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CNN Wolf Blitzer Reports
Special Forces Member Slain in Ambush; Democrats, President Disagree Over Recession
Aired January 04, 2002 - 17:00 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.
JOHN KING, GUEST HOST: Now on WOLF BLITZER REPORTS...
(BEGIN VIDEO CLIP)
GENERAL TOM FRANKS, U.S. CENTRAL COMMAND COMMANDER: We had a special forces member killed earlier today by small arms fire.
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KING: It's the first U.S. military death in Afghanistan from hostile fire. Are U.S. forces facing greater danger as they step up the search for Taliban and al Qaeda leaders? Can psychological warfare help the hunt?
Saying the nation must battle both terrorism and a recession, Democrats take aim at the Bush administration's handling of the economy.
(BEGIN VIDEO CLIP)
SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Results are what matter, not rhetoric.
(END VIDEO CLIP)
KING: Wrapping up a Texas homecoming, President Bush also turns his attention to the economy. What is on his agenda? We'll hear from the White House, and I'll speak with the Senate majority leader, Tom Daschle.
I'm John King in for Wolf Blitzer. Thanks for joining us. The United States suffers its first death from enemy fire in Afghanistan, and the Democrats begin the new year's political battle and policy battle over an economy in recession. In-depth looks at those stories after we check today's developments in "America's New War". A member of the Army special forces was killed today in an ambush in eastern Afghanistan and, Pentagon officials tell CNN, a CIA officer was wounded. The small American team in the region was evacuated by air. Today's death is the first of a U.S. soldier in hostile activity in Afghanistan.
The man second-most wanted by the Pentagon is said to be surrounded. An Afghan official says Mohammed Omar, the leader of the Taliban, is encircled near the city of Baghran. The Associated Press quotes local tribal leaders as saying they are seeking Omar's surrender.
Another top Taliban official is expected to become a prisoner of the U.S. military tomorrow. Former Taliban ambassador, Abdul Salam Zaeef, is awaiting deportation by Pakistan. U.S. officials will not discuss the charges he might face.
Malaysia announced the arrest of 13 Islamic militants suspected of having ties to terrorism suspect, Zacarias Moussaoui. Malaysia's foreign minister said some of those arrested had trained with al Qaeda and belong to a group that seeks to overthrow the government.
Also today, Moussaoui backed a request to televise his trial in Virginia, for alleged participation in the September 11th conspiracy. The government opposes that request.
Senate majority leader Tom Daschle says gaps still exist in U.S. homeland security. He called for additional government spending to boost cyber security, rail security, and protection of the nation's nuclear plants. His comments came in an economic address that challenged the Bush administration. We'll have more on that in a moment.
After 90 days of war, the nation has suffered the first death in combat of one of its soldiers. The death underscores what the Pentagon has been at pain to remind us of lately: that, as well as things appear to be going, this war in Afghanistan is far from over. CNN's Bob Franken has new information on this death in eastern Afghanistan.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, as a matter of fact, John, some think it's remarkable that it's taken this long for a U.S. military man to be killed by hostile fire, 90 days into the war, as you said. But it's coming at a time when there is a widespread perception things were winding down. And the Pentagon has been going all out to say that no, as a matter of fact, the danger may be increasing. The point was driven home during the weekly news conference by the commander of that operation, of entire Afghanistan operation, General Tommy Franks.
(BEGIN VIDEO CLIP)
FRANKS: We had special forces member killed earlier today by small arms fire, in the vicinity of Gardez-Khowst. As I have a chance to speak to you this afternoon, I am mindful of that. I am mindful of the cost that these great young people pay in order to support this very, very important campaign.
(END VIDEO CLIP)
FRANKEN: This an area that many believe is bristling still with al Qaeda troops. It was a joint operation between the CIA and the military, searching for intelligence. As a matter of fact, they walked into an and the CIA officer who was along with this particular unit was wounded. His wounds are described as serious but not life- threatening. All were removed from the area when a quick response team for the United States came in, and took them to an area. The CIA officer is being treated now.
The name of the special operations trooper who was killed is not being released yet, pending notification of next of kin. Many of the details are not being put out, according to sources here, that this was a very, very tightly held intelligence operation. They would not say whether the super secret delta force was involved in this operation, although there are some sources who are saying that this was a combined part of the operation. But they were not saying that the trooper who was killed was part of the delta force. He was not, as a matter of fact. But he was a member of the United States Army special forces -- John.
KING: Bob, yesterday we were discussing whether the military was at all concerned about the new Afghan government releasing rank-and- file Taliban back into the general population. Given this ambush today, any increased concerns that perhaps it's too soon for that, that those Taliban fighters should be held?
FRANKEN: Well, they haven't put it that way, but they are concerned about those who have fled with their weapons who are now, we are being told daily, regrouping. They are becoming a threat. As a matter of fact, enough so that this particular region, it's the area near the Pakistan border, has been the target now of intense bombing. There was a second run at that camp, which had been bombed the day before -- a camp that was known as an al Qaeda gathering place. The very same camp, you'll recall, that in 1998 was the target of cruise missiles during the Clinton administration -- John.
KING: Bob Franken standing by for us at the Pentagon today. Thank you, Bob. And we should note this, the first death of a U.S. military soldier in combat in Afghanistan. CIA agent Mike Spann, killed a few weeks back at that prison riot in Mazar-e Sharif.
As we reported, Afghan officials say Taliban leader Mohammad Omar is surrounded, and efforts are under way to negotiate his surrender. After Osama bin Laden, he is the most wanted man in the war on terror. An earlier claim that Omar had been arrested is being denied.
CNN's John Vause has the latest on the story from Kabul.
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JOHN VAUSE, CNN CORRESPONDENT: A number of spokesmen for the new Afghan government here in Kabul were contacted by CNN, all contradicting the statements which were coming from the reconstruction minister, Amin Farhang, who was on German television, and said that he believed that Mullah Omar had in fact been arrested.
A spokesman for the defense ministry, Mohammed Abil, told CNN that if Omar had been arrested he would know about it. He says he knows nothing about it, therefore it hasn't happened. A spokesman for the interior ministry described Fahang's comments as possibly being a mistake. CNN also contacted a senior intelligence official in Kandahar, who told us that he believes that Omar is still in the Baghran area in southern Afghanistan.
Now, the defense spokesman, Mohammed Abil, also told CNN that there have in fact been negotiations under way for the surrender of the one-eyed Mullah, the former leader of the Taliban. But those negotiations did not go well -- describing Omar as being very stubborn. He also told CNN that Omar may in fact be surrounded by as many as 1,000 Taliban troops.
John Vause, CNN, Kabul.
(END VIDEOTAPE)
KING: Taliban leader Omar, the man said to be surrounded, is very much a mystery. He is rarely seen, and he's not the type to pose for pictures. That job fell to this man, Abdul Salam Zaeef. As ambassador to Pakistan, he was the Taliban front man, a very militant spokesman. During the early days of the war, his daily news briefings mocked the United States. Eventually, the Pakistani government closed Zaeef's embassy, ordering him silenced. And finally, Pakistan detained him.
Tomorrow he becomes the property of the United States military. Joining us now with more this developing story, our national security correspondent, David Ensor. David, why does the United States want the ambassador?
DAVID ENSOR, CNN CORRESPONDENT: They believe that Abdul Zaeef still knows more than he's been willing to say. He has been questioned in recent days by U.S. and Pakistani intelligence officials. They're not satisfied that they have all the information from him that they might be able to get in a calmer, more long-term surrounding than this was. So they -- the Pakistanis have refused his request for asylum for -- to be able to stay in Pakistan. They are going to, Pakistani officials tell us, take him across the border into Afghanistan tomorrow. He will then, U.S. officials say, be immediately taken into U.S. custody.
Pakistani officials have told us that he may end up at Guantanamo Bay in Cuba, where other prisoners may also soon be held. But U.S. officials are unwilling to confirm that particular detail. Still, they are confirming they want him. They plan to question him at length. They think he knows more about where some of the Taliban leadership and al Qaeda leadership may be.
Interesting to note that the former ambassador's father was one of the teachers of Mohammed Omar, the head of the Taliban. So it's a bit of a family operation. This man was close, had family ties with people very close to the Taliban leadership. KING: You say they won't confirm even where they might take him? They say they want to talk to him. We assume this will be the military and the CIA questioning. This is not the ambassador being turned over to the federal law enforcement, at least not yet.
ENSOR: Not yet. That's right. Officials will not discuss whether or not there will be charges placed against him. That may well be the case, but they're just simply not willing to go down that road at this point yet.
KING: And he has stayed in Pakistan during this time, or he's gone back into Afghanistan, I think, and then gone back into Pakistan. Does that at all raise concerns? Why would he have stayed if he thought he would be such a valuable asset to be questioned?
ENSOR: Well, it's a good question. And you know, whether he really does know very much, that will remain to be seen. But they have become convinced that there is more that this man may know. And they want to have a long time to talk to him. So, by taking this move it will be clear to him, at least, that he can wait this one out.
KING: David Ensor, with the latest on a very intriguing development. Thank you very much,
There's much more to discuss on the military front, and for that, we turn to CNN military analyst, General David Grange. He joins us today from Chicago.
General, let's begin with the death of this special forces soldier in Afghanistan. It comes at a time, we're seeing more and more -- we're hearing less and less, actually, what those forces are up to on the ground. But we're seeing more apparent hunt for al Qaeda militia regrouping in some areas. Hunts, perhaps, continuing for Osama bin Laden and Mullah Omar.
Is your sense that, while we may not be getting the details because of the sensitivity that the on-the-ground risks for U.S. forces are now dramatically on the rise?
GENERAL DAVID GRANGE (RET), CNN MILITARY ANALYST: I'm not sure that they're on the rise. I would say that it's always been very dangerous. We're fortunate we haven't lost more of our soldiers and Marines. It's very sad that we lost this trooper. Our priority right now should be to ensure that the normal Department of Defense procedures, in regards to the family of the soldier, is taken care of, and that's the priority, ahead of everything else we may say or do.
But you can be assured that, when you lose a fallen comrade, the rest of the teammates of that soldier will continue to drive on with the mission. And this will actually be one of those situations that the -- their drive to accomplish what are they told do must be accomplished.
KING: An ambush here, General Grange -- a reminder that troops are still wandering what is hardly a secure environment. And this happens amid reports that the Afghan transitional government is releasing back into the general population hundreds of rank-and-file Taliban fighters. As a military commander, would that concern you, and would you be asking the transitional government, wait a minute, we still have men out here in a very dangerous environment. We don't want to be giving them potential reinforcements, if you will?
GRANGE: Good point. This is a very dangerous area, obviously. Special forces call it a denied area. The Department of Defense, at the strategic level, call it still a hostile or, at the minimum, an uncertain area. Very dangerous, as you know. Many of the pockets of these Taliban fighters were bypassed. They did not really surrender or turn in their arms. So you have bandits, you have warlords. You have still loyal supporters of the al Qaeda and Taliban throughout the country, on parts of all the roads and all the regions. And it is very, very dangerous.
Now, to ask the central government what they can do about it, they're quite limited what they can do about this. So you almost have to take care of yourself as you go about doing the business, and as you discuss and negotiate with the leadership of Afghanistan right now. But they need help. They do not and cannot, right now, control the whole area.
KING: Secretary Rumsfeld the other day was saying that he was not in favor of any negotiations, and certainly not any long negotiations between local Afghan tribal leaders and those Taliban forces who might be protecting Mullah Omar at the moment, near Baghran. We are two days now removed from the secretary's remarks. We hear those negotiations are still ongoing. Is that a concern to you, and is it evidence to you that with the new government in place in Afghanistan, that perhaps there is some tension between the domestic political situation and the U.S. military objectives?
GRANGE: Well, first of all, I think what the secretary of defense is talking, negotiating the release of Omar or bin Laden or any other high ranking lieutenants in the Taliban and al Qaeda rank- and-file. They -- we don't negotiate with terrorists, and our end result is to kill or capture those on this list that have -- that we want to bring to justice or take out.
And they're talking about negotiations, is just the surrender of these security forces. I don't think that we would ever agree, nor should we, with the release in those negotiations of these -- the people -- the killers that we're going after. So, no, we cannot accept that. I don't think we will. And I don't think that the leadership of Afghanistan expects us to.
KING: And, General, lastly, we have seen in the past 24 to 48 hours, distribution of a new leaflet in the psychological part of the warfare, if you will. But it also is an effort to help the search for Osama bin Laden, whose whereabouts still remain a mystery to U.S. officials. You see pictures of what Osama bin Laden might look like, had he shaved off his beard and adopted western clothing. You also see in this leaflet, it says Osama bin Laden, "the murderer has abandoned you."
Can you tell us, in terms of military planning, how does something like this factor into planning an operation, and what is your sense of how effective or ineffective something like this might be to the actual search for bin Laden?
GRANGE: I would say it's very effective. It's part of the information operations campaign. Information, perception management, psychological operations are extremely powerful. These, what they call soft -- S-O-F-T -- soft skills are just as important as dropping bombs. And when you combine kinetic force with these type of information operations, it's very powerful. And it's a necessity. Leaflets are one means of getting the word out. There's many other means.
And it's very important that the people understand just the truth. And the truth is that these leaders are cowards. They did abandon their troops. They did abandoned their cause, except for the terrorist part of it. And this will help, hopefully, get someone to turn them in.
KING: General, thank you once again for your thoughts today. General David Grange joining us today, CNN military analyst from Chicago. Thanks again, General.
GRANGE: Thank you.
KING: With unemployment numbers up, so is the political heat. Battling economic agendas dominate the day. We'll get both sides when we return.
And later, a new twist on an old tactic: mind games in the war on terror.
(COMMERCIAL BREAK)
KING: While the war on terrorism dominates the news, the public seems to be more concerned with the state of the U.S. economy. A rising unemployment rate and a lackluster holiday shopping season are just the last blows to an economy that was already slowing, and then was devastated by the September 11th attacks.
The debate over how to stimulate economic growth is turning into a battle in Washington, with the Senate's top Democrat today lashing out at the Republicans' economic agenda. Here is more.
(BEGIN VIDEOTAPE)
BUSH: I want to thank you for taking time out of your day to come and witness my hanging.
(LAUGHTER)
KING (voice-over): A bit of humor and nostalgia back home in Texas, from a wartime president now bracing for a major challenge on the domestic front. The unemployment rate shot up to 5.8 percent last month. It was 4.2 percent when Mr. Bush assumed the presidency. Mr. Bush inherited a roughly $240 billion annual surplus from the Clinton administration, but the government is back in the red now. And Bush aides now project deficits perhaps through the year 2005.
The president blames a stalled economy and the national crisis. Democrats see things differently.
DASCHLE: Not only did the tax cut fail to prevent a recession, as its supporters said it would. It probably made the recession worse. It also put us in an unnecessary fiscal bind at the worst possible time -- at a time when we need to fight both a war and a recession.
KING: This debate will dominate the midterm election year, and the fight for control of Congress.
BILL MCINTURFF, REPUBLICAN POLLSTER: Is the surplus gone because Republican tax cuts, or is this a terrorist economy where the federal government did the right thing by spending billions of more dollars to make this country safer? And whichever of those world views wins, I think, wins the election.
KING: Wartime politics is tricky business. The Democrats are taking pains to blame Republican policies, more than launching direct attacks at a popular Republican president.
STANLEY GREENBERG, DEMOCRATIC POLLSTER: The core of the problem is the Republicans in the Congress, and I think, Democrats, have every reason to challenge their priorities.
KING: Mr. Bush says he will return to Washington, hoping for bipartisan cooperation. And his domestic priorities are quite familiar, dominated by the unfinished business of 2001. He sold the Congress on his big tax cut and an education reform plan.
But still to do: a so-called HMO patients bill of rights, a Medicare prescription drug benefit, and the president's faith-based initiative.
(END VIDEOTAPE)
And that list of the president's unfinished agenda, a reminder of how much things were changed by the events of September 11th. The president's domestic agenda held up, in part, by partisan divides in the Congress, then by the focus on terrorism late in the season. All of that now carries over into the new year's economic debate, an election year debate.
And as you just saw, the Senate majority leader Tom Daschle today, is attacking the Republican handling of the economy. In a speech, he blamed President Bush's tax cuts for wiping out budget surpluses and for the worsening recession. Earlier I spoke with the senator about his address and his proposals.
(BEGIN VIDEOTAPE)
KING: Senate majority leader Tom Daschle, thank you so much for joining us. I want to start first with the big picture. You say in your speech today that Washington needs to return to fiscal responsibility, which means in your view, Washington has abandoned fiscal responsibility. You also say at one point, the question is not who is to blame, but you go on to say, a year ago, we had the resources and the flexibility to make virtually any urgent investment we needed. We do not have that flexibility and those resource today.
Now, two big things have changed in the past year. A Republican took control of the White House and the Democrats took control of the Senate. I don't assume you're here today to say that it's your fault.
DASCHLE: Well, we don't want to say whose fault it is. I don't think that gets us anywhere, John. What we want to do is to see if we can find ways which to reach common ground, first to make the economy stronger, and secondly, to put back into place the fiscal discipline that we were beginning to take almost for granted. That is essential, before we do anything else. I think it's essential to restore the confidence of the American people.
KING: But you blame the tax cut. You say the tax cut was too big, and that that is the reason we have deficits instead of surpluses. You also say, embracing the Clinton administration approach, and Bob Rubin's approach, that surpluses are the key to the markets if you want to keep down long-term interest rates -- mortgage rates, car rates -- that you believe are more critical than any short term tax cuts to anybody.
How do we get back to a surplus? Do you want to repeal the Bush tax cuts, would you cut specific spending items? How do we get back to a surplus in this recession economy environment?
DASCHLE: Well, I think it's prudent fiscal policy. It's a recognition that we've got to grow the economy. That is why the economic stimulus package is so important. We've got to use the tools we've used in the past. I said in my speech, John, that this is economics experience versus ideology. We've got the experience, we know what works. They've got an ideology that seems to be so hardened that they'll apply the tax cut regardless of whether we have a recession, or the growth in the economy we had before. That doesn't work. We need all the tools in the economic playbook.
KING: I know you say it's the responsibility of the president to lead and present a plan. But, at a time when there is more spending on the war overseas, more proposed spending for homeland security here at home, more proposals for spending on other issues as well, are the Democrats prepared to say: Here is a list of specific spending cuts, here is how we get back to the surplus?
DASCHLE: Absolutely, we are, and believe strongly in the need for a pay-as-you go budget. That's why we want to look very closely at what the president proposes, perhaps, later on this month. We think it's very important that we put that fiscal responsibility and prudence back into place. It does require some very tough choices. We can't have it all. That's why I think following the budget, working with the administration to ensure that we put that responsibility back in place, is so essential.
KING: OK, we will revisit the issue of specific cuts down the road. Let's look, now, at your proposals on the short term debate about economic stimulus, about getting the economy back on track. Two new items today in your speech. You talk about a tax credit. Any business that hires new workers, brings laid-off workers back to work, you would offset the cost of the payroll tax through a tax credit to them.
You also talked about a new depreciation schedule, allowing businesses to write off investments in new equipment. Key, also, to economic growth, 40 percent of those costs in the first six months, 20 percent for the rest of the year. That is more generous than Democrats were proposing just a few weeks back, when the negotiations broke down and everyone went home for holidays.
Expensive proposal. A, can you pay for them in a stimulus plan, and, B, do you think that leads you toward a compromise with the president?
DASCHLE: Well, John, all of our proposals still cost less than what the Republicans had on the table at the end of the last session. What we were trying to do today is to find a way to reach more common ground. This was our new opening, option, opening opportunity for us to see if there might be a way to break the impasse. That is what we want to do -- find ways with which to accomplish something here that we haven't been able to accomplish over the last couple of months.
This does what I hope the Republicans believe we need to do: give business the chance, the opportunity, the incentive, to create new jobs.
KING: What specific things do you think the Republicans should take off the table, if they are interested, as you say, in reaching common ground?
DASCHLE: Well, by giving business the kind of tax relief that we provide, we are also getting something in return: new jobs, or additional time for the jobs that are already there. What the Republicans get with the advocacy of their AMT repeal is nothing. There is nothing stimulative about the AMT repeal. So I think this job creation tax credit is a real opportunity for us, not only to get something, but help businesses at the same time.
KING: As you know, a fair amount of partisan politics in this debate. It's about economic policy, but also about politics, especially now we are in an election year. You say you want common ground. The senior Republican on the Senate finance committee, Chuck Grassley, he says -- quote -- "you have been like a stonewall, blocking any bipartisan progress on economic growth." And from the president's camp today, I want you to listen to Karen Hughes, a short time ago. She's with the president down in Crawford, Texas. She said, based on what she knows about your speech today, that perhaps you went home and got a message.
(BEGIN VIDEO CLIP)
KAREN HUGHES, COUNSELOR TO THE PRESIDENT: I'm hoping that Senator Daschle went home over the holidays, listened to the people, and decided that President Bush may be right about the need for an economic stimulus package.
(END VIDEO CLIP)
KING: Your reaction to that, sir?
DASCHLE: Well, we've been in favor of an economic security package from the very beginning. But we're not in favor of one that does more harm than good. What we want to do is to find ways in which to see that we can work together to get something accomplished. This was my latest proposal. My hope is that we can. I'm going to continue to oppose bad policy, John, but there isn't any need to stonewall, to obstruct, if we can find the kind of common approach that both Republicans and Democrats need to pass something.
We've done it on terror. We've done it on all the legislation response to the attack. We ought to be able to do it on the economy as well.
KING: Wartime politics can be tricky business, sir. I'm trying to get a sense of your criticism today on the homeland security front. You were saying the administration was not prepared, that the country was not prepared. That the administration now is not willing to spend enough money, at least, not quickly enough, in your view. Do you believe that a fair criticism? The White House says it was the president who came forward first -- perhaps in response to tragic events -- but it was the president who led on this issue.
DASCHLE: Well, all I know is that the Republicans over the last 30 days or so have opposed any increase in commitment to homeland security. A $15 billion proposal was on the table right before the end of the session. They turned it down. Now they're asking for $15 billion, and I don't know what's changed. If it's right now, it should have been right then.
But regardless, we're prepared to work with them. Because we know additional commitment to homeland security is not only good economics, it's the right thing to do for the defense of our country.
KING: This, the first voice of the Democrat Party on economic policy in this Congressional election year. You are, by all accounts, now the major spokesman for the Democratic Party, the Senate majority leader, the senior Democrat in Washington. Was this today not just the beginning of framing the economic debate in a Congressional election year, but perhaps, a first toe in water, testing the waters for the Tom Daschle for president campaign in 2004?
DASCHLE: John, I think it's way too early to be thinking politics, either Congressionally or presidentially. What we've got to do is put this economy back on track. We've got a big, big job to do. There will be plenty time for politics down the road. What we've got to do now is do the right thing, with regard to public policy. And that means solving the economic and fiscal problems we're facing as a country. We can't do any better than that. Republicans and Democrats need to do it together.
KING: And I understand, sir, in closing, while you were home for the holidays, a bit of good news?
DASCHLE: Good news, that's right. A grandfather to be, and a boy at that. So I'm pretty excited.
KING: All right. Will he be a Democrat?
DASCHLE: He's going to be, I'm sure. It's in the genes.
(LAUGHTER)
KING: Senate majority leader Tom Daschle, we thank you for your time today, early in the new year.
DASCHLE: Thank you, John.
(END VIDEOTAPE)
KING: Now, Republicans say in some cases, Daschle is taking items long supported by the GOP and offering them as his own initiatives. The White House also was quick to react to the senator's speech and his proposals. Earlier I spoke with Mary Matalin, assistant to President Bush and counselor to Vice President Dick Cheney.
(BEGIN VIDEOTAPE)
Mary Matalin, in his speech today, the Senate majority leader Tom Daschle says, not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse. What do you say to that?
MARY MATALIN, ASSISTANT TO PRESIDENT BUSH: Well, John, that's contrary to every economist's view. The economist at the time of the passage of the tax cut said that it would contribute growth to the economy, somewhere between half a point and a point and a half. And the only reason we were starting to come out of the recession was because of a tax relief.
KING: He said, a year ago Washington had fiscal discipline and that today it does not. Obviously, the big change over the past year has been who occupies the White House.
MATALIN: Well, over the last year, there has also been a change in the leadership on the Senate side. And all the legislation that the president has proposed and the House has passed to stimulate and secure the economy have stalled in the Senate, from comprehensive energy legislation, to opening our markets, to stimulus packages, to dislocated workers, benefits, all of that has passed and proposed by the president, stalled in the Senate. This man needs to lead or get out of the way.
KING: Well, on that question, he proposed today some changes to the Democratic stimulus plan. As you noted, there was a disagreement between the president and the Senate Democrats at end of the session a few weeks back. Senator Daschle made two new proposal days today: incentives to business to hire new workers, to invest in new equipment. And he says now that he is seeking common ground and the Republicans must back away from some of the tax cuts in your proposal that he believes are irresponsible.
Is this a true step toward compromise today?
MATALIN: Well, if it was a step toward compromise, it was one that could have been brought before the Senate and the House adjourned. The Senate managed to pass not one, but two stimulus packages. And the proposals offered by the Senate majority leader today may be a compromise, but they are ineffective. They don't affect any more than 0.2 percent of employers' effective wages.
So it is -- as a federal -- Independent Business Association says, it is a seven-point plan to protect the senator's backside. It is a political plan. And if it had any real merit to it, it could have been proposed when the president was working in a bipartisan way, diligently, before the holidays. And since that, since October 4, when the president first tried, in a bipartisan way, to get economic- security agenda passed, there have been 943,000 jobs lost and a projected another 300,000 if we don't pass this fast. So let's get on it, Senator Daschle.
KING: You say it is a political plan. You are married too a Democrat. His name is James Carville. In 1992, when you worked for the first President Bush, he coined the phrase -- quote -- "It is the economy, stupid." That hung in his office. That was Bill Clinton's motto. He knocked President Bush from office.
Do you see the Democrats trying to do the same thing again: support a wartime president when it comes to overseas and go after the wartime president here at home on domestic policy, especially the economy?
MATALIN: Well, of course, you bring up the real point.
What this plan is about is not progress; it is about politics. And it is really sad. And Americans will recognize it's another attempt. It is an old attempt. It is a pretty stale political version of a playbook that the Democrats have played over and over. But this president sees America as being able to rise to its challenges, to fund its priorities, to protect and secure ourselves, to face the recession and terrorism.
And the senator, unfortunately, the leader of the Democrats, the highest-ranking Democrat in an election year wants to play politics. That is a losing game plan, whoever is proposing it.
KING: Well, you noted he is the highest-ranking Democrat in Washington. He also said today that this country still has desperate needs on the homeland security issue: more spending to protect nuclear power plants, among other things. And he blamed Republicans. He says the Republicans blocked additional spending in the last session of Congress. Is that a fair criticism? MATALIN: The Republicans funded and the president put forward and passed as quickly as possible every emergency need, every need that was met relative to September 11. It was this president, not the Democrats -- it was this president who proposed, for the first time in our history, a comprehensive national strategy for homeland security and managed to hire an extraordinary person, Governor Tom Ridge. He pulled him out of his governorship in Pennsylvania, a very important state, to come and head up this office. And he is doing that.
And every need was met, as I said earlier. And the governor has put together a comprehensive plan, which he will unveil, which will secure America and its borders. We have not had to do this before. And it was this president who got it in place. And we now have a plan that will detect, deter and protect Americans at home.
KING: The president said in Crawford, Texas today that when he returns to Washington, he hopes for bipartisan cooperation. But you had a speech from Senator Daschle today that you call a political plan, Democrats positioning for the congressional election year -- the president himself going to the West Coast over the weekend, other travels early next week, to try to frame the economic debate and the domestic agenda debate for the new year in his favor.
Are we get getting off to a start that suggests to you that, yes, there is unanimity when it comes to the war, but there is bald partisanship when it comes to the domestic agenda?
MATALIN: Well, that is the Democrats' political plan, but this president is not going to California and Oregon on any political trip. He is going to talk about a plan for economic security, a comprehensive plan, which includes a comprehensive national energy plan, which includes trade, opportunities to open our markets.
It is a big view. It is one that rises to our challenge to meet this recession. It is a real plan. It is real policy. It's not politics. And that is what the president is going to do when he goes to California and Oregon. If they want to play politics, fine. This president came to Washington, has been in Washington, will stay in Washington passing good policy.
KING: Mary Matalin, joining us today from the White House, thank you very much.
MATALIN: Thank you, John.
(END VIDEOTAPE)
KING: We also learned today one of the president's stops in his travels next week: at the world's best high school, Boston Latin School. I still can't figure out how one of their graduates, yours truly, managed to find productive work.
Now let's check on some stories in today's "Newswire."
Jurors in the manslaughter trial of Thomas Junta today saw graphic autopsy photos of Michael Costin. He died after a confrontation with Junta over rough play at their sons' youth hockey practice. A medical examiner testified Costin was beaten so badly he suffered a torn artery to the brain, a form of stroke.
Jury selection will begin Monday in the Andrea Yates capital murder case. Yates is the Texas mother accused of drowning her five children last June in her home. Her attorneys say she is not guilty by reason of insanity. Testimony in the trial is not expected to begin until next month.
It was a beautiful day for the Irish rock band U2. The band's latest album led the list of Grammy nominees, including for key album, song and record of the year categories. Newcomers India.Arie and Alicia Keys were close behind. Winners will be announced February 27.
And basketball legend Michael Jordan is on the verge of another career milestone. The Washington Wizard needs only 15 points to become the fourth player in NBA history with 30,000 career points. He could make them in tonight's game against his old team, the Chicago Bulls.
And, my friend Wolf, if you are watching, you have picked a bad night to be out of town.
We'll get back to the war on terrorism in a moment, including the war for the Afghan mind. Can photos of bin Laden in a business suit do what months of searching have not? Also, the seizure of a huge arms shipment causes a huge problem for Yasser Arafat.
Stay with us.
(COMMERCIAL BREAK)
KING: In a moment: an effort to mess with the psyches of Osama bin Laden's fighters.
First, the latest developments in America's new war: A member of the Army special forces was killed today in an ambush in Eastern Afghanistan. And Pentagon officials tell CNN a CIA officer was wounded. The small American team in the region was evacuated by air. Today's death is the first of a U.S. soldier in hostile activity in Afghanistan.
The man second-most wanted by the Pentagon is said to be surrounded. An Afghan official says Mohammed Omar, the leader of the Taliban, is encircled near the city of Baghran. The Associated Press reports that local tribal leaders are seeking Omar's surrender.
Another top Taliban official is expected to become a prisoner of the U.S. military as soon as tomorrow. Former Taliban Ambassador Abdul Salam Zaeef is awaiting deportation by Pakistan. U.S. officials will not confirm the charges he might face.
In a doctored image produced by the U.S. military, Osama bin Laden looks more like a Western playboy than the Saudi militant he is. The image is on a leaflet being dropped from U.S. warplanes on possible al Qaeda positions. It includes some unflattering statements about bin Laden and is meant to encourage al Qaeda fighters to surrender. The leaflet dropped is so-called psychological operation. It's one of the military's so-called psychological operations. And it's not the first time this tactic has been employed in America's new war.
Joining us now to talk about this tactic: Jay Farrar of the Center for Strategic and International Studies.
Effective?
JAY FARRAR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: It can be. And it can be effective because you are basically trying to discredit him and tell people that he is not what he has claimed to be all along. And so, at times, with different people, it can be. It just depends on the audience that you reach.
KING: Who, do you think, is the target audience? Is it al Qaeda forces who might still be protecting bin Laden or might know perhaps where he passed through last? Or is it the rank-and-file Afghan people?
FARRAR: It is more the rank-and-file. You won't get the hard- core. They have bought in with him and they're going to stick this out. But you may get some people on the fringe the have been part of the Taliban force or al Qaeda who have not been brought into the inner circle, so to speak. And you will get people who are not part of that movement at all who see an opportunity to possibly take care of themselves in some way.
KING: Two approaches in this most recent leaflet: One shows, perhaps, what Osama bin Laden might look like were he trying to elude U.S. forces on the border of Pakistan, perhaps, beard shaven, a Western suit and dress. Why something like that?
FARRAR: Because that, more than anything, discredits him in people's eyes. He has claimed to be something very special, with some sort of religious significance. This puts him in Western dress and shows people that he is not what he has claimed to be all along.
KING: And "The murderer and coward has abandoned you." What is the target there?
FARRAR: That's exactly right.
It's to tell them that he has basically used you. He has used you. He has used your country. He has used the beliefs that you have in this religion that he has claimed allows him to go out and foment the killing of innocent people.
And they are basically saying he has walked away for himself, not to stick with you.
KING: How do you think through a strategy to do something like this, a psychological operation? We have seen in the past the leaflets with Osama bin Laden and Mullah Omar in the crosshairs of a rifle sighting. We have seen publication of the reward that the U.S. State Department has out for bin Laden, and any other terrorist leader, for that matter -- now this.
Is this something that is thought of as a two-, three-, four-, five-leaflet, two-, three-, four-, five-month strategy, or do you make it up as you go along, adapting to the circumstances on the ground?
FARRAR: Sometimes you make it up as you go along, depending on how circumstances change. But the biggest thing is, you bring in experts.
And in this case, the Army has brought in experts who know Afghanistan, who have long history there. And they understand the mind-set of the people they are dealing with. And so they try to focus almost subtle points on what would get the people that they are targeting to give this guy up and would cause them to doubt what he has been telling them all along.
So there is a real subtleness in some of this, as well as the overt, putting him in a suit and dropping a leaflet.
KING: You mentioned the potential upside of showing him looking dressed like a Westerner. Is there a potential downside, especially when you have had, not in large amounts, but significant number of people speaking out throughout the Arab world, saying the tape was doctored, the United States is fabricating the evidence? Is there is a potential downside in this?
FARRAR: Yes, I do think there is a potential downside. And that is something that is weighed when they come up with these various campaigns. They look at options and they discuss back and forth what the downsides are. And I believe, in this case, they probably decided that the downsides were not so great, that they were willing to take this chance.
KING: Yet still no evidence this tactic is working so far.
FARRAR: Not yet.
KING: Is it a cumulative thing?
FARRAR: Yes, it really is a cumulative thing. And it is really hard to tell how far you are getting with these campaigns until you have a final result. And then you can talk to people.
KING: Jay Farrar, thank you for your time and your thoughts today.
FARRAR: You're welcome.
KING: Israel's seizure of an arms shipment to the Palestinian Authority is clouding U.S. envoy Anthony Zinni's hopes of negotiating a Mideast cease-fire.
CNN's Mike Hanna reports on this latest bump in an already very rough road.
(BEGIN VIDEOTAPE) MIKE HANNA, CNN CORRESPONDENT (voice-over): A massive cache of weapons found aboard a vessel captured by Israeli forces in the Red Sea. Israel says the vessel was owned by the Palestinian Authority, and among the crew were members of Palestinian security forces. Palestinian security forces are permitted to carry light weapons, but Israel says this shipment included sophisticated missiles and rocket- propelled grenades that can take out tanks.
SHAUL MOFAZ, ISRAELI CHIEF OF STAFF: Once again, we see that the Palestinian Authority is not committed to observing any agreement, and is capable of posing a threat through the use of long-range weapons.
HANNA: The Palestinian Authority has denied the Israeli charge of direct involvement in the smuggling.
NABIL ABU RUDEINEH, ARAFAT ADVISER: We know nothing about this ship which the Israelis are talking about, and we are going to investigate to see what's going on, though we consider it an Israeli propaganda in order to sabotage the mission of General Zinni, which is successful so far.
HANNA: Palestinian sources say the matter was raised in a meeting between Yasser Arafat and the U.S. Envoy Anthony Zinni, who's returned to the region in a renewed bid to implement a lasting cease- fire. Despite the weapons discovery, Zinni sounded an optimistic note after his talks with the Palestinian leader.
ANTHONY ZINNI, U.S. MIDDLE EAST ENVOY: I'm here to, first of all, in a short period of time to make an assessment on the ground and to restart the process that we began the last time here. And I'm optimistic, I'm hopeful, and I feel that we have the conditions that are right to make progress this time.
HANNA: Earlier in the day, Zinni held talks with the Israeli prime minister and senior members of his Cabinet, and in the next few days will be holding meetings with security chiefs from the two sides before returning to Washington and reporting to the U.S. secretary of state.
(on camera): Anthony Zinni cut short his last visit to the region in mid-December after a massive upsurge in the level of violence. This time a tentative calm has prevailed. But the ongoing argument as to whether or not the Palestinian Authority is involved in weapons smuggling, it's clear evidence that both sides remain as suspicious of the others pledges of peace as ever.
Mike Hanna, CNN, Jerusalem.
(END VIDEOTAPE)
KING: Checking other international news now: Firefighters and weather forecasters predict that the bush fires wreaking havoc near Sydney, Australia will continue into next week. Two more arson suspects are under arrest, for a total of 23, including 15 juveniles.
Argentina's new president says the devaluation of the peso is -- quote -- "a given." In a televised speech to his nation today, Eduardo Duhalde also admitted that Argentina's economy is bankrupt. And he indicated he'll take action to protect the country's industries.
The world's oldest man has died in Sardinia, Italy; 112-year-old Antonio Todde insisted the secret of his longevity was a glass of red wine every day. He lived on a simple diet based on pasta, vegetable soup, red meat, and cheese.
Was it the first speech of a presidential campaign? Bill Schneider is here to talk about Tom Daschle's performance today and what it might mean for 2002 and beyond.
(COMMERCIAL BREAK)
KING: Welcome back.
As we told you earlier, Senate Majority Leader Tom Daschle today delivered a speech outlining a Democratic agenda to stimulate the economy. Daschle has been mentioned as a potential presidential candidate to challenge President Bush in 2004. But his staff is playing down any interest in the next presidential campaign.
For a discussion about Daschle's political plans and the environment here in Washington, we are joined by CNN senior political analyst Bill Schneider.
Bill, this was supposed to be the president's month. He is about to come off his vacation, travel the country to talk the economy. He is working on his first official State of the Union Address. And yet it is Tom Daschle stealing the headlines today.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right. Who would have dreamed that the first big economic speech of 2002 would be given by the Senate majority leader, majority leader by one vote?
We are supposed to be hearing leaks of the president's State of the Union. What is he going to say? Every day, he is supposed to come out with a new proposal and the press talks about it. But what Tom Daschle did was steal the media spotlight. The president is going out this weekend to California to Oregon, and Daschle got a jump on him.
KING: The Democrats obviously think they are safe now: Support the president when it comes to the war. Go after him on domestic policy, especially on the issue of the economy.
Are they safe? And what are the risks? And, in answering the question, will this increase the burden on the Democrats if they want to raise this issue? How would they get to back to a surplus if they say the deficit is the problem?
SCHNEIDER: A lot of questions. But, first of all, are they safe?
Well, they've got to make a distinction between the war, where they have no daylight between themselves and the president. Tom Daschle today was very clear. He said the president is doing a superb job in handling the war. I think most Democrats feel that way. They give him a 76 percent job approval rating. So he is speaking for most Democrats.
The economy: a different story. He is maintaining that distinction. I think most voters buy that distinction. They think the war is going great but the economy is not going great. And that is what Tom Daschle and the Democrats are moving in on right now. What are they going to do? Well, he didn't propose anything radically new. He complained bitterly about the president's tax cuts. He said the Republican tax cuts have created a terrible deficit, that it is going to have long-term implications for the economy; it was a disastrous mistake.
But you notice he didn't, in his speech, talk about repealing those tax cuts.
KING: Is there a rerun here of 1992? I was joking with Mary Matalin. Her husband, James Carville, coined the Clinton phrase, "It's the economy, stupid." Are we seeing a very similar strategy here again?
SCHNEIDER: The Democrats hope to rerun 1992. But this president, of course, knows exactly what happened to his father. He is focusing on the economy, as Clinton used to say, like a laser beam. It is going to be the focus, clearly, of his State of the Union speech, as well as the war.
Interestingly, the Bush White House has changed the term from economic stimulus, which they don't like, to economic security. It is a very subtle effort to say that this is part of the war issue. The economy, the war, they are all wrapped up together.
And there is the hint that the real economic problems today are caused by Osama bin Laden. This isn't the Bush recession. It is the Osama bin Laden recession.
KING: And, quickly, what about the players? Dick Gephardt has been to Iowa. He is going to New Hampshire this month. John Kerry of Massachusetts has been up to New Hampshire. Tom Daschle, does he want to run for president?
SCHNEIDER: Tom Daschle is the alpha Democrat right now. He is the Senate majority leader. Dick Gephardt is the minority leader of the House. Gore, Clinton, they haven't been heard from. Others, well, we see a list. But right now, Daschle has the spotlight. He is the only Democrat with real power in Washington. He is the leader of the opposition. He is making the most of it. And if we want to mention him as a presidential contender, he doesn't seem to mind.
KING: Bill Schneider, thank you. Proof today even as we track the war -- very important developments there -- we will have a major developing story, the economy and the politics of it, here in Washington in the month and months ahead. Republican strategist Mike Murphy and Democratic strategist Peter Fenn debate Bush vs. Daschle on "CROSSFIRE" tonight, 7:30 Eastern, 4:30 Pacific.
And coming up: big news for students of journalism and the law, as a crime writer is released from jail. And later, the president unveils a little humor.
Stay with us.
(COMMERCIAL BREAK)
KING: Now checking these stories on today's "Newswire": A crime writer who spent almost six months in a Houston, Texas jail for protecting her sources says she's very grateful to be free. Vanessa Leggett refused to surrender her notes for a book on a 1997 society murder case. She was released today because the grand jury demanding the notes ended its investigation.
In Claremont, New Hampshire, an 11-year-old boy who escaped death after falling through ice Tuesday had a televised reunion with his rescuers this morning. Firefighters slid on their stomachs to pull Curtis Shattuck from the Sugar River. Hospital officials say five more minutes in the cold water could have killed him.
Astronomers say a powerful burst of energy from the sun today was truly extraordinary. The eruption unleashed billions of tons of particles at speeds of 2.2 million miles an hour, forming a visual spectacle resembling a dragon. Get a glimpse at CNN.com/space.
Let's go to New York now and get a preview of the "LOU DOBBS MONEYLINE," which begins at the top of the hour. Jan Hopkins is sitting in today for Lou -- Jan.
JAN HOPKINS, "LOU DOBBS MONEYLINE": Thanks, John.
Coming up on "MONEYLINE:" We'll have the latest on the U.S. soldier who was killed in Afghanistan today. And we'll have a report from the Pentagon and be joined by General David Grange. We'll also take a look at the battle over the economy and Senator Tom Daschle's new plan to revive it. And with the Grammy nominations announced today, we'll take a look at the industry -- all of that and more at the top of the hour -- John.
KING: Thank you, Jan.
They say every picture tells a story. Have you heard the one -- it's a new one -- about the eternity togetherness for two Texas governors? The wisecrack of the day is just ahead.
(COMMERCIAL BREAK)
KING: This program note: Pat Buchanan discusses his new book, "The Death of the West," tonight on "NEWSNIGHT WITH AARON BROWN," 10:00 p.m. Eastern, 7:00 Pacific. Finally, President Bush went to Austin today for the unveiling of his official portrait as governor of Texas. During the ceremony, the president called his six years as governor joyous. And he got a hearty laugh at the expense of the Democrat he unseated back in 1994.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is an honor to be hanging with these men. It's also amazing to think it will be here for a long, long time. And I just hope Governor Richards doesn't mind being my neighbor for eternity.
(LAUGHTER)
(END VIDEO CLIP)
KING: It was Governor Ann Richards who once said the elder George Bush was -- quote -- "born with a silver spoon in his mouth."
I'll be back in one hour with the "War Room." Former National Security Adviser Robert McFarlane and former CIA chief of covert operations in Afghanistan Milt Bearden join me. That's 7:00 Eastern, 4:00 Pacific.
I'm John King in Washington. Wolf will be back next week. Thanks for hanging in with me this week.
CNN's coverage of America's new war continues now with "LOU DOBBS MONEYLINE," which begins right now.
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