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Should Congress Have Passes a Stimulus Bill?; James Lilley Discusses China; Mark Russell Offers Unique Christmas Carols

Aired December 22, 2001 - 19:00   ET


ANNOUNCER: Live from Washington, the CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG, and merry Christmas. I'm Mark Shields with the full CAPITAL GANG, now that's Al Hunt, Robert Novak, Kate O'Beirne and Margaret Carlson.

At mid-week, President Bush declared victory in the quest for an economic stimulus bill.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I am proud to report that members of both political parties in both bodies of Congress have come to an agreement as to how to stimulate our economy.


SHIELDS: The Republican House passed the bill, but the leader of the Democratic Senate rejected it, and Congress went home for Christmas with no action on a stimulus bill.


SEN. TRENT LOTT (R-MS), MINORITY LEADER: We know full well that there would be a clear majority in the Senate, bipartisan once again, for a stimulus package that would help the American people get a job and keep a job. But Senator Daschle, thwarting the will of the president, the House of Representatives and the Senate, has made it clear that he would object to bringing up that legislation.



SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: It's amazing to me that there is the intransigence on the other side when it comes to helping laid-off workers. That's really what this debate is all about now.



BUSH: I'm not angry at all, I am joyous. No, but I don't intend to bring them back early.


SHIELDS: Bob Novak, after the failure of the stimulus bill, who are the winners and the losers here?

BOB NOVAK, "CHICAGO SUN-TIMES": I think the big winner are the American people, because all those versions of a stimulus bill were inadequate. What they need is deep tax cuts, including a capital gains tax cuts. What they had in there was not going to help the economy. But politically -- this is all about politics, Mark. I think you understand that.

SHIELDS: Thank you.

NOVAK: And politically, I think the president was the winner, that the Democrats thoughts ever since September 11 they could play the Bob Shrum/James Carville game, which is support them on the war and attack them on domestic. They thought he was a pushover. He wasn't a pushover. And Senator Daschle, who is very smart and very effective, had a very bad month of December, culminating in the fact that he had a -- he is a majority leader without a majority, because majority of the Senate was ready to pass that bill. He wouldn't let it come up. And so, he is the political loser.

SHIELDS: Al Hunt, George W. Bush big winner, Tom Daschle big loser?

AL HUNT, "WALL STREET JOURNAL": No. No, absolutely not. I don't think there is any big winner or big loser in this. I agree with Bob. It was a terrible bill, it shouldn't have been passed. Of course what Bob proposes would not have been stimulus, and that was the benchmark that was laid down about two months ago by the Budget Committee chairmen and the ranking members on both sides, by Alan Greenspan, by Bob Rubin, and it was Bill Thomas who chose to totally ignore that and instead create a bill that was...


HUNT: ... he was going to grease the palms of campaign contributors and then give away the K Street. That's where this whole thing went awry.

But you know, I love those Republican senators coming out with a line that Trent Lott had about Tom Daschle. Frank Luntz who was the Republican pollster and strategist met in the Republican caucus and he gave him these talking points. He said, here's what you do, you come out and you go after Daschle, and he said, it's time for everyone to start saying talking about Daschle and the Democrats using the word "obstructionist." We have to do to Daschle what they did to Gingrich.

I mean, I'll tell you something, I knew Newt Gingrich, as you did. Tom Daschle ain't no Newt Gingrich. He is much smarter than that. They've done this in South Dakota. They ran vicious -- they being conservatives -- ran vicious ads out there. Karl Rove went out there and criticized him, Karen Hughes has done radio shows out there, and they just got a poll back, and they're up three points, there's a 70 percent job approval rating for Tom Daschle. It's not going to work.

SHIELDS: Al makes an interesting point on South Dakota, where Bill Janklow, the retiring Republican governor, is thinking about running for the U.S. House, and said: "I am close to both George W. Bush and Tom Daschle, the two most powerful men in the country. Therefore, I will be elected to the House." So, I mean, you wonder how much of a political problem Tom Daschle has.

NOVAK: Is this all about South Dakota? I'm confused.


NOVAK: I wasn't talking about South Dakota, though.


KATE O'BEIRNE, "NATIONAL REVIEW": Tom Daschle won't be running when other Democrats are, and polls are showing -- other recent polls this week -- that by a very wide margin, the public agrees with the Bush Republican approach, that it's more important to cut taxes on business -- the public recognizing this is a business-led recession -- than it is to give unemployment benefits, although the package that Tom Daschle blocked had $12 billion in increased unemployment and health care benefits.

I agree with Bob. I think that the economy doesn't need the kind of modest package that they were able to finally agree on with some Senate Democrats. And politically, I don't think George Bush needs it at all. If the economy recovers on its own, nobody is going to much care whether or not there was a stimulus package. The president and incumbents will get credit for. And if it doesn't recover next year, I think it's better for George Bush to be able to say, Democrats running for re-election blocked a good stimulus plan than have passed what apparently wound up being an ineffectual plan.

SHIELDS: Margaret Carlson, tell us who is right here.

MARGARET CARLSON, "TIME" MAGAZINE: About three weeks ago, both parties decided that they weren't going to have a bill, and they were going to begin the process of blaming each other. And it wasn't, you know, just the ads, but Ari Fleischer from -- during the White House briefing started demonizing Tom Daschle.

And as Al said, it's very hard to do. I mean, Newt Gingrich did himself in. Tom Daschle is much smarter than that. He has a decent relationship with George Bush. I did not see the president using up much of his capital on this bill. He went up there the last day when it was surely too late.

And the press -- the public relations war was won when the House Republicans tried to roll back the alternative minimum tax and give millions of dollars to corporations.

O'BEIRNE: The package that -- that has a majority support in both Houses, had accelerated tax cuts for middle-income families...

NOVAK: Yeah.

O'BEIRNE: ... making 48,000, dual-work wage earners, it had $12 billion in expanded benefits. That package has a majority in both houses, and that's the package...


NOVAK: Including the Senate.

CARLSON: But it got a bad name for the effort to roll back. But that is the face on that bill.


HUNT: It was a scandalous bill, and they turned it into an outrageous bill.


HUNT: The rich got far more than those middle-income people.

SHIELDS: I will have the following to say, the White House is absolutely spooked by middle mannered, soft-spoken Democratic Senate majority leader. They think that George Mitchell undid the first President Bush's term.

NOVAK: He did. He did!

SHIELDS: Like somehow in a Svengali-like way, Rasputin-like, getting him to drop his "no new taxes" pledge. I couldn't agree more than with Margaret when she said, here's a guy with 86 percent approval, President George W. Bush, and he doesn't get involved in the process until the final 36 hours? I'm sorry, that's not a guy willing to spend political capital.

NOVAK: Listen, that's turning the thing on its head, because...

O'BEIRNE: He didn't need it that badly...


O'BEIRNE: ... stimulus package that badly.

NOVAK: Here's what happened at the end. At the end of the process, the only thing that they were interested in -- and as Tom Daschle said in that soundbite -- was health care for the unemployed. That's stimulus for the economy? Give me a break! That isn't stimulus! All right, so the Republicans...

SHIELDS: If you're unemployed, that's stimulus.

NOVAK: Just a minute. It's aid, that's not stimulus. At the very end, the Republicans come up with an alternative, a tax credit, which three Democratic senators approved. That's why -- that's right. And with the Republicans, that's a majority.

O'BEIRNE: It would help more laid-off workers too than the Democratic plan.

NOVAK: Exactly. And when the Democrats and the labor unions see people operating on their own with tax credits, they say absolutely not, and that's where they killed the bill.

O'BEIRNE: Good point, bob.

HUNT: There would have been far less given to the unemployed in this bill, this Republican bill, than was given 10 years ago. That's how -- and it would have been twice as much given to corporations and upper-income taxpayers.

SHIELDS: Last word, Al Hunt. The gang of five will be back with Afghanistan and the American al Qaeda.


SHIELDS: Welcome back. President Bush marked the 100th day of the war against terrorism.


BUSH: We built a broad international coalition against terror. We broke the Taliban's grip on Afghanistan. We took the war to the al Qaeda terrorists.


SHIELDS: An FBI official in congressional testimony questioned what victory in Afghanistan means to the war on terrorism.


TIM CARUSO, FBI COUNTERTERRORISM OFFICIAL: I think to significant -- to disrupt and dismantle the organization, we need to go beyond just one leader. And although we may reduce the horrific consequences by 30 percent, we still have the 70 percent to deal with.



DONALD RUMSFELD, DEFENSE SECRETARY: I just have enormous admiration for someone who could reach that kind of mathematical precision. I am not capable of that.

It has -- I'm going to guess, one or two handfuls of people who are perfectly capable of continuing to operate that network.


SHIELDS: Meanwhile, captured al Qaeda John Walker, recruit, facing a possible U.S. death penalty, was asked about seeking martyrdom.


JOHN WALKER, TALIBAN FIGHTER: It is the goal of every Muslim. Every single one of us was 100 percent sure that we would all be martyrs.


SHIELDS: Kate O'Beirne, why are we so worried about John Walker if 70 percent of al Qaeda does survive?

O'BEIRNE: Well, Mark, I think it's fair to say the American military and intelligence services are far more concerned with tracking down al Qaeda terrorists, in particular this alarming number of them who might have been slipping out of Afghanistan. We've been told from the very beginning, Afghanistan is only phase one. They must be found wherever they are, the whole network destroyed, and there could be no safe harbor for them.

Meanwhile, the rest of us are debating the fate of John Walker. It's maddening to see his parents and his lawyer (UNINTELLIGIBLE) arguing for every single benefit of American citizenship when he might well have renounced his citizenship by taking up arms against the United States. And his father in particular acts as though his son was on a junior year abroad that hit a little snag along the way. So, as I said, it's an issue the rest of us are talking about while the military is doing what it must be doing.

SHIELDS: Margaret, not Kate on this broadcast, but a number of leading conservative commentators said this Marin County, California, these are the values, the ethos and the moral relativism that leads to a John Walker. The same people...

CARLSON: Marin County is on trial and...

O'BEIRNE: It does look familiar.

SHIELDS: And Margaret, let me just add one thing. And the same point is I have never heard a single conservative commentator say that when our good friend in Oklahoma City, when...

NOVAK: McVeigh.


HUNT: Timothy McVeigh.

SHIELDS: A combat veteran of the Gulf War who had grown up in a very tightly knit community in upstate New York, rural, was a product of conservative America. But go ahead.

CARLSON: No, I think Attorney General John Ashcroft would like to extent the death penalty to being born in Marin County. I mean, it has come up for more criticism. The other reason that we're talking about this is that John Ashcroft actually said he wanted to make John Walker an example to all those other youths that might want to join the Taliban. How big is that group? You know, how many -- I mean, is this something that's sweeping the country? Is simply isn't.

We're talking about it in the same way we talked about Gary Condit. John Walker is a side show. Now, is he going to be found guilty of treason? I doubt it, unless he's found to have been involved in the murder of the CIA Agent Michael Spann. And then he would, but I don't think we're going to find him pulling the trigger. It's going to be -- he should be punished, but this discussion is a little out of hand.

SHIELDS: Bob Novak.

NOVAK: Well, I think that there are many worse traitors that I can see in American history than John Walker. I think he's pathetic, and I have no sympathy for him, and his father is as culpable, but whether I'll relish in execution of this nerd I'm not quite sure.

What I do feel -- I feel kind of sorry for Jimmy Caruso (sic). Don't you?

SHIELDS: Tim Caruso.

NOVAK: Tim Caruso, I'm sorry.

SHIELDS: The FBI agent.

NOVAK: He's the FBI agent who was eviscerated by Don Rumsfeld for saying that...

SHIELDS: Mathematical exactitude.

CARLSON: But I do love Donald Rumsfeld. It's Christmas, can I say that?

NOVAK: Yeah, sure.

CARLSON: I love you, Donald.


NOVAK: I think the administration has the problem with this war, is what do you do next after you've won. They have done a great job in Afghanistan. There's no question. The Taliban were paper tigers, but -- and the al Qaeda, but what do you do next to -- I mean, to clean up the al Qaeda cells around the country? When the FBI guy says 70 percent of them are still going, that isn't good news for Rumsfeld.

And I can tell you something else, Kate, bombing the hell out of Baghdad is not going to do any good to get the al Qaeda that are in this 70 percent.

SHIELDS: Al, to give credit to the person who said it first that I know of, Jim Miklaszewski of NBC News said that the administration right now dreads what he calls "the Elvis scenario," and that is that Osama bin Laden has just disappeared and he's not found. I mean, does that become a political problem?

HUNT: Well, I am a tremendous Mik (ph) fan, and I like him as a reporter. I still think that we're going to find Osama bin Laden. I think it will be sooner rather than later.

John Walker, I agree with just about everything that has been said here. I think there's kind of a consensus, he's a jerk. I don't think it has anything to do with Marin County, it has to do with the fact, you know, he may have had a clinker for a father. And he obviously is a deranged kid. I hope John Ashcroft gets over this using him as an example, you know. I just don't -- it's not the story that excites me a whole lot, frankly.

NOVAK: Where did he get that accent? Isn't that interesting?

HUNT: Yeah, you're right, it is interesting. I think it was -- Bob is absolutely right. I mean, don't go one-on-one against Rummy. He made poor Tim Caruso look stupid, but I think Tim Caruso is factually correct. I think -- I don't know if it's 70, 75 or 80, but it's -- 65 -- but it's still there, the threat is still there, and it is not going to go away. And I associate myself in a rare moment with Bob Novak's comments about the threat.

SHIELDS: Let me just add one thing, and that is that Republican friend of mine from Illinois, Ken Webb (ph), said of Donald Rumsfeld, "he may not have been a superb secretary of defense, but he's a hell of a secretary of war."

HUNT: That's true.

SHIELDS: And I don't think there's any argument in that. And Margaret has just...

CARLSON: Not from me.

SHIELDS: Margaret has just tossed him a bouquet. There's no doubt about it.

That's it. Next on CAPITAL GANG: The Enron scandal.


SHIELDS: Welcome back. A Senate hearing began investigating the fall of Enron, the former energy giant.


SEN. BYRON DORGAN (D-ND), ENERGY COMMITTEE: More than $60 billion in value has been lost in just months. Some at the top of the pyramid got rich, many at the bottom lost everything. It appears to me to be a combination of incompetence, greed, speculation with investors' money and perhaps some criminal behavior.


SHIELDS: Enron Chief Executive Kenneth Lay refused to attend the hearing, but former employees and investors did testify.


JANICE FARMER, FORMER ENRON EMPLOYEE: I cannot help but feel that I and thousands of employees like me have been lied to, and we have been cheated.


SHIELDS: Margaret Carlson, why is a private business failure like Enron's the subject of government scrutiny?

CARLSON: Well, this one is particularly interesting, because the chairman of Enron is a close friend of the president's, one his major, major contributors, and he is the head of the Pioneer Fund. And also, the SEC is supposed to be seeing the things like this so that people don't lose their life savings when they invest in the stock of a company. This company looks like it was pillaged by its officers, so while the people who are looking at their 401(k)s disappear, bonuses are going out to the officers, and they got the advice to sell their stock when the employees were getting the same advice to keep buying the stock.

This is going to be one of the -- perhaps the largest bankruptcy in U.S. history, and the government wasn't protecting the people who worked there.

SHIELDS: Bob Novak, I know you're penchant against government regulation, but in this case it really does stink to high heaven.

NOVAK: Let me tell you something, I'm not going to defend Enron, I'm not going to defend its executives. But I do know this, we have a private enterprise system, and there are a lot of people, perhaps some of them sitting right at this table, who really don't like a lot of aspects of that system, which has winners and losers, it has some things that seem unfair. It's a rough and ready system and some people get hurt, but we are the wonder of the world while a lot of the other countries that have all this government protection are stagnating.

One other point. Senator Dorgan often sits right at this table, who is a senior member of the Senate, a member of the Democratic leadership, talks about competency. For the somebody in the Senate to talk about competency is an outrage.


HUNT: There are legitimate issues here. The two executives there, Jeff Skilling, who used to be the president, gave an interview to "New York Times" this morning, said: "I had no idea what was going on." He resigned three months ago. That's kind of like the piano player in the whorehouse, I don't know what goes on upstairs. This is a guy who sold over half his stock this year, walked out with over $30 million, while their people who lost their 401(k)s as well as their jobs. Kenneth Lay, who parlayed his political connection and political contribution is either a fool or a liar. I don't know which. But I think there are legitimate questions about tax laws, favoring as far as 401(k)s are concerned, there's legitimate questions about securities loss, there's legitimate questions about accountants. All those are quite legitimate, and I must say, I'd like to know why the Democrats are so timid. I wonder why Joe Lieberman hasn't stepped up to this. Why doesn't Joe Lieberman have the metal to say, wait a minute, there are a bunch of people who've lost their whole life savings because they were lied to by a company that engaged in blue smoke and mirrors. I think that's legitimate.

SHIELDS: I have to echo that. But for Henry Waxman, Byron Dorgan, who has had the courage and the guts to take on this sweetheart deal and this enormous scam that Brother Novak defends as Adam Smith -- I mean, there's been very little courage shown on the Democratic side.

NOVAK: I did not -- I did not defend it.


NOVAK: I said I wasn't defending it.

SHIELDS: You said we have to...

O'BEIRNE: Bob, let the record show, there are serious investigations under way at the Justice Department, at the Department of Labor and at the SEC. Let the record show that the very first hearing was held in the House, not in the Senate, under a Republican chairman. There is no evidence that Republicans are any less enthusiastic about looking into this than are Democrats. And I predict it's going to be a very big story next year.

On the law side, I think the Congress is going to be tempted probably respond by over-regulating, and I think there's going to be an irresistible temptation to score political points, even in the absence of any evidence that the Republicans are any less interested in getting to the bottom of it than Democrats.

SHIELDS: That this man had access to the White House, Ken Lay.

O'BEIRNE: Oh, please.

SHIELDS: That there was unparalleled -- it's unparalleled..

O'BEIRNE: Oh, Mark! And John Wayne Gacy was photographed with Rosalynn Carter. Please!


O'BEIRNE: ... money to dozens of Democrats.

HUNT: He killed regulatory appointments.

(CROSSTALK) HUNT: ... regulatory jobs.

SHIELDS: Federal Regulatory Commission nominees -- FERC -- had to be cleared by Enron people! The only energy executive who had a half-hour appointment session with Dick Cheney...

NOVAK: Let me make...


CARLSON: He was on that secret committee.

NOVAK: Let me make a small point. Somebody who lets their 401(k) be totally invested in one stock and doesn't diversify -- because anybody can diversify his own contributions -- is accused of as much greed as the corporate...


NOVAK: One stock, I don't care how good it is!

HUNT: While the top executives are selling their stock and telling you it's going up, I mean, that is called (UNINTELLIGIBLE), that is called greed.

NOVAK: You didn't listen to what I said.

HUNT: I did.

NOVAK: I said if you're one stock, you're stupid.

HUNT: Everybody doesn't have your wisdom about the stock market.

CARLSON: Those people who lost their life savings are not losers. They worked for 30 years, and they were cheated by the people they worked for.


SHIELDS: Last word, Margaret Carlson. That's it. Bob Novak, we'll be back with the second half of the CAPITAL GANG. Political humorist Mark Russell is our "Newsmaker of the Week." "Beyond the Beltway" goes to China with Ambassador James Lilley. And our "Outrages of the Week," that's all after the latest news following these messages.


SHIELDS: Welcome back to the second half of CAPITAL GANG.

I'm Mark Shields, with Al Hunt, Robert Novak, Kate O'Beirne and Margaret Carlson.

"Beyond the Beltway" looks at China. U.S. Assistant Secretary of State Avis Bohlen went to Beijing to talk about U.S. abandonment of the Anti-Ballistic Missile Treaty. The Chinese were not happy, but restrained their criticism.

At the same time, the Chinese foreign minister, on a Mideast tour, criticized Israel and questioned extending the war on terrorism. Quote: "We are against linking terrorism with a certain religion, region or nation. Solving the Mideast problems as soon as possible will help eradicate the hotbed of international terrorism," end quote.

Joining us now is James Lilley, former ambassador to China and to South Korea. He is now a senior fellow at the American Enterprise Institute.

Thank you for coming in, Jim.


SHIELDS: Ambassador, is China really part of this coalition against terrorism?

LILLEY: China wants it both ways. Yes, they are cooperating in the sense that they've closed their border to keep people from escaping into China, they're checking on money supply to the terrorists, they're exchanging intelligence, and they're voting with us in the U.N.

However, on the other hand they're making these statement such as the foreign minister made. You've got to go through the U.N., you can't have any collateral damage; Israel is at fault; you can't connect terrorism to independent weaker groups -- this sort of thing. They're playing it both ways. It's very Chinese.

SHIELDS: Bob Novak.

NOVAK: What do you make of, Jim, of the very strong position against Israel? Is this an attempt for China to make a position for itself in the Arab world? Is it an attempt to undermine the United States' position? How do you interpret that?

LILLEY: I think it's done in China's interest. They want to cultivate the Arabs. But Bob, you know perfectly well they buy a tremendous amount of arms from Israel. They're one of the biggest buyers of Israel arms. Second day (ph), they recognize Israel as a sovereign state. So the Chinese have covered it both ways. they're attacking Israel right now because that seems to put them in a good position with the Arabs. On the other hand, they keep working with Israel. Have it both ways.

NOVAK: If I can just ask one more thing: What did you make of president -- Pakistani President Musharraf's visit to China? Was that just to show that he hadn't gone over to the Americans? Was that the purpose of that?

LILLEY: I think it's probably a good move. He's going to go up there and say look, the major process we have is to knock out the Taliban and the al Qaeda. OK, we're going to do it, and the Americans are absolutely essential; I'm going to support them all the way on this. You help me as you have before. We're going to work this thing together. We defeated the Russians in the 1980s working together, let's do it again. That's his message, I believe.

SHIELDS: Margaret Carlson.

CARLSON: Ambassador Lilley, the Chinese sold arms to al Qaeda and the Taliban prior to September 11. And then senior official said that they actually sold some missiles similar to Stinger missiles to al Qaeda after September 11. How can they be part of the coalition, and be selling arms to our enemy?

LILLEY: Well, I would like to check those reports out. A lot of the munitions which Secretary Rumsfeld said they found in the caves could very well have come from our support against the Russians in the '80s. If you have hard information that they've sold missiles to al Qaeda after September 11, then I think we've got a good cause to go in there and do something about it very seriously.

But I think you've got to look into that information very, very carefully before you accept it. It just doesn't make sense.

SHIELDS: Kate O'Beirne?

O'BEIRNE: Mr. Lilley, in recent elections in Taiwan, the voters overwhelmingly backed the party that favors independence, rather than their political competitors who want to see an eventual reunification. Given this sentiment on the part of the people in this democracy, isn't it time -- or is it time for the U.S. to reconsider its own one- China policy?

LILLEY: No, I don't think so. I think the one-China policy has been in there since 1971, when Kissinger went to China. It's been reaffirmed by every president since then.

Look, if you look at this vote in Taiwan, it was a good vote for the party -- the DPP. Now, the DPP has moved a long way from declaring independence. They are not doing that anymore. They got, I think, about -- what? They got about 87 seats out of 225. The people that favored a more liberal policy towards China, the Koumintang Party and the People's First Party got 51 percent of the vote.

So the Taiwanese are taking a very balanced position on this. They want economic integration with China. It's essential in a recession that Taiwan is going through. On the other hand, they want to have the ability to keep the Chinese from using force to coerce them into something.

We should support them all the way on that. But on the other hand, we should push this tremendous economic dynamism and interdependence between China and Taiwan because both of them need it, and it should take the lead in the relationship.

SHIELDS: Al hunt.

HUNT: Mr. Ambassador, China is about to be a full-fledged member of the World Trade Organization. Do you think that is going to change their behave or either internally or diplomatically at all?

LILLEY: I think it's going to be a very great challenge for China, because it puts their whole state system under economic challenge, competition. And this is going to cause a lot of disruption internally in China, and they're going to have to focus on that.

And there are large forces in China that are resisting globalization of the Chinese economy. And they are protectionist. It's going to be a long struggle. But the important thing is that Taiwan is in there too. And Taiwan and China have this dynamic economic relationship. There are over half a million Taiwanese living in China, bringing their customs and their view of democracy into China. China will gradually evolve, I think, in this direction.

But it's not going to be easy, and it's not going to be a straight-line deal.

NOVAK: Jim, the reaction by the Chinese to the U.S. pulling out of the ABM Treaty seemed to me to be very passive. It was -- they didn't like it, but they said, We have to obey our -- fulfill our commitments. But they weren't going crazy on it. Do you agree with that analysis, or do you think it was -- that they're really upset with it?

LILLEY: Well, of course they are going to throw a tantrum on it. They want to strip ABM away. They don't want us to get a ballistic defense because it takes away their trump card, which is their own missile deployments. Along the Taiwan coast they've got about 300 short-range ballistic missiles there.

If you bring in missile defense, it truncates what they can do and limits their leverage. Of course they're going to argue against it.

But, I think since the Russians are moving in the direction of making a deal with us, they don't want to be left out in the cold. And we are willing to sit down with the Chinese and talk about their deployment of missiles -- which they don't recognize, they don't accept -- and our idea that missile defense is to defend against rogue states. And they say no, it's to defend against us. So both of us are a little disingenuous on this one.

SHIELDS: Ambassador James Lilley, we thank you for being with us.

Next on CAPITAL GANG: The one and only Mark Russell.


SHIELDS: Welcome back.

Our "Newsmaker of the Week" is political humorist Mark Russell.

Mark Russell: age 69; residence, Washington, D.C.; religion, Roman Catholic. Enlisted in the United States Marine Corps; began his act at Capitol Hill's Carroll Arms Hotel in 1961. Appeared at Washington's Shoreham Hotel for 20 years; Mark Russell comedy specials on PBS for the past 25 years.

Earlier this week our Al Hunt joined Mark Russell at the Monocle Restaurant on Capitol Hill.


HUNT: Here we are at the perfect Christmas setting: Monocle Restaurant with Mark Russell, America's foremost humorist.

MARK RUSSELL, POLITICAL HUMORIST: And you look very natural at a bar, Al, leaning over a piano like that.

HUNT: A lot of years of practice.

RUSSELL: Yes indeed.

HUNT: Mark, did anything funny happen in 2001?

RUSSELL: Well, I was on my way over here a little while ago. I cave from the Enron Christmas party, and they were putting Kool-Aid in the eggnog. It was a very serious situation over there.

And then I went about two blocks and there was a nativity scene in front of a government building. And there were some guys from the ACLU making a citizens arrest, and they were able to drag Joseph and two of the wise men bag to K-Mart. So they were around.

The things that were funny -- yes, one thing that -- the Bush jokes are gone, and I think that's just as well.

HUNT: You gave them all up?

RUSSELL: The Republican don't like it when people say, well, his presidency really began in September. But in a way it did. You know, symbolically it did. So the old images are gone -- like when he went to Europe and he said it's wonderful to be here in one of my favorite cities, Spain -- that's gone.

And one good thing we can be grateful for, that Bill Clinton did not pardon John Gotti. Another thing we can be grateful for is that Jerry Falwell did not claim to be the Messiah, and Pat Robertson did not walk on water, although there are many of us who wish that they had both tried.

And also, when the situation in Afghanistan wound down, it improved, and it was good to see the capital of Kabul liberated. And they threw -- they discard all of the draconian Taliban measures, they opened up a Hooters. Did you know that, Al?

And when those Afghan women removed their burkas, half of them were men hiding from each other.

(singing): Chicks and ducks and geese better scurry. Sheep will have some reason to worry. Taliban seduced them in a hurry in Afghanistan.


Women must remain in their places in this land of medieval spaces. Men can never see their wives' faces in Afghanistan.

You can save and save and buy a cave, the lifestyle's elementary. Would you believe last New Year's Eve they rang in the 14th century?

As we send in our special forces, here's the plan according to sources: Shoot bin Laden while he's humping his horses live on CNN as bin Laden kicks the bucket in Afghanistan.


HUNT: A bit of good news for you: Gary Condit is running for reelection.

RUSSELL: Yes, here's the thing. When this happened and all of us in this business had to change our tune -- wouldn't it be great if we could turn back the clock to last summer; back when things seemed so important to us at the time. Those were the days, right Al?

(singing): When we had stem cell research, patient's bill of rights came first, elections suddenly reversed; those were the days. Campaign reform was just a crock, budget surplus on the rocks, gee I miss that old lockbox; those were the days. And scandals seemed to never end, getting our attention then; Mr. we could use a man like Gary Condit again. Bureaucratic tedium, back before the world went numb, back when W. was dumb; those were the days.

And do you remember when an Afghan was a blanket then? They could use a leader like Mahatma Gandhi -- amen. Patriotic spirit swells, flags now worn on our lapels, even by the liberals; those were the days.

Liberals, conservatives, make no difference now, like it did back in the good old days.

That's the end of the song, folks.


HUNT: Mark, let me ask you about John Ashcroft, your attorney general. Are you giving aid and comfort to the enemy?

RUSSELL: Let me tell you about -- it influenced me to write this next song. William Safire, conservative Republican, "New York Times," and a lot of other Republicans attack Attorney General Ashcroft on these military tribunals. And three times in one column, Safire referred to the tribunals as, quote, "kangaroo courts," so here we go.

(singing): The grand inquisitor Ashcroft rose from a humble defeat. As a Senator he lost to a dead man, then he bounced right back on his feet. Now he's our attorney general, but it saddens me to report he's rounded up the usual swarthy suspects to be tried in a kangaroo court.

Tie that kangaroo down now. Tie that kangaroo down. As he hippity-hops around the Constitution, tie that kangaroo down.


HUNT: You are a member of a very elite group, one of the two famous people to come from Buffalo, New York -- you and Tim Russert.


HUNT: Buffalo Bills two and 11. Tough year for your home team.

RUSSELL: Tim could buy the Buffalo Bills with the recent contract he has with NBC. I'll tell you this about Tim Russert: You know, he's a great guy, and he never forget his Buffalo roots. He has the only house in Georgetown with a plastic pink flamingo on his front lawn.


HUNT: Any Christmas cheer message for...

RUSSELL: Well, I want you wish and you Judy a merry Christmas and a happy holiday and, everyone. And of course, a beautiful moment on Christmas morning, when Bob Novak comes down the chimney bearing capital gains tax cuts.

HUNT: Thank you Mark Russell.


SHIELDS: We have heard an American genius. Mark Russell is the CAPITAL GANG's Christmas present to everybody. He's wonderful.

Bob Novak.

NOVAK: Well, that was a good move. If I could give a capital gains tax cut to all America, that would enrich me; God bless us, every one.


O'BEIRNE: I want jewelry. Could I just have jewelry?

HUNT: I think what Mark Russell envisioned was St. Nicholas Novak coming down the chimneys of that elite few that he considers the productive elements. That really is a wonderful picture, isn't it?


O'BEIRNE: There's no class warfare in that performance.

Two of those Afghan women that Mark Russell talked about, Bob, are going to be in the post-Taliban government. Do you realize that's twice as many women as are on "NOVAK, HUNT & SHIELDS"? SHIELDS: Is that the Christmas spirit? I don't think so! Honestly.


NOVAK: The hit of the year is the kangaroo court song.


SHIELDS: Mark Russell said that he dodged the draft by joining the Marine Corps. He's a remarkable man.

This is Mark Shields saying good night for the CAPITAL GANG. If you missed any part of this program -- Bob Novak has your name -- you can catch the replay at 11:00 p.m. Eastern. Coming up next on CNN: "LIVE FROM AFGHANISTAN WITH NIC ROBERTSON."

Thank you for joining us.




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