number that we put on that missile part. We tagged this back in 1996.

So they're really puzzled over why this is leave the country. There's a huge scrap-metal trade out of Iraq and what does it all mean?

CROWLEY: Liz, you know, a year ago, the U.N. didn't want to deal with George Bush and George Bush didn't want to deal with the U.N.

How did we get to this point? Who gave in, who got better? Is it this just in everybody's interest? What brought us to finally getting a resolution?

NEISLOSS: I think you have to say it's in everybody's interest. I think that nobody wanted to stand in the way of formalizing the end of the occupation. And certainly, the reality on the timetable is that that's what has to happen now.

I think that there genuinely was a change at the U.N. when it came to the negotiating this time. The French, the Germans, the Chinese -- in particular, the French and the Germans, who were very vocal, very resistant to change, said the U.S. really did try to make an effort. They did take some amendments on board.

But I think the reality for the U.S. was, in this negotiation, they wanted a signed piece of paper. They wanted something that they could wave at the G8, and they want to really move the process forward.

HAYS: Interesting to see if it's a piece of paper that just gets waved, or if it does move that process forward.

Well, from Iraq to how this week has turned attention back to what many people called Reaganomics. I'm back on the financial story, past and present, in a moment.

But first, to Atlanta, and what's making news at this hour.

NGUYEN: Back to ON THE STORY after these news headlines.

The body of former President Ronald Reagan was buried last night on the grounds of his presidential library at Simi Valley, California. The flag was removed from Reagan's casket, folded, and presented to his widow, Nancy. That after an artillery battery fired a salute and a bugler sounded taps. Republican Senator John McCain keeps saying it: He will not be the vice presidential candidate on a Democratic ticket. And reports today say McCain has told his colleague John Kerry that he will not change his mind.

A top Iraqi diplomat is dead, the victim of a drive-by shooting outside his home in Baghdad. Bassam Salih Kubba was one of four deputy foreign ministers. He had just returned to Iraq from the U.S.

Also in Iraq, an employer reports his seven Turkish civilian contractors being held hostage there has been released. Three of the Turks are seen in this video taken earlier with their captors. But three people taken hostage earlier this week, a Lebanese citizen and two Iraqi co-workers, have been found shot to death.

We could learn as early as today whether Ayman al-Zawahiri is likely the voice on an audiotape broadcast Friday in the Arab world. The voice, claiming to be the Osama bin Laden lieutenant, accused Americans of not really wanting democracy and freedom in the Arab world. U.S. intelligence officials are working to determine the authenticity of this claim.

Those are the stories at this hour. I'm Betty Nguyen. ON THE STORY continues right after this break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: I have my veto pen drawn and ready for any tax increase that Congress might even think of sending up. And I have only one thing to say to the tax increasers, Go ahead, make my day.

(END VIDEO CLIP)

HAYS: Some people can carry off a Clint Eastwood moment much better than others. The attention paid to former President Reagan this week refocused attention on his economic policies.

Welcome back. We're ON THE STORY.

NEISLOSS: Kathleen, so much of what happened this week was, to borrow another journalist's phrase, was filtered through "Gipper- colored lenses."

HAYS: Well put.

NEISLOSS: So tell us, or remind us, what were Reagan's economic policies?

HAYS: Well, you know, he came in, really, with four very simple pillars -- cut taxes, cut government spending, cut government regulation, cut inflation. And I think, really, the cornerstone of this really was his tax cuts. But I think we have to set the stage a little bit, because so much of what Reagan instituted we take for granted now in terms cutting taxes, tolerating big deficits. When he came into office, he inherited a marginal tax rate of 70 percent. The supply-siders say that he was actually falling in the footsteps of John F. Kennedy, who cut the top tax rate from 90 to 70 percent, when he said that rate had to drop.

Of course, the debate enters now as to what that really led to. Certainly, most everybody agrees it did help the economy grow. But did it help the economy grow because we all bought a lot more stuff or because it did spur the entrepreneurs or investment? That's just part of the debate that the Reagan legacy leaves.

CROWLEY: Wasn't it -- I mean, the inflation rate -- and I can't remember now what it was, but he really did bring it down over the course of those eight years.

When you look back and you talk to minorities, when you talk to a number of low-income people, they have a very different view of Ronald Reagan. And I was wondering as I talked to some of those people, is this a perception that's carried on, or did some of those policies fall heavily on those who could least afford it?

HAYS: That's a very interesting question.

Let me say first on the inflation front, that my -- as someone who has covered the Federal Reserve, really, since I started in this business about 20 years ago, and started here covering Paul Volcker, a legendary fed chairman who, granted brought -- helped bring that inflation rate from 13.5 percent down to 4 percent over the course of the Reagan years -- but was appointed by Jimmy Carter, remember that. And it was the Draconian interest rates, up near 20 percent, that helped defeat Carter and bring Ronald Reagan into office.

But people say at least Reagan was willing to tolerate those draconian policies as well and he was behind the low inflation. So that's one thing.

In terms of how everyone from African-Americans, to union people, to just generally lower-income people, felt then, and maybe feel now, looking back is -- you know, one of the things Reagan also stood for was attacking many of these entitlement programs. But again, the legacy he was inheriting was the Great Society of LBJ. He was not the only person who felt that entitlements were being wrongly used. Too many people were getting -- people who should not receive them.

There was also the very famous incident when the air traffic controllers went on strike and Reagan said, you better not or I'll fire you. It's illegal to strike in that kind of job. Well, he fired them. And again, many people felt he had too much sympathy for the investor, entrepreneurial, wealthy class and not enough for the poor folks.

I think Reagan felt that he was really doing something best for everyone, because he felt that the growth of government spending did get in the way of the dynamic investing part of the economy.

And I'll tell you, there's so many people on Wall Street this week, looking back very fondly, because they felt Reagan really helped start the great bull market that lasted from about 1982 until almost the year 2000.

STARR: But Kathleen, when you look back at the legacy after eight years in office, what's the reality on a couple of his pillars: cutting government spending, reducing the size of the federal government and taxes? How did it wind up?

HAYS: He was not able to reduce the size of government spending. They did leave office with marginal tax rates on income tax lower.

One of the things interesting about Reagan is he started raising taxes. He said, Make my day you tax cutters, but then he went ahead and had to raise taxes. But some people say that's something that the current president could learn from, that President Reagan did know how to compromise, he did know how to make a deal to get what he needed.

And again, his deficit is really the record deficit. His -- Reagan's deficit at one point, 6 percent of our nation's economy. Bush's deficit, right now, about 4 percent. But it's interesting how we got used to those big deficits under the Reagan years.

I think -- there's a debate though -- would Reagan -- Reagan didn't really approve of the big deficits. He did not really think that deficits didn't matter. That's what some people say. He just felt that it was so important to build up a defense budget as part of his move to help bring down communism that it was a price he was will to pay. His supporters today say the deficit maybe was a failure, but that bringing down communism, the wall, helped create the peace dividend that helped us float through the years of the '90s with great prosperity, years that the Democratic administration enjoyed.

STARR: Well, everyone continues to watch that legacy this past week.

From the financial to the military world, and the deadly challenges for U.S. forces in Iraq in coming weeks, I'm back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I don't expect more troops from NATO to be offered up. That's an unrealistic expectation. Nobody is suggesting that. What we are suggesting is for NATO perhaps to help train.

(END VIDEO CLIP)

STARR: President Bush Thursday at the G8 summit in Georgia, talking about two vitally important challenges for the U.S. -- getting more international support in Iraq and building up Iraq's own military forces.

Welcome back. We're ON THE STORY.

CANDIOTTI: Barbara, before we get into Iraq, I must ask, what was the Pentagon's reaction to President Reagan's death? After all, he did so much to build up the Defense Department.

And what about the reaction of those who were able to participate in the ceremonies?

STARR: Oh, Susan, I could talk -- you know, I could spend the rest of the hour talking about this. Because it was an incredible, incredible week.

I'm going to start by talking about some personal moments. I sat down with Secretary of Defense Donald Rumsfeld to talk about his remembrances of the Reagan administration. People may remember that Secretary Rumsfeld was actually President Reagan's Middle East envoy after the Beirut crisis, after the Marines were killed.

Sat down to talk to the secretary. And out of the clear blue sky, for the first time, he looked at me and he said, You know, my own father died of Alzheimer's. I said, oh, I didn't know that sir. Would you be will to talk about it? Because that was not the terms of the interview. He said yes. We turned the TV camera on. The secretary began to recount the struggle his father had so many years ago with Alzheimer's.

Now, Don Rumsfeld is just about the toughest guy in Washington these days. And the secretary of defense was suddenly no longer the secretary of defense. He was a man of 70 years himself recounting the death of his father, 25 years ago, from Alzheimer's, the pain that his own family felt at this. And clearly, the secretary -- his own -- his own mind, back in those years when his father was so sick, the secretary of defense, overcome by personal emotion in recounting this. And we did turn the TV camera off so the secretary could privately remember his father and his own family's struggle with Alzheimer's.

And I add, Kathleen, if the secretary's in his office this morning, watching this program, the reason I am telling this -- it was the most powerful testament I have personally ever seen to the pain that Alzheimer's causes a family.

HAYS: But, you know, I think this shows something about this week. And, as you said, at the Pentagon, and as Susan reminded us -- and this defense build-up under Reagan years was such an important thing, the backing for the military, the return to patriotism, the first time for a long time when he said that Vietnam was a shining moment for the country and people were shocked. I mean, Reagan -- again, we just have to remember the time he was in.

But within the Pentagon, I would think that this was such an emotional week. And that's what Don Rumsfeld was experiencing -- not just this reminder of his father, but so many emotions came up for people in so many different ways this week, but I would think especially for the military. STARR: Well, yes, and including, as Candy saw out in Simi Valley at the library, when there were young soldiers participating in the funeral procession, in the very highly precise ceremonies, young soldiers, very overcome.

I talked to the young soldier who rode the middle horse in the caisson. The young man on that middle horse. He was 20 years old -- is 20 years old. He'd been with the old guard unit for one year, and this young man had been in 300 full honors military funerals at Arlington. And all he was focused on was not the sadness, but offering and being able to be in this national historic event of serving a former commander in chief. Very moving stuff.

NEISLOSS: Barbara, attention next week is almost certainly going to move from Reagan, back to what really will overwhelm the Pentagon, and that is Iraq.

What are you hearing about the efforts to get NATO on board in anyway to help out with troops, or in any kind of training role?

STARR: Well, I think what we have heard from the G8 summit is not much of an indication that the Bush administration expects to see NATO participate in peacekeeping, in -- if you will, or the post- occupation force, but more of an indication, they hope at least, that NATO will help train those Iraqi security forces.

All hopes now on that, but a lot of concern that there will be much more violence before all of this is over.

HAYS: Concern we all share.

Well, watching closely events in Iraq, of course, President Bush. Elaine Quijano is in Crawford, Texas, with the president. And more with Candy Crowley on the national farewell to Ronald Reagan.

(BEGIN VIDEOTAPE)

ANNOUNCER: Candy Crowley is CNN's senior political correspondent. She's been with the network since 1987. The National Press Foundation honored her with the 1998 Dirksen Award for distinguished reporting on Congress. She received the 1997 Joan Shorenstein Barone Award for excellence in journalism for coverage of the Bob Dole presidential campaign.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: Ronald Reagan will go down in history as a great American president because he had a core set of principles from which he would not deviate.

(END VIDEO CLIP)

QUIJANO: President Bush praising President Reagan after the G8 summit in Sea Island, Georgia.

President Bush spent last night here in Texas, and later today, will celebrate his father, George W. -- H.W. Bush's, 80th birthday, with celebrations here in Texas.

Welcome back. We're ON THE STORY.

HAYS: Well, you know, Elaine, I really wonder, you know, how much this does resonate. Ronald Reagan's legacy -- I'm sure that the current President Bush would like to capture that. And I want Candy to comment on this too. Because, again, Candy, you go back a long way covering this. And -- you know, really put it in perspective from both of you -- Elaine.

QUIJANO: Well, it's interesting, Kathleen.

I can tell you just from speaking to some of the people, where I was stationed earlier this week, out on the West Lawn in front of the Capitol, people drew comparisons both to this current president and to Ronald Reagan, saying that they both, in their minds, represented men to held firm to their beliefs, men who held firm to their convictions, people that they described as being moral, courageous, righteous men.

So those are the kinds of terms that people who at least turned out -- remember, some 104,000 people turning out at the U.S. Capitol Rotunda to view the president's casket -- drawing comparisons to this current president and to President Reagan, you know, using them in the same sentence, finding the same characteristics in this president.

HAYS: Candy is that fair?

CROWLEY: Sure. You know, I said earlier, I don't remember a Republican candidate that didn't try to touch that Reagan mantle because he is such an icon in the party.

The comparisons to Bush and Reagan went on long before Ronald Reagan died this weekend. It came up in the campaign that he was -- that this Bush was more Reagan than he was Dad Bush. So I -- and you know, I love to look at anything through a political prism. I can almost always make a connection to politics.

But, you know, by the time next week rolls around, we are on to something else. I just don't see in the end that, come November, people will somehow be moved by the passing of Ronald Reagan to vote one way or the other. I just think there are too many other burning issues on the top of the plate.

I want to mention one thing that went on that I thought was really interesting. You know, when we watched the Washington portion of the funeral, they were saying good-bye to a president, to a leader of the free world, to a commander in chief. And it was pretty -- not emotionless -- that's the wrong word. But free of the kind of funereal, there was more pageantry, that there was the funereal feel.

The one exception was George Bush, the dad. Let's take a listen.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: As his vice president for eight years, I learned more from Ronald Reagan than from anyone I encountered in all my years of public life.

(END VIDEO CLIP)

CROWLEY: And remember, this is -- this is the Bush that had a lot of policy differences with Ronald Reagan.

So, you know, I think it's very hard in the end to draw a whole lot of conclusions that this, in fact, will affect politics in the future.

NEISLOSS: Candy, this is very difficult week, obviously, for any candidate who is trying to decide, I guess, how to balance the act, while the Reagan funeral is going on -- and I'm obviously referring to John Kerry. What did this week do for him? What did it mean for him?

CROWLEY: Well, it gave him a couple things.

First of all, some time to do some administrative work because he's complaining a lot that he never gets to get policy briefings and that sort of thing.

Second of all, he quietly -- they managed to put an end to that McCain rumor, which I thought was a really interesting to come out. On the day that they ultimately buried -- the bicoastal funerals for Ronald Reagan, a leak story came out that John McCain had actually had a conversation with Kerry about how, saying -- Look, I'm not going to be your vice presidential candidate.

CANDIOTTI: Elaine, what is the president's schedule for the rest of the weekend?

QUIJANO: Well, Susan, after tackling some pretty serious issues, serious occasions, first with G-8, and of course yesterday being a very solemn occasion, the president gets to have some fun actually, celebrating with his father his 80th birthday. And we know that the elder Bush has done this before, but he'll be celebrating by jumping out of a plane. Shouldn't come as a surprise to people. The navy veteran has done this before. And who knows? Perhaps may even do it again for his 85th.

But that is what is on the president's schedule, a weekend of celebration here in Texas.

STARR: And many of us, indeed, will be watching President Bush, wishing him our very best. The father, President Bush.

We're back ON THE STORY after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: Track star Marion Jones was in the headlines this week. What's her story? More coming up. (END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Track star Marion Jones came home from the 2000 Sydney Olympics with three gold medals. What's her story? She's been under investigation by the U.S. anti-doping agency and a letter this week asked follow-up questions. But other star athletes were informed of formal proceedings that could bar them from this summer's Olympics. Marion Jones already has threatened to sue if kept off the team. The outcome may determine her own future and because of her fame, credibility of the anti-doping agency too.

(END VIDEOTAPE)

STARR: Well, Kathleen, I suspect we both feel the same way. So much of Washington, New York, the stock market, the country has been focused on the funeral for President Reagan this whole past week.

Starting Monday it's sort of back to -- you know, with all respect, back to regularly scheduled programming, the war in Iraq certainly will be getting attention again, the transition...

HAYS: Well, and, you know, I think the week did feel just kind of off. You know, people came back and the markets were kind of volatile. Nothing really happened. Having -- you know, having Friday off, basically because the stock market closes.

Alan Greenspan, confirmation hearing on Tuesday. That could be kind of interesting on Capitol Hill.

STARR: That will be interesting.

As Candy Crowley was saying in Los Angeles too, presidential election back on the front burner.

HAYS: There you go. Well, a lot -- a lot's going to be the front burner.

Thank you to my colleagues. Thank you for watching ON THE STORY. We'll be back next week with these front-burner issues.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on "D-Day: A Call to Courage."

Coming up right now, a check of the top stories.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired June 12, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: Here's a look at headlines.
A top Iraqi diplomat is dead, the victim of a drive-by shooting outside his home in Baghdad. Bassam Salih Kubba was one of four deputy foreign ministers. He had just returned to Iraq from the U.S.

Also in Iraq, their employer reports that seven Turkish civilian contractors being held hostages have been released. But three people taken hostages earlier this week, a Lebanese citizen and two Iraqi co- workers, have been found shot to death.

The jurors in Oklahoma could not agree on a penalty, so the life of Terry Nichols, convicted of 161 counts of murder in the Oklahoma City bombing, will be spared for a second time. He's already serving one life sentence and will now get another one.

And from Iraq, the Associated Press is reporting that the U.S. military will release more prisoners from Abu Ghraib prison, the facility at the center of the abuse scandal. Another 650 detainees are now due to be released on Monday. There have been four major prisoner releases since the scandal broke two months ago.

That's a look at the top stories at this hour. I'm Betty Nguyen. Now back to ON THE STORY.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Barbara Starr, on the story of national mourning for a former president, amidst fresh concerns over war in Iraq.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Los Angeles, ON THE STORY of a week so many people spent remembering Ronald Reagan, honoring him and watching the ceremonies of his state funeral.

LIS NEISLOSS, CNN SR. U.N. PRODUCER: I'm Liz Neisloss in New York ON THE STORY of a Bush administration success on an Iraq resolution. Will it just be another piece of paper?

ELAINE QUIJANO, CNN CORRESPONDENT: I'm Elaine Quijano in Crawford, Texas. I'll be back later ON THE STORY of President Bush, combining tributes to a former president with meetings with world leaders.

SUSAN CANDIOTTI: I'm Susan Candiotti, in McAllister, Oklahoma, ON THE STORY of a jury deadlocked over the fate of convicted Oklahoma City bomb plotter and murderer Terry Nichols.

KATHLEEN HAYS, CNNfn CORRESPONDENT: And I'm Kathleen Hays, ON THE STORY of events this week refocused attention on so-called Reaganomics.

Also, coming up, will events of this week have any political impact? And does President Bush benefit?

And 10 years since the O.J. Simpson murder case. He was acquitted. What's his life now?

E-mail us at onthestory@cnn.com.

Now straight ahead to Candy Crowley and a national farewell.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When the sun sets tonight off the coast of California and we lay to rest our 40th president, a great American story will close.

(END VIDEO CLIP)

CROWLEY: And a great American end to that story. That, of course, President Bush, at ceremonies yesterday, at Washington's National Cathedral. A week of pomp and circumstance, but also a week of fond memories, very personal memories, as well as some things for the history books, some really powerful images.

I have to tell you, out here in California, laid to rest, finally, ladies, last night, at his library in Simi Valley. You really -- you got the spine-tingling stuff last night at that ceremony. Just absolutely picture perfect. Even in his Hollywood days, Ronald Reagan couldn't have imagined this.

HAYS: Candy, I was struck throughout the week at Nancy Reagan's composure, a very powerful presence. I understand that last night in the final moments it became very, very difficult for her, as it becomes for many widows laying their husbands to rest.

CROWLEY: And -- true. And what happened at the ceremony last night was that -- in front of about maybe 700 or so people -- and these were close friends, longtime friends -- we had the ceremony. And then the family, in those pictures you just saw, went sort of out of sight, at least from the people at the funeral. Obviously, the cameras were there.

And boy, once they have folded the flag and gave it to her, and she went up to touch that casket for a final time, as she has so many times before, it was really hard for her to tear away. And I was thinking so many people related to Ronald Reagan thought, you know, they loved his story, it was an average American who came out of near poverty at any rate in Illinois and made big in Hollywood, and then to Washington.

And I thought that this is also a story that that generation, particularly, is now going through. So many widows know that those first couple of days, when she seemed so stoic, and those are almost the shock days. And then when it came to that final good-bye, when her kids were around her, you know, almost feel them saying, "Come on, mom, Come on mom," you know, "We've got to go." And it was -- that was a very, very hard moment, and the first time I really saw her not having quite control over herself.

NEISLOSS: George Bush spent a lot of time this week it seemed, and his administration officials, trying to wrap Bush, maybe, in some of this aura, some of this Reagan legend.

Candy, you covered the Reagan White House. How accurate are these comparisons? What do you see?

CROWLEY: Well, there -- you know, yes, there are comparisons. There are certainly that sort of Western cowboy thing that they both had going.

You know, history hasn't judged George Bush yet. And it's hard to remember, but at the time Ronald Reagan was in office, he was pretty controversial. I mean, he put the conservative back into the Republican Party. His tax-cutting, program-cutting, building up the defense were very controversial. They fought tooth and nail. He did it with such a smile on his face.

Look, he is clearly a Republican icon. I haven't covered a campaign since Ronald Reagan that the republican didn't say, hey, I'm a Ronald Reagan Republican. So obviously, this is clearly someone that George Bush wants to lay claim to, as all Republicans do.

But you also saw with John Kerry, they each chose a part of the Reagan legacy. Bush saying, You know, he was a determined man, Ronald Reagan. He stuck with what he believed in, which is very much like George Bush. And then you heard John Kerry say, You know, Ronald Reagan, even when he was breaking his hearts, did it in such a nice way, and it was such a lovely time in Washington.

So they each sort of pointing to parts of the Reagan legacy that they want to amplify.

STARR: You know, Candy, when you talk about legacies -- still, when I watched all of this on TV this week, it struck me that both on the East Coast and West Coast, this was a real turning of the page of history. At that service at the National Cathedral, it almost seemed like it was the last great summit of the cold war, Reagan, Thatcher, Gorbachev. This group will never be together again.

And then it moved out to the West Coast, to the family funeral, the friends of Hollywood, and the great names that ran that town in the 1950s: the Sinatra family, the Kirk Douglas family, a turning of a page of Hollywood history, too.

I just wonder if Americans -- so many born after or were children during the Reagan administration -- if they really grasp this real turning point of history that maybe some of us of a certain age feel a little more deeply. CROWLEY: Well, certainly, their parents have told them. We know that just by being out there on the roads, where you see so many young children. We saw those Boy Scouts saluting -- saluting the president at his -- where the coffin lay in state in the Capitol.

You know, I think that anytime there is a death of someone of this magnitude or national and international standard, everybody measures their own life. It's a milepost. And this is certainly one of the final mileposts of that World War II generation, and on the national -- international level of the Margaret Thatchers and the Brian Mulroneys.

And interesting to me, I was talking to one of my 20-something sons. And they said, Oh, mom, this is so sad about Ronald Reagan. And I said, Well, you know, he's 93. Great life, full life. And they said, Yes, but they said, you know, he was my whole childhood. So for that next sort of 20-something generation, and even those whose mother, when they weren't with him, you know, when they weren't with them, you know, were with Ronald Reagan, they do remember. This is the first president they can remember. So for them it's a passage of time. And I think that's true anytime we have something of this magnitude on a national level and we don't have it very often.

CANDIOTTI: Candy, because Nancy Reagan really built her life around her husband and understandably, especially so, taking care of him over the past 10 years, what do you suspect her life will be like from here on out?

CROWLEY: You know, who knows?

There were so many images of Nancy Reagan this week and so many people commented on her great dignity. There was a moment when she left paint Point Mugu to fly with the coffin back to Washington for it to lay in state and for the state funeral where she climbed up the steps of that plane, which is not Air Force One because a living president was not on it. But it was nonetheless -- there she was, standing on the top of this -- the steps of the plane, kind of waving. She looked so tiny. She looked so alone, because we were so used to seeing her with Ronald Reagan. And suddenly, she looked very small and very alone.

I'm sure as, again, any sort of widow can tell you, that these are moments of great loneliness. But she is one tough woman. Everyone will tell you that. Despite her apparent physical frailty, she's very strong.

But, you know, on the other hand, we've heard nothing but tales of the very -- the 50-year plus relationship. The last 10 years, she has guarded his memory very fastidiously, kept him protected, as she did during the White House. Most people around her, and when you talk to them, will say, thinks she will continue on protecting his legacy, that there will be work for the Ronald Reagan library, doing that kind of thing.

Now she's gotten into the stem cell research debate and taken a position, obviously, that is different from President Bush's. But how political she'll be, I think, remains pretty unclear, both because of her advanced age and because her politics were always Ronald Reagan. They weren't -- didn't ever strike me as republican. They strike me as her husband.

CANDIOTTI: Thank you, Candy, for your poignant observation. We'll talk more later about Ronald Reagan and the past week.

But just ahead, jury deliberations. A jury deadlocked over the fate of Oklahoma city bomb convicted murderer and planner Terry Nichols.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How many people do you have to kill before you get the death sentence? Is it 500? 1,000? I don't know. I'd just like to ask them that question.

(END VIDEO CLIP)

CANDIOTTI: Survivors and victims' families of convicted -- of the Oklahoma City bombing, torn over the fate of convicted Oklahoma City bomb plotter and murderer Terry Nichols. The jury deadlocked after three days of deliberations. And that means Terry Nichols escapes once again the death penalty.

Welcome back. We're ON THE STORY.

CROWLEY: Susan, let me ask you -- it seems to me this is a guy who is already serving a life term without parole. The only reason that the prosecutors could have brought him to this case was to try to get the death penalty, and they didn't.

Was this -- did they just miscalculate the jury? What were they thinking here?

CANDIOTTI: Boy, that's hard to say, because, you know, they -- the evidence, having covered both federal trials of Timothy McVeigh and Terry Nichols, was pretty much the same in this case. Obviously juries and the selection of a jury can make all the difference in the world. And this case was all about trying to felt the death penalty for Terry Nichols. And also, to get murder convictions for the state of Oklahoma on those 161 victims that were not named in the original federal indictment.

But it's hard to get inside the heads of the jurors because so far, none of them will talk about how -- why they were deadlocked, over what kind of evidence, why there was a dispute. And they were split almost down the middle, seven for death, five for life.

NEISLOSS: So does this mean it's the end of the line now for Terry Nichols? It certainly would seem to be. But is there any more -- anything left that can be done? And also, is there anyone else out there? Are there more suspects or more cases? Or is this it, as far as the bombing goes? CANIDOTTI: Legally, this should be the end of the line for him, of course, because he could not be convicted for a third time. There was a difference this case because there were different victims for whom he was being tried.

Now, in terms of whether there were other unknowns involved. Of course, that remains to be the case stated in the original indictment against both McVeigh and Nichols. And in this case, the defense kept saying, Terry Nichols, and Timothy McVeigh weren't the only ones involved. There were others who were involved. And they kept saying they were going to talk about it, but they never really made much of a case about that.

Perhaps that made a difference to this jury. Perhaps not.

STARR: Susan, remind everybody -- because it's been so many years now, of course -- why the state of Oklahoma wanted to pursue this trial. Why the state charges -- and how do the people of Oklahoma --- besides of course the victims families -- how do they feel about going through all of this again?

CANDIOTTI: Well, make no mistake about it. A key purpose of this trial was to make sure that Terry Nichols got the death penalty, because after the federal trial, a lot of victims and victims' families, felt they had been short-shrifted, because he had been convicted only of involuntary manslaughter in that case, primarily. And so this time, the victims' families of the others who were not part of that federal trial -- remember, in the federal trial, he was only on trial for the deaths of the eight federal law enforcement agents. And so that's why they wanted to pursue this case.

And in that sense, they were successful. He was convicted of first-degree murder on 161 other countries, including a fetus.

HAYS: Susan...

CANDIOTTI: Now, in terms of the state of Oklahoma -- right, I was just going to say, 70 percent of the people who live here were opposed to this trial, thought it was a waste of time and money. And by the way, this cost, probably when all is said and done, around $5 million.

HAYS: I was just going to say, speaking of pursuing issues, Susan Candiotti, you intrepid ON THE STORY correspondent, you pursued Terry Nichols and got a response from him, I understand?

CANDIOTTI: Well, certainly tried to anyway.

No, he didn't say anything. I yelled out, do you feel as though you -- now that you've escaped death for the second time, are you relieved? He said nothing. But standing next to me, watching him walk out of the courthouse in handcuffs, was the mother of the victim of the bombing, and she took that opportunity to yell out to him -- quote -- "Go to hell, Terry Nichols."

CROWLEY: Susan, what about inside the courtroom, when they came back with the non-death penalty verdict? What was it like inside? CANDIOTTI: Well, of course, you couldn't hear a pin drop, and this judge really ran a very serious-minded courtroom. There were no outbursts. He wouldn't have stood for that.

However, after the jury left and after the defense attorneys walked out of the room, and Terry Nichols' family walked out of the room, the victims' families, as described to us by our courtroom sketch artist, stood outside the well of the court room as Terry Nichols was being re-handcuffed and they were putting the bulletproof vest back on him, and they stood almost in a semicircle behind him.

He didn't face them. He chose to face the wall. The judge saw this and put a stop to it, and ordered the victims' family, and told the prosecutors to have them leave the courtroom.

NEISLOSS: Susan, I have to ask you, another story we thought we have already heard quite a bit about, but you had to cover, 10 years since the O.J. Simpson trials. What did you see?

CANDIOTTI: Well, of course, after that trial, five years ago, as we all recall, O.J. Simpson decided to leave California and move to Florida. So of course, the obvious question is, What's been happening to him? What's his life been like? And I spoke with his lawyer at great length about that.

He plays golf. He writes. But in terms of finding his wife's real killer, as he said he would, they haven't had any real leads. And so, therefore, nothing new on that end.

NEISLOSS: Well, from law and order, to diplomacy and law and order. And how the Bush administration won a victory at the U.N. this week on Iraq. We're back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN NEGROPONTE, U.S. AMBASSADOR TO THE U.N.: We acknowledge an important milestone. By June 30, Iraq will reassert its sovereignty, a step forward on the path towards a democratically-elected government.

(END VIDEO CLIP)

NEISLOSS: U.S. Ambassador to the United Nations John Negroponte on a diplomatic win for the U.S. on a resolution on Iraq that marks the end of the occupation. John Negroponte, of course, will go on from the U.N. to a tougher post. He becomes the U.S. ambassador in Iraq.

We're back ON THE STORY.

STARR: Liz, even for those of us who cover Iraq every day of our lives, it's getting confusing.

The U.N. resolution, what now does it really mean for the situation on the ground in Iraq, June 30th? And what does it mean for the United Nations' role in Iraq?

NEISLOSS: Well first of all, I have to say you have to take a look at what has happened in Iraq today. There was a giant wake-up call with the assassination of the deputy foreign minister in Iraq. I think you have to see that the ink is just dry on this resolution, and this piece of paper will only be as good as the security situation allows it to be in Iraq.

What it means, on paper, is that the occupation formally comes to an end. It means that Iraq can kick out the multinational U.S.-led troops whenever they want to. It's not expected that they will do so in the near term.

But it is also intended to be a signal to the Iraqis that the situation that they have seen is going to come to an end, that they will regain their sovereignty. There's a lot of -- there's going to be a lot of collective breath-holding, I think you have to say, that when June 30 comes, that things will not melt down in Iraq, that there will eventually be some kind of improvement.

HAYS: Was just maybe a year and a half ago that it seemed that the Bush administration didn't want to deal with the U.N. because they felt the U.N. didn't have enough teeth. Now it being looks like they think there's enough teeth in this agreement. Are there?

NEISLOSS: Well, it's a lot of -- it's a lot of factors. It was very interesting to hear George Bush this week say, "We trust the U.N."

George Bush need the U.N. at this point. The U.N. role will be to help on elections, to help move the political process forward, to help in other areas, humanitarian, human rights. But George Bush needed to get the international community back together on Iraq because he needs them as well. And you do expect to see potentially some contributions, maybe financial. But certainly not the rush for troop contributions that perhaps at one point the Bush administration had hoped they would get.

The U.S. ambassador right after the resolution was passed came out and said, Look, we don't expect a flood of troop contributions. And certainly, so far this week, that seems to be the case.

CANDIOTTI: What about the U.N. inspectors? Are there -- are they finding anything new as they review their records, or look at anything else? And how will they be working with U.S. troops on the ground?

NEISLOSS: Well, that's a very interesting question because the U.N. inspectors, the one who used to be on the ground combing for weapons, have not been in Iraq since the war, and the U.S. is in charge of the inspections process.

This week, the United Nations inspectors came out with a report that basically said there are some interesting and very strange things that we're seeing in Iraq. They are not in the country, but they're able to look at aerial photos. They say there are two sites that they know of, sites where dual dual-use equipment has been stored. Those two sites have been razed. There is nothing left. So they're saying, what happened to this equipment? Where did it go? Why were these sites razed?

Another sort of strange tale, the weapons inspectors have seen missile engine parts turning up in scrapyards. There were parts that turned up in Jordan, parts that turned up in the Netherlands. When the scrapyard first contacted the Dutch government, they sent in an official who started taking pictures, and these photos were sent back to the U.N. And one U.N. official said to me, We looked at this and said, Hey, that's a number that we put on that missile part. We tagged this back in 1996.

So they're really puzzled over why this is leave the country. There's a huge scrap-metal trade out of Iraq and what does it all mean?

CROWLEY: Liz, you know, a year ago, the U.N. didn't want to deal with George Bush and George Bush didn't want to deal with the U.N.

How did we get to this point? Who gave in, who got better? Is it this just in everybody's interest? What brought us to finally getting a resolution?

NEISLOSS: I think you have to say it's in everybody's interest. I think that nobody wanted to stand in the way of formalizing the end of the occupation. And certainly, the reality on the timetable is that that's what has to happen now.

I think that there genuinely was a change at the U.N. when it came to the negotiating this time. The French, the Germans, the Chinese -- in particular, the French and the Germans, who were very vocal, very resistant to change, said the U.S. really did try to make an effort. They did take some amendments on board.

But I think the reality for the U.S. was, in this negotiation, they wanted a signed piece of paper. They wanted something that they could wave at the G8, and they want to really move the process forward.

HAYS: Interesting to see if it's a piece of paper that just gets waved, or if it does move that process forward.

Well, from Iraq to how this week has turned attention back to what many people called Reaganomics. I'm back on the financial story, past and present, in a moment.

But first, to Atlanta, and what's making news at this hour.

NGUYEN: Back to ON THE STORY after these news headlines.

The body of former President Ronald Reagan was buried last night on the grounds of his presidential library at Simi Valley, California. The flag was removed from Reagan's casket, folded, and presented to his widow, Nancy. That after an artillery battery fired a salute and a bugler sounded taps. Republican Senator John McCain keeps saying it: He will not be the vice presidential candidate on a Democratic ticket. And reports today say McCain has told his colleague John Kerry that he will not change his mind.

A top Iraqi diplomat is dead, the victim of a drive-by shooting outside his home in Baghdad. Bassam Salih Kubba was one of four deputy foreign ministers. He had just returned to Iraq from the U.S.

Also in Iraq, an employer reports his seven Turkish civilian contractors being held hostage there has been released. Three of the Turks are seen in this video taken earlier with their captors. But three people taken hostage earlier this week, a Lebanese citizen and two Iraqi co-workers, have been found shot to death.

We could learn as early as today whether Ayman al-Zawahiri is likely the voice on an audiotape broadcast Friday in the Arab world. The voice, claiming to be the Osama bin Laden lieutenant, accused Americans of not really wanting democracy and freedom in the Arab world. U.S. intelligence officials are working to determine the authenticity of this claim.

Those are the stories at this hour. I'm Betty Nguyen. ON THE STORY continues right after this break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: I have my veto pen drawn and ready for any tax increase that Congress might even think of sending up. And I have only one thing to say to the tax increasers, Go ahead, make my day.

(END VIDEO CLIP)

HAYS: Some people can carry off a Clint Eastwood moment much better than others. The attention paid to former President Reagan this week refocused attention on his economic policies.

Welcome back. We're ON THE STORY.

NEISLOSS: Kathleen, so much of what happened this week was, to borrow another journalist's phrase, was filtered through "Gipper- colored lenses."

HAYS: Well put.

NEISLOSS: So tell us, or remind us, what were Reagan's economic policies?

HAYS: Well, you know, he came in, really, with four very simple pillars -- cut taxes, cut government spending, cut government regulation, cut inflation. And I think, really, the cornerstone of this really was his tax cuts. But I think we have to set the stage a little bit, because so much of what Reagan instituted we take for granted now in terms cutting taxes, tolerating big deficits. When he came into office, he inherited a marginal tax rate of 70 percent. The supply-siders say that he was actually falling in the footsteps of John F. Kennedy, who cut the top tax rate from 90 to 70 percent, when he said that rate had to drop.

Of course, the debate enters now as to what that really led to. Certainly, most everybody agrees it did help the economy grow. But did it help the economy grow because we all bought a lot more stuff or because it did spur the entrepreneurs or investment? That's just part of the debate that the Reagan legacy leaves.

CROWLEY: Wasn't it -- I mean, the inflation rate -- and I can't remember now what it was, but he really did bring it down over the course of those eight years.

When you look back and you talk to minorities, when you talk to a number of low-income people, they have a very different view of Ronald Reagan. And I was wondering as I talked to some of those people, is this a perception that's carried on, or did some of those policies fall heavily on those who could least afford it?

HAYS: That's a very interesting question.

Let me say first on the inflation front, that my -- as someone who has covered the Federal Reserve, really, since I started in this business about 20 years ago, and started here covering Paul Volcker, a legendary fed chairman who, granted brought -- helped bring that inflation rate from 13.5 percent down to 4 percent over the course of the Reagan years -- but was appointed by Jimmy Carter, remember that. And it was the Draconian interest rates, up near 20 percent, that helped defeat Carter and bring Ronald Reagan into office.

But people say at least Reagan was willing to tolerate those draconian policies as well and he was behind the low inflation. So that's one thing.

In terms of how everyone from African-Americans, to union people, to just generally lower-income people, felt then, and maybe feel now, looking back is -- you know, one of the things Reagan also stood for was attacking many of these entitlement programs. But again, the legacy he was inheriting was the Great Society of LBJ. He was not the only person who felt that entitlements were being wrongly used. Too many people were getting -- people who should not receive them.

There was also the very famous incident when the air traffic controllers went on strike and Reagan said, you better not or I'll fire you. It's illegal to strike in that kind of job. Well, he fired them. And again, many people felt he had too much sympathy for the investor, entrepreneurial, wealthy class and not enough for the poor folks.

I think Reagan felt that he was really doing something best for everyone, because he felt that the growth of government spending did get in the way of the dynamic investing part of the economy.

And I'll tell you, there's so many people on Wall Street this week, looking back very fondly, because they felt Reagan really helped start the great bull market that lasted from about 1982 until almost the year 2000.

STARR: But Kathleen, when you look back at the legacy after eight years in office, what's the reality on a couple of his pillars: cutting government spending, reducing the size of the federal government and taxes? How did it wind up?

HAYS: He was not able to reduce the size of government spending. They did leave office with marginal tax rates on income tax lower.

One of the things interesting about Reagan is he started raising taxes. He said, Make my day you tax cutters, but then he went ahead and had to raise taxes. But some people say that's something that the current president could learn from, that President Reagan did know how to compromise, he did know how to make a deal to get what he needed.

And again, his deficit is really the record deficit. His -- Reagan's deficit at one point, 6 percent of our nation's economy. Bush's deficit, right now, about 4 percent. But it's interesting how we got used to those big deficits under the Reagan years.

I think -- there's a debate though -- would Reagan -- Reagan didn't really approve of the big deficits. He did not really think that deficits didn't matter. That's what some people say. He just felt that it was so important to build up a defense budget as part of his move to help bring down communism that it was a price he was will to pay. His supporters today say the deficit maybe was a failure, but that bringing down communism, the wall, helped create the peace dividend that helped us float through the years of the '90s with great prosperity, years that the Democratic administration enjoyed.

STARR: Well, everyone continues to watch that legacy this past week.

From the financial to the military world, and the deadly challenges for U.S. forces in Iraq in coming weeks, I'm back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I don't expect more troops from NATO to be offered up. That's an unrealistic expectation. Nobody is suggesting that. What we are suggesting is for NATO perhaps to help train.

(END VIDEO CLIP)

STARR: President Bush Thursday at the G8 summit in Georgia, talking about two vitally important challenges for the U.S. -- getting more international support in Iraq and building up Iraq's own military forces.

Welcome back. We're ON THE STORY.

CANDIOTTI: Barbara, before we get into Iraq, I must ask, what was the Pentagon's reaction to President Reagan's death? After all, he did so much to build up the Defense Department.

And what about the reaction of those who were able to participate in the ceremonies?

STARR: Oh, Susan, I could talk -- you know, I could spend the rest of the hour talking about this. Because it was an incredible, incredible week.

I'm going to start by talking about some personal moments. I sat down with Secretary of Defense Donald Rumsfeld to talk about his remembrances of the Reagan administration. People may remember that Secretary Rumsfeld was actually President Reagan's Middle East envoy after the Beirut crisis, after the Marines were killed.

Sat down to talk to the secretary. And out of the clear blue sky, for the first time, he looked at me and he said, You know, my own father died of Alzheimer's. I said, oh, I didn't know that sir. Would you be will to talk about it? Because that was not the terms of the interview. He said yes. We turned the TV camera on. The secretary began to recount the struggle his father had so many years ago with Alzheimer's.

Now, Don Rumsfeld is just about the toughest guy in Washington these days. And the secretary of defense was suddenly no longer the secretary of defense. He was a man of 70 years himself recounting the death of his father, 25 years ago, from Alzheimer's, the pain that his own family felt at this. And clearly, the secretary -- his own -- his own mind, back in those years when his father was so sick, the secretary of defense, overcome by personal emotion in recounting this. And we did turn the TV camera off so the secretary could privately remember his father and his own family's struggle with Alzheimer's.

And I add, Kathleen, if the secretary's in his office this morning, watching this program, the reason I am telling this -- it was the most powerful testament I have personally ever seen to the pain that Alzheimer's causes a family.

HAYS: But, you know, I think this shows something about this week. And, as you said, at the Pentagon, and as Susan reminded us -- and this defense build-up under Reagan years was such an important thing, the backing for the military, the return to patriotism, the first time for a long time when he said that Vietnam was a shining moment for the country and people were shocked. I mean, Reagan -- again, we just have to remember the time he was in.

But within the Pentagon, I would think that this was such an emotional week. And that's what Don Rumsfeld was experiencing -- not just this reminder of his father, but so many emotions came up for people in so many different ways this week, but I would think especially for the military. STARR: Well, yes, and including, as Candy saw out in Simi Valley at the library, when there were young soldiers participating in the funeral procession, in the very highly precise ceremonies, young soldiers, very overcome.

I talked to the young soldier who rode the middle horse in the caisson. The young man on that middle horse. He was 20 years old -- is 20 years old. He'd been with the old guard unit for one year, and this young man had been in 300 full honors military funerals at Arlington. And all he was focused on was not the sadness, but offering and being able to be in this national historic event of serving a former commander in chief. Very moving stuff.

NEISLOSS: Barbara, attention next week is almost certainly going to move from Reagan, back to what really will overwhelm the Pentagon, and that is Iraq.

What are you hearing about the efforts to get NATO on board in anyway to help out with troops, or in any kind of training role?

STARR: Well, I think what we have heard from the G8 summit is not much of an indication that the Bush administration expects to see NATO participate in peacekeeping, in -- if you will, or the post- occupation force, but more of an indication, they hope at least, that NATO will help train those Iraqi security forces.

All hopes now on that, but a lot of concern that there will be much more violence before all of this is over.

HAYS: Concern we all share.

Well, watching closely events in Iraq, of course, President Bush. Elaine Quijano is in Crawford, Texas, with the president. And more with Candy Crowley on the national farewell to Ronald Reagan.

(BEGIN VIDEOTAPE)

ANNOUNCER: Candy Crowley is CNN's senior political correspondent. She's been with the network since 1987. The National Press Foundation honored her with the 1998 Dirksen Award for distinguished reporting on Congress. She received the 1997 Joan Shorenstein Barone Award for excellence in journalism for coverage of the Bob Dole presidential campaign.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: Ronald Reagan will go down in history as a great American president because he had a core set of principles from which he would not deviate.

(END VIDEO CLIP)

QUIJANO: President Bush praising President Reagan after the G8 summit in Sea Island, Georgia.

President Bush spent last night here in Texas, and later today, will celebrate his father, George W. -- H.W. Bush's, 80th birthday, with celebrations here in Texas.

Welcome back. We're ON THE STORY.

HAYS: Well, you know, Elaine, I really wonder, you know, how much this does resonate. Ronald Reagan's legacy -- I'm sure that the current President Bush would like to capture that. And I want Candy to comment on this too. Because, again, Candy, you go back a long way covering this. And -- you know, really put it in perspective from both of you -- Elaine.

QUIJANO: Well, it's interesting, Kathleen.

I can tell you just from speaking to some of the people, where I was stationed earlier this week, out on the West Lawn in front of the Capitol, people drew comparisons both to this current president and to Ronald Reagan, saying that they both, in their minds, represented men to held firm to their beliefs, men who held firm to their convictions, people that they described as being moral, courageous, righteous men.

So those are the kinds of terms that people who at least turned out -- remember, some 104,000 people turning out at the U.S. Capitol Rotunda to view the president's casket -- drawing comparisons to this current president and to President Reagan, you know, using them in the same sentence, finding the same characteristics in this president.

HAYS: Candy is that fair?

CROWLEY: Sure. You know, I said earlier, I don't remember a Republican candidate that didn't try to touch that Reagan mantle because he is such an icon in the party.

The comparisons to Bush and Reagan went on long before Ronald Reagan died this weekend. It came up in the campaign that he was -- that this Bush was more Reagan than he was Dad Bush. So I -- and you know, I love to look at anything through a political prism. I can almost always make a connection to politics.

But, you know, by the time next week rolls around, we are on to something else. I just don't see in the end that, come November, people will somehow be moved by the passing of Ronald Reagan to vote one way or the other. I just think there are too many other burning issues on the top of the plate.

I want to mention one thing that went on that I thought was really interesting. You know, when we watched the Washington portion of the funeral, they were saying good-bye to a president, to a leader of the free world, to a commander in chief. And it was pretty -- not emotionless -- that's the wrong word. But free of the kind of funereal, there was more pageantry, that there was the funereal feel.

The one exception was George Bush, the dad. Let's take a listen.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: As his vice president for eight years, I learned more from Ronald Reagan than from anyone I encountered in all my years of public life.

(END VIDEO CLIP)

CROWLEY: And remember, this is -- this is the Bush that had a lot of policy differences with Ronald Reagan.

So, you know, I think it's very hard in the end to draw a whole lot of conclusions that this, in fact, will affect politics in the future.

NEISLOSS: Candy, this is very difficult week, obviously, for any candidate who is trying to decide, I guess, how to balance the act, while the Reagan funeral is going on -- and I'm obviously referring to John Kerry. What did this week do for him? What did it mean for him?

CROWLEY: Well, it gave him a couple things.

First of all, some time to do some administrative work because he's complaining a lot that he never gets to get policy briefings and that sort of thing.

Second of all, he quietly -- they managed to put an end to that McCain rumor, which I thought was a really interesting to come out. On the day that they ultimately buried -- the bicoastal funerals for Ronald Reagan, a leak story came out that John McCain had actually had a conversation with Kerry about how, saying -- Look, I'm not going to be your vice presidential candidate.

CANDIOTTI: Elaine, what is the president's schedule for the rest of the weekend?

QUIJANO: Well, Susan, after tackling some pretty serious issues, serious occasions, first with G-8, and of course yesterday being a very solemn occasion, the president gets to have some fun actually, celebrating with his father his 80th birthday. And we know that the elder Bush has done this before, but he'll be celebrating by jumping out of a plane. Shouldn't come as a surprise to people. The navy veteran has done this before. And who knows? Perhaps may even do it again for his 85th.

But that is what is on the president's schedule, a weekend of celebration here in Texas.

STARR: And many of us, indeed, will be watching President Bush, wishing him our very best. The father, President Bush.

We're back ON THE STORY after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: Track star Marion Jones was in the headlines this week. What's her story? More coming up. (END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Track star Marion Jones came home from the 2000 Sydney Olympics with three gold medals. What's her story? She's been under investigation by the U.S. anti-doping agency and a letter this week asked follow-up questions. But other star athletes were informed of formal proceedings that could bar them from this summer's Olympics. Marion Jones already has threatened to sue if kept off the team. The outcome may determine her own future and because of her fame, credibility of the anti-doping agency too.

(END VIDEOTAPE)

STARR: Well, Kathleen, I suspect we both feel the same way. So much of Washington, New York, the stock market, the country has been focused on the funeral for President Reagan this whole past week.

Starting Monday it's sort of back to -- you know, with all respect, back to regularly scheduled programming, the war in Iraq certainly will be getting attention again, the transition...

HAYS: Well, and, you know, I think the week did feel just kind of off. You know, people came back and the markets were kind of volatile. Nothing really happened. Having -- you know, having Friday off, basically because the stock market closes.

Alan Greenspan, confirmation hearing on Tuesday. That could be kind of interesting on Capitol Hill.

STARR: That will be interesting.

As Candy Crowley was saying in Los Angeles too, presidential election back on the front burner.

HAYS: There you go. Well, a lot -- a lot's going to be the front burner.

Thank you to my colleagues. Thank you for watching ON THE STORY. We'll be back next week with these front-burner issues.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on "D-Day: A Call to Courage."

Coming up right now, a check of the top stories.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com