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CNN Wolf Blitzer Reports

Federal Reserve Cuts Interest Rates 0.5 Percent; FBI Turns Over More Files to Timothy McVeigh's Attorneys

Aired May 15, 2001 - 20:00   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Tonight, will it do the trick? The Federal Reserve again cuts interest rates. What does it mean for your money? I'll ask Lou Dobbs, the host of "MONEYLINE."

A runaway freight train, a hazardous cargo, a dramatic rescue attempt: We'll have details.

And the FBI turns up more files on the Oklahoma City bombing that were not turned over to Timothy McVeigh's attorneys. With McVeigh's execution postponed, we'll have a death penalty debate between conservative Pat Buchanan and liberal Mario Cuomo.

Good evening. I'm Wolf Blitzer, reporting tonight from Washington.

For the fifth time this year, the Federal Reserve cut interest rates: today, another half a point cut. That's a total of 2 1/2 percent in reductions this year.

Fed Chairman Alan Greenspan is hoping to stimulate the economy, although some analysts insist he should have moved more aggressively last year to head off the economic slowdown. Still, these analysts say better late than never, and that's our top story.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Wall Street reacted quickly to the Fed's latest move, initially see-sawing but ending the day flat. That's because it was a cut many investors had expected. Some analysts still see problems down the road.

JEFF ROSENSWEIG, EMORY UNIVERSITY: I'm more concerned with the people who are losing their jobs, because the unemployment rate is still going to be rising and the people are hurting out there.

BLITZER: The Federal Reserve said its main concern is the sluggish economy and signaled it may not be done cutting rates for the year. Its next scheduled meeting is next month.

DIANE SWONK, BANK ONE: It leaves the Fed's options open to ease again if they feel necessary in June, but it doesn't necessarily lock them into an easing in June. BLITZER: The Fed sees no danger of its No. 1 fear: inflation. But it is worried about declining business investments and flatter consumer spending.

EDWARD YARDENI, DEUTSCHE BANK: It takes some time, as you know. It can take six, sometimes even 12 months for the full impact of easier policy to work. The risk the Fed has is that if they keep easing here, it's that most of the stimulus will go into the stock market. It sounds good, but we don't want another bubble.

BLITZER: Treasury Secretary Paul O'Neill would not comment directly on the rate cut, but says the Bush administration shares the Fed's goals of spurring growth and keeping inflation down.

(END VIDEOTAPE)

BLITZER: For more on the Fed's rate cut and how it might affect you, let's go live to New York and CNN's Lou Dobbs, anchor and managing editor of "LOU DOBBS MONEYLINE."

Lou, thanks for joining us.

LOU DOBBS, CNN ANCHOR: Good to be here, Wolf.

BLITZER: Let's get right to the key issue. A lot of people are asking, "Is this going to do the trick?" What are they saying up there?

DOBBS: Well, everyone would like it to do the trick and be the culmination of this process, but you know, that's uncertain at this point. And particularly with the Fed, Wolf, leaving open the door for further interest rate cuts, that may not sound particularly profoundly important, but the fact that the Fed has left it open raises the question of whether or not there will be further rate cuts.

And as you point out 2 1/2 full cuts, 2 1/2 percent full cuts over the course of less than five months is truly remarkable.

It's important to remember in '99 and 2000 the Fed only raised rates by 1.75, and we're already 75 basis points above those -- those heights with their cuts.

BLITZER: You know, a lot of consumers out there are looking at these cuts, 2 1/2 points over these past five months or so. It's gone from 6.5 percent to 4 percent. But take a look at 30-year fixed mortgages. It's gone from 7.31 percent only down to 7.2 percent, which is minuscule, tiny. Why hasn't there been a bigger effect on mortgage rates?

DOBBS: Well, that's really, Wolf, a function of the bond market which those 30-year mortgages -- mortgages, in fact, in general -- are tied. And we've seen considerable resistance, frankly, at the 10-year level and some significant resistance at the 30-year level.

Now, ironically, as we see stock prices rise, we're likely to see the bond market retreat a bit and improve those mortgage interest rates as a result. But right now, that's just -- that's not precisely what's occurring.

BLITZER: Lou, you interviewed Vice President Cheney today. He's going to be releasing his task force energy recommendations on Thursday. A lot of big problems, as you know, in California. Only today, electric utility bills for many consumers out there are going to go up about 50 percent.

The vice president was very firm in that interview with you today in talking about who's responsible for California's problems, and he cited, of course, the California governor, in part, Gray Davis and what hasn't been done in California. Listen to this excerpt from your interview.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Once they saw that they did have problems, which over a year ago they were well aware of, they avoided dealing with it until it reached the point now where prices are skyrocketing. They're having rolling blackouts, and they've bankrupted one of the two big utilities in the state.

Now, I think the governor should really focus on California problems and not try to throw the blame elsewhere.

(END VIDEO CLIP)

BLITZER: A lot of Americans, though, are asking the problems in California, the rolling blackouts, are they going to spread elsewhere around the country. Did the vice president talk about that?

DOBBS: Well, the vice president, of course, is addressing it as the president's point man on energy policy, and of course, is concerned about the national policy. But it's important for us to note that the vice president was responding to Gray Davis' direct blaming of this administration: seeking price controls, seeking all sorts of solutions that are not palatable to this administration.

And in point of fact, the vice president is exactly correct. It was a California state system of deregulation that led to all of the problems that are being created.

You pointed out the 50 percent increase in consumer rates that will result, that was announced today, but today Moody's also lowered the rating on $20 billion of California state bonds because of the financial drain as a result of what is happening in California. It is a very difficult time for Californians, and the prospects are not particularly bright over the course of the summer.

BLITZER: Lou Dobbs, thanks for joining us. Once again, great to have you back at CNN.

DOBBS: Good to be back, Wolf.

BLITZER: Thanks for helping us -- thanks for helping us understand what's going on in the world of big business. Appreciate it very much. DOBBS: Thanks, Wolf.

BLITZER: And -- thank you. And while President Bush will reveal his energy proposals Thursday, congressional Democrats today got a jump by showing up at the pump, unveiling their own energy blueprint at a Capitol Hill gas station and taking the Bush administration to task.

(BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: We do not accept the belief that this administration apparently has that we have to drill our way out of this problem, that we basically have to sacrifice our environment to solve the problem. We don't believe that. We believe there's a win-win-win solution.

(END VIDEO CLIP)

BLITZER: The Democrats' short-term proposals include price caps on Western electricity and a call for OPEC to step up production. Longer term, they favor tax credits for energy efficiency and reduced emissions, and tax incentives for increased U.S. production.

Federal investigators tonight are trying to solve a mystery over a runaway train. In northwest Ohio, a railroad employee was forced to jump aboard a freight train carrying thousands of gallons of hazardous materials after authorities realized no one was in control of the train. Almost two hours after the train took off, the worker pulled the brakes, bringing it to safety. Authorities say they're not sure how the train left the rail yard with no one on board.

As Oklahoma City bomber Timothy McVeigh weighs his options, conservative Pat Buchanan and liberal Mario Cuomo hold a no-holds- barred debate on the death penalty. And we'll tell you what the International Olympic Committee has to say about China's bid to host the games. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. He was to have been executed tomorrow, actually in only 12 hours, but Oklahoma City bomber Timothy McVeigh will instead meet with his attorneys to weigh his legal options. McVeigh's attorneys do not rule out an appeal.

Meantime, the FBI is stepping up its search for documents that may have been withheld from McVeigh's defense team: this after word that seven more files have turned up on top of the 700 documents, more than 3,000 pages, that the FBI failed to provide McVeigh's attorneys before his trial. The Justice Department last week postponed McVeigh's execution until June 11th.

The death penalty has long been a hotly debated issue among Americans. And a short while ago, that issue was debated, hotly, as I was joined by former Republican presidential candidate Pat Buchanan and former Democratic New York Governor Mario Cuomo.

They make it clear that their shared Catholic heritage does not lead to any shared viewpoints.

(BEGIN VIDEOTAPE)

BLITZER: Pat Buchanan, Governor Cuomo, thanks for joining us.

And I want to begin with you, Governor Cuomo. A lot of people make the point that if there was ever a slam-dunk case justifying capital punishment, it's the case of Timothy McVeigh. He's confessed to the crime. He killed 168 people, 19 children. Why not execute him?

MARIO CUOMO, FORMER NEW YORK GOVERNOR: Well, the death penalty in the United States of America is not limited to cases like McVeigh's. So you have to deal with the whole law.

And the principle which tells almost all of the industrial world -- because all the industrialized nations have given up the death penalty -- the principles that they argue for would cover even the horrible situation like this one.

Here, the United States government is responding to this terrible brutality that took 168 lives by the brutality of taking another life. That won't deter anything. It won't inspire anybody. It won't bring back any life. It won't deter any evil conduct. As a matter of fact, it might even promote some. It's very expensive as a process. Life imprisonment without parole would have been cheaper. It reduces us.

And this is why most of the developed world has given it up. And one thing more: It may be reasonably clear that McVeigh is not as guilty as -- is guilty. It may be reasonably clear. Perhaps it won't be. We don't know what the FBI records said.

And even if it's clear here, the United States of America knows that its judicial system is sufficiently imperfect so that other innocent lives will be taken and have been taken.

BLITZER: All right, Pat Buchanan, what do you say about those arguments?

PATRICK BUCHANAN, CONSERVATIVE ACTIVIST: Well, I would say this: The one thing I think the governor neglects is the idea of justice. This man killed 168 people. He has no remorse. He killed 19 children. He said it was collateral damage. He sees himself as a warrior against the United States of America.

And if the United States is not going to be send a message of timidity and befuddlement and confusion, I think it's got to tell people like McVeigh we're going to take your life for the lives you have taken.

That is justice. I believe it clearly is a deterrent. If imprisonment is a deterrent, certainly the death penalty, which is far more severe, is a deterrent.

And as for the European countries, many of those countries, the people in those countries, want a death penalty: 65 percent in Great Britain do. They are led and dominated basically by elites who have imposed their views and values on Europe.

For example, the Turks are an Islamic country. They want the death penalty. The Europeans say the only way you can get into the European Union is to give it up. But I believe we need it.

BLITZER: But let me interrupt. Pat Buchanan, let me interrupt you and point out you're an observant Catholic. The pope has appealed to the United States to spare the life of Timothy McVeigh. When the pope was here in the United States in St. Louis in 1999, he said this: "The dignity of human life must never be taken away, even in the case of someone who has done great evil."

You disagree with the pope on this.

BUCHANAN: Yeah. I don't believe you take away the dignity of a human being by simply putting someone to death, in my judgment. I don't think we ought to use revenge or torture or anything like that. But I do believe we have to, in the United States of America -- the pope is speaking personally. But the Catholic church, I would remind you, Wolf, in scripture and tradition authorizes the state to use the power of the sword to defend the people and to do justice.

Christ himself, when He was before Pilate, Pilate said, "I have the power to take your life," and Christ said, "That power comes from God." St. Paul, Augustine, Aquinas, Pius the 10th. Vatican City had a death penalty up until 1969.

BLITZER: All right, Governor Cuomo, you're...

CUOMO: No, I know -- I know...

BLITZER: You're also an observant Catholic.

CUOMO: Well, I know Pat is a confident guy, but I've never heard this kind of confidence from a Catholic. He's smarter than the pope, and he disputes the pope. And as a matter of fact, he cites people like Aquinas.

Well, Pat, if you're going to cite Aquinas, what do you say about Aquinas' position on abortion? Which is that life does not begin at conception. So you better be careful about your authorities.

Now, let's be clear on the Catholic teaching, please. The pope's position is clear, and the catechism is clear. There is a new catechism: The death penalty is absolutely prohibited unless you can prove that you can't protect yourself from the killer through incarceration.

And of course, in this country, which leads the world in incarceration, it's an absurdity to say we can't protect ourselves from the killer except by killing him.

BUCHANAN: Well, let me...

(CROSSTALK)

CUOMO: Now, that's the teaching. Now, that's -- wait a minute, Wolf.

BUCHANAN: Let me get into the teaching.

CUOMO: That -- that should not...

BLITZER: Let's let Pat Buchanan respond.

BUCHANAN: I've got to respond, governor.

BLITZER: Go ahead, Pat.

CUOMO: Sure, go ahead.

BUCHANAN: Governor -- it's wonderful that the governor quotes the Holy Father, the pope. He just in that same...

(CROSSTALK)

CUOMO: No, the catechism. The catechism. The catechism.

(CROSSTALK)

BUCHANAN: ... where he talks about -- he talks about Catholic teaching.

CUOMO: That's not the pope. The catechism.

BUCHANAN: With due respect, governor, I think you won't let me answer, because the point is the Holy Father teaches infallibly that you can never under any circumstances take innocent human life by abortion.

CUOMO: That is not true.

BUCHANAN: 40 million have been done in the United States: 40 million have been done since Roe v. Wade.

CUOMO: That is not true, Pat.

BUCHANAN: I would like to see Governor Cuomo stand up and say that abortion is everywhere wrong as the pope and the Catholic Church have taught infallibly for 2,000 years.

CUOMO: Well...

BLITZER: All right...

BUCHANAN: The church teaches the death penalty...

CUOMO: Excuse me. Pat -- Pat...

BUCHANAN: ... is acceptable.

CUOMO: Pat, I can't let you get away with this. This is a misuse of your religion. The pope has not taught this subject infallibly. This should not be the argument, incidentally, against the death penalty, and it's never been my argument, the church's teaching, because for a long time they were too quiet on this issue.

But you brought it up now: Let the world understand that infallibility has been used only two or three times in the modern history of the church. It was not used on the subject of abortion. Your favorite quote, Aquinas, Thomas Aquinas, St. Jerome, St. Augustine, all held that life does not begin at conception. It begins perhaps 40 days later. Are you telling me...

BUCHANAN: Governor...

CUOMO: Just a minute. Are you telling me...

BUCHANAN: Governor, governor...

CUOMO: ... that the saints were wrong, and....

BUCHANAN: No, I'm telling...

CUOMO: Look, he doesn't...

BUCHANAN: I'll tell you what I'm...

BLITZER: Let's let Pat Buchanan respond to that.

CUOMO: He doesn't teach abortion through infallibility.

BUCHANAN: I'm telling you -- what I'm telling you, governor -- what I'm telling you -- what I'm telling you, governor, is Mario Cuomo is in moral error. While the church does not get up and define a dogma, scripture and tradition and Catholic teaching for 2,000 years say that abortion is intrinsically evil. It is taking the life of an innocent...

CUOMO: I didn't say it's not evil.

BUCHANAN: ... taking the life of an innocent human being, and never permissible, never right, and the Holy Father has so stated repeatedly, governor. And I think your position is wrong on this.

CUOMO: Yeah, he's stated...

(CROSSTALK)

BLITZER: Governor, we only have 10 seconds. Governor, 10 seconds.

CUOMO: Well, you allowed him to convert this into an argument over religion, which doesn't belong on this issue. The death penalty does not deter.

My position is not that the Catholic Church doesn't teach that abortion is evil -- has nothing to do with the death penalty. As a Catholic, I'm inclined to and must believe that. That's not the question.

The question is, should the death penalty be the law of the land, should abortion be the law of the land? For Catholics and non- Catholics, for believers and non-believers?

BUCHANAN: And the vast majority of Americans want the death penalty. It's constitutional.

CUOMO: But you dismissed that.

(CROSSTALK)

BLITZER: Gentlemen!

(CROSSTALK)

BUCHANAN: They have it...

(CROSSTALK)

CUOMO: You dismissed that as an argument when it came to Europe. You said...

BLITZER: Unfortunately, gentlemen...

CUOMO: ... it was the elitists that were making the law. But here the people...

BUCHANAN: That is the truth in Europe.

BLITZER: Governor Cuomo, Pat Buchanan, unfortunately, we're not going to resolve this debate tonight, but I want to thank both of you for joining us on our program.

(END VIDEOTAPE)

BLITZER: And what ever happened to those U.S. reconnaissance flights along China's coast? We'll let you know.

And on "The Leading Edge," new findings about hormone replacement therapy for some cancer patients.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. In other news tonight, CNN has learned attorneys for suspected FBI spy Robert Hanssen expect he will be indicted tomorrow. Hanssen was arrested in February for allegedly selling some of the nation's most sensitive secrets to Moscow over 15 years. Attorney Preston Burton says talks over a possible plea deal have broken down because prosecutors have refused to say they would not seek the death penalty.

The United States quietly is resuming regular reconnaissance flights near China's coast. Defense sources tell CNN an Air Force RC- 135 and a Navy EP-3 flew along China's northern and central coasts last week, away from Hainan Island. China, which has demanded an end to such flights, did not interfere. China's capital city of Beijing is one of three endorsed by an IOC evaluation team as being qualified to bid for the 2008 Summer Olympic Games. The team says Beijing's bid would leave a unique legacy. It also said the issue of human rights was not part of its evaluation. The other cities listed as qualified are Toronto and Paris. Istanbul, Turkey, and Osaka, Japan did not make the cut.

They may not get the Olympics, but there was other exciting news for the Japanese. The royal palace confirmed crown Princess Masako is pregnant, raising hopes for the birth of an heir to the monarchy. The baby is due in late November or early December.

Tonight on "The Leading Edge," more of us may soon be told by our doctors to change our diets or start taking cholesterol-lowering drugs. That's because more aggressive new guidelines lower the threshold for who's at risk of health problems due to high cholesterol.

Breast cancer patients may now want to consider taking hormone- replacement therapy. Despite long-held beliefs that estrogen could be linked to breast cancer, new findings suggest hormone replacement may reduce the risk of developing new tumors 50 percent. The study is published in "the Journal of the National Cancer Institute."

Up next, I'll open our mailbag. One of you has a proposal for a punishment worse than death for Timothy McVeigh. I'll share it with you when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now to open our mailbag. Many of you reacted emotionally to the Supreme Court decision upholding the ban on using marijuana for medical purposes.

Eileen from Oregon writes this: "I was diagnosed with multiple sclerosis in 1996. My daughter was 2 at the time. I am deeply committed to raising my child even though I have low vision and am in constant pain. Please tell me that we don't live in a society where people can choose to harm themselves with cigarettes and alcohol, but I cannot choose to have relief from pain with medical marijuana. It should be treated like any other drug, and it should be dispensed at the pharmacy, not on a street corner."

Kathleen from North Carolina writes about Oklahoma City bomber Timothy McVeigh: "I believe McVeigh should spend his life in a cell. He should now be allowed to conduct audio or visual interviews with any media. He should never be paroled. He should rot there. And his cell should be wallpapered with the faces of his victims."

Remember, I want to hear from you. Please e-mail me at wolf@cnn.com. And you can read my daily on-line column and sign up for my e-mail previewing our nightly programs by going to our WOLF BLITZER REPORTS Web site, cnn.com/wolf.

Please stay with CNN throughout the night. Space tourist Dennis Tito and Peter Jennings are Larry King's guests at the top of the hour. Up next, Greta Van Susteren. She's standing by to tell us what she has -- Greta.

GRETA VAN SUSTEREN, HOST, CNN'S "THE POINT": Wolf, should there be prayer at the Justice Department? I have two gentlemen joining me who know more about prayer than any two men I know.

Plus, Johnnie Cochran and Ken Starr? Johnnie Cochran joins us to explain what he's doing with Ken Starr -- Wolf?

BLITZER: Thanks, Greta, sounds good. Tomorrow night, on the day Timothy McVeigh was scheduled to die, we'll have the latest on FBI blunders and the fate of the Oklahoma City bomber.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washington. "THE POINT WITH GRETA VAN SUSTEREN" begins right now.

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