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AMERICA'S NEW WAR: Clarke Discusses War Progress; Bearden, Webb Discuss Possibility of Catching bin Laden; Which Economic Strategy Will Survive?

Aired January 5, 2002 - 12:00   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.
(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: We will accept surrender. These people have killed a lot of people. They deserve to be out of there. They deserve to be punished. And that is what we're there to do.

(END VIDEO CLIP)

JONATHAN KARL, HOST: The Bush administration sticks to its guns. No deals, no conditions for Taliban and Al Qaeda leaders.

We'll go live to Afghanistan, and our reporters and military experts will consider what has been gained and what objectives remain.

We'll talk to Pentagon spokeswoman Victoria Clarke about how the administration tells its story, how she walks the fine line of informing a democracy and keeping life-and-death secrets.

Plus, are we safe in the sky? Lawmakers debate the success of anti-terrorism and airline safety measures and the fallout of September 11 on the economy and campaign 2022.

All just ahead on CNN's special coverage of AMERICA'S NEW WAR.

I'm Jonathan Karl in Washington. For the next two hours, we'll serve up a 360-degree look at the war in Afghanistan and its echoes on the homefront. We'll talk to two prominent pollsters about the political fallout of the war and a very, very popular president.

We're standing by for President Bush's town hall meeting expected later this hour in Ontario, California.

As we talk to our guests, we want your phone calls and e-mails. The address is security@cnn.com.

We'll talk to Pentagon spokeswoman Victoria Clarke shortly, but first, the latest developments in AMERICA'S NEW WAR.

(NEWSBREAK)

KARL: Now, keeping the public informed without compromising national security is a major challenge for a democracy during war time, and one that faces our first guest every day.

Joining us to talk about that, as well as where the military campaign stands, is Assistant Secretary of Defense for Public Affairs and the chief Pentagon spokeswoman, Victoria Clarke.

Victoria Clarke, thank you so much for joining us on a Saturday.

VICTORIA CLARKE, PENTAGON SPOKESWOMAN: Thank you very much.

KARL: And we have heard Secretary Rumsfeld talk about signs of progress in the war. What can you tell us this morning about the latest signs of progress?

CLARKE: Sure, there are several we can look to.

First and foremost, the Taliban, which is an extremely oppressive, horrible regime, is no longer in control of the government in Afghanistan. That's a very good thing.

Secondly, the Al Qaeda network, which is extremely well organized, well resourced, has been debilitated. It is not gone; we still have a lot of work to do. But it has been debilitated. It's no longer operating as freely as it once was. We have hurt their communications. We have gotten some of the more senior people. We have killed a lot of them. Those are some very good signs of progress.

There is an interim government in Afghanistan now. And the United States and the coalition partners are working with them to try to start a new foundation and infrastructure, if you will, for a government that can take care of the people of Afghanistan instead of torture and abuse in the way they have been for years.

So, those are all significant signs of progress. There is still so much work to be done.

And yesterday, the tragic loss of the special forces trooper, the Army special forces trooper, is just a sign of how dangerous and risky the operation still is.

So we have a long way to go, but if you look back at what the president and the secretary laid out as the objectives just a few months ago, we are making some significant progress.

KARL: Now, on that death of Nathan Chapman, certainly remarkable, this was the first death from hostile fire of a U.S. military personnel.

What have we learned more now about the circumstances of his death? Do we know anything more about the apparent ambush or what exactly happened in that firefight that cost him his life?

CLARKE: Well, we don't know that many more details. But what we do know is they were working -- Chapman was working with a group of others, including other U.S. officials, and trying to get some information with some tribal leaders. And we know Afghanistan, the entire country, is still a dangerous place. That particular area, that particular region we knew to be particularly difficult, particularly dangerous.

And they were leaving the meeting and the firefight erupted.

CLARKE: We don't have that many more details at this time.

But Chapman and others are doing the incredibly important work that needs to be done to raise the level of information, to get the intel, to get the relationships going with some of the people on the ground there to continue to make progress.

KARL: Do we think it's possible that he was set up by those very tribal leaders he was trying to meet with?

CLARKE: Oh, we just don't know. You just don't know. There are a lot of different people in that country. There are a lot of different people who have been on various sides of the fighting. We just don't know at this time.

KARL: OK. Well, we need to take a quick break.

We will continue our conversation with Tori Clarke about winning the war and keeping the public informed, in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CLARKE: Our primary objective is to get the Al Qaeda and the Taliban leadership. And we'll use whatever resources, in a very forward-leaning manner, whatever resources it takes to get them, including special operation forces.

(END VIDEO CLIP)

KARL: Ms. Tori Clarke, one of the faces and voices of the Bush administration's war on terrorism. And Tori Clarke joins us again right now.

What do we know? We're hearing reports now from Reuters, not confirmed yet from CNN, that the former Taliban ambassador to Pakistan has now been turned over to the United States. Do you know anything about this?

CLARKE: Well, Jonathan, we're not confirming names or titles of most of the senior people that come under U.S. control.

But over the last several weeks, we have increased the number of detainees under U.S. control. As of today, it's up to 307, I believe, as of this morning. That includes some senior Taliban and some senior Al Qaeda, and they're in a variety of places in Afghanistan, as well as on the Bataan.

But we're just not right now in the business of giving out details about names and titles.

KARL: OK. So yesterday, the number of prisoners that were in U.S. custody was 273. Now this morning, you're telling us it's up to 307.

How big a number do you think this will end up being? How many prisoners do we expect the U.S. will actually take into custody?

CLARKE: I don't think we've set an outside limit, if you will. It is not our desire to be in the business of holding a lot of detainees, being in the business of holding a lot of prisoners.

We want those people that we think have high value in terms of the intelligence, the information they might be able to provide. We want those people that we want to make absolutely sure are prosecuted to the fullest extent because of the bad things they have done.

We've not set an outside number, but the fewer number overall that we have control of, the better.

And we've been working closely with the interim government. We've been working closely with factions on the ground in Afghanistan, as well as the Pakistanis, on making sure we have the right people.

KARL: Now, how many detainees will that facility at Guantanamo Bay ultimately be able to hold?

CLARKE: Don't have a number on that, but we've got the plans under way now to make sure the facilities are appropriate.

Many of these people that we're taking control of are very, very dangerous people. They are hardened criminals. At this stage of the game in the conflict in Afghanistan, the people that we are getting are very, very tough people, very dangerous people. You see examples of it almost every day. They're very resilient, and they are very desperate. Many of them don't care about dying, and they certainly don't care about taking others with them.

So we want to make sure we have the appropriate facilities with the right kind of security.

KARL: When do you think we'll see the first detainees actually brought over to Guantanamo Bay?

CLARKE: Don't have a date certain. When the facilities are ready and the transportation is arranged, we'll start moving them in.

KARL: Perhaps the detainee that's caused the -- you know, have been the focus of the most attention is the American Taliban, John Walker.

Has the secretary of defense come any closer to a decision about whether or not he will be tried in a military tribunal or turned over to the civilian courts?

CLARKE: Well, it's actually an inter-agency process that's under way, reviewing what we do with John Walker -- more importantly, what we do with all the detainees.

The secretary and others are working hard -- as a matter of fact, the secretary continues to work on it this weekend -- about how we take these various detainees and put them in different kinds of baskets. They can be handled in a variety of ways, depending on the circumstances.

KARL: And with John Walker, I mean, what's the current thinking? I mean, what's the -- where are the discussions? Where do we stand on that?

CLARKE: Well, it's still under review right now.

KARL: It's still under review.

CLARKE: Yes.

KARL: Now, one of the things we're also trying to do with these detainees is to bring them to justice is also the question of getting information out of them.

Have we found any particularly cooperative detainees, former Al Qaeda or senior Taliban people, that are actually giving over useful information? Or are most of them in that category you described -- dangerous and desperate?

CLARKE: Oh, I think you probably have as many different attitudes as you do people. Some are easier than others.

KARL: So we've heard Pentagon officials talk about some of the incredible intelligence they've been able to get out of the caves, out of the various places the Taliban an Al Qaeda fled.

Has any of this gotten us any closer to that objective? We heard you talk about it at the top of this block, that objective of actually getting the senior Al Qaeda and Taliban members to justice, capturing them.

KARL: Are we any closer?

CLARKE: Well, the information has been helpful in a variety of ways, some more helpful than others. But it helps us track down others; it helps give more information about the Al Qaeda network, how it's organized, how it's structured, how it's been resourced. It helps in a variety of ways.

A lot of the information, obviously, is very sensitive. It might talk about -- it might have an impact on future operations, so we tend not to release that kind of information. But it has been helpful in a variety of ways.

KARL: So where is the most useful information coming from? Is it coming from information called from these detainees, or is it coming from computer discs seized? I mean, where are we getting our best intelligence? CLARKE: Oh, I don't think you can characterize one particular source. It comes from a variety of places and people and equipment and documents and computer disks that are found as you go through the compounds, as you go through the cave and tunnel complexes, as you go through the facilities, as you interrogate people, as you work with people in Afghanistan who may have been with the Taliban before and have in recent weeks defected. So it comes from a variety of sources.

But if you go back to one of the things the secretary talked about in September and October, making progress depends on so many different factors. It depends on working with our coalition partners, working with countries in the region and around the world to help surface intelligence and find ways to make it less easy for the Al Qaeda to operate, if you will. It comes from working with the interim government. It comes from a variety of sources, and it's a multifaceted effort.

KARL: Now, one of the things that you're asked about repeatedly when you're standing at the podium right over shoulder is about reports of civilian casualties. Let's take a listen to what Secretary Rumsfeld had to say about civilian casualties this week.

(BEGIN VIDEO CLIP)

RUMSFELD: If one took all of the allegations that have been made about civilian casualties and analyzed each one down to the last nit, you would find that there have been conscious, repeated lies on this subject since the beginning of the campaign. We know that of certain knowledge. We also know that there have been civilian casualties, and we regret that.

(END VIDEO CLIP)

KARL: So do these reports of civilian casualties, the false ones as well as the ones that are actually true, are they tying the hands of the Pentagon? Are they making your job more difficult?

CLARKE: Absolutely not. Dealing with those issues is one of things we do. And the more people became aware of the Taliban and the Al Qaeda, you know, people who regularly routinely, systematically torture, abuse people, regularly routinely lie as part of their way of life, you know, as a pillar of credibility it's just ludicrous.

What's extraordinary when you want to talk about civilian casualties, we go to extraordinary lengths to avoid civilian casualties. There is planning, there are back-up plans, there are double checks and triple checks. There is remarkable accuracy of our strikes, of our bombing campaigns, mostly intended -- almost all intended to avoid civilian casualties.

Counter that with Osama bin Laden and the Al Qaeda, who, by their own admission, took months and months and probably more than that, perhaps years, of planning and resources and funding to attack and massacre thousands of innocent civilians on September 11 -- innocent civilians, men, women, young people, from around the world, over 80 different countries. So, you know, anytime somebody wants to talk about civilian casualties, we'll say we go to extraordinary lengths to avoid them. It is a tragedy when there's a civilian casualty. It is an absolute tragedy.

And we have stood at this podium and talked about civilian casualties when they occur and we have solid information about them.

But every civilian casualty, ever person who dies in that country, civilian or military, is the result of Al Qaeda and Taliban.

KARL: Now, Pentagon officials have confirmed to CNN the reports of Navy patrol aircraft doing surveillance missions over Yemen and Somalia. Is this a sign of where we are potentially headed next once the U.S. gets through with the Afghan phase of the conflict?

CLARKE: Well, what we do next and where we go next in the war on terrorism -- and it certainly is about much more than Afghanistan -- are decisions to be made by the president.

But it is entirely appropriate and logical that we would increase our intelligence-gathering operations and our surveillance around the world to prevent future attacks.

Well before September 11, the president, Secretary Rumsfeld and others in this administration talked about the need to improve and elevate our intelligence-gathering capabilities for just that reason. So we're improving and elevating those capabilities and those activities around the world.

KARL: Well, Tori Clarke, I'm sure we'll be talking to you again. I hope you will come and join us again on a Saturday.

CLARKE: Be happy to.

KARL: We'll definitely be watching your briefings. Thank you.

CLARKE: Thank you.

KARL: Military and intelligence experts offer insight into the continuing search for Osama bin Laden and the obstacles still facing U.S. forces in Afghanistan, up next.

(COMMERCIAL BREAK)

KARL: OK, I believe we have some live pictures of a town hall meeting in Ontario, California, where we expect the president shortly to have a town hall meeting talking about his economic plan. Do we have those pictures? There it is.

The president is expected later this hour. He will be talking about his plan now for "economic security," the new White House term for the economic stimulus plan the president has been pursuing. We will be going to that live when it comes later this hour.

Joining us now, however, two men with experience on the field of battle, men with lengthy public service and the ability to transform the truth of that experience into compelling fiction.

Former Navy Secretary and combat Marine veteran James Webb is also the author of the book "Lost Soldiers." And former CIA officer Milt Bearden; he worked with the Afghan mujahedeen in their fight against Soviet occupation in the late 1980s. He is author of the book "Black Tulip," a spy novel set in Afghanistan. It is now, by the way, out in paperback.

Now, Milt Bearden, you've spent a lot of time in Afghanistan. You've been in those caves. You've been there with the Afghan resistance fighters.

Knowing what you know about the terrain, is it possible that Osama bin Laden and other senior members of Al Qaeda can remain on the run indefinitely?

MILT BEARDEN, FORMER CIA AGENT: Not indefinitely, but they can remain on the run for a long time. This is as tough a neighborhood as you can get into, this area around Khowst where Sargent Chapman was killed yesterday.

We're talking about an area that has switchback, tortured valleys and up and down the mountains, and any number of tribal groups and clans and Hatfields and McCoys. You could see that there could be a job ahead of the people that are hunting down bin Laden and whoever else they're chasing over there.

KARL: And in fact, James Webb, we've seen in Afghanistan it is relatively easy to capture the cities. The Soviets did it in a couple of weeks, captured the major cities in Afghanistan, when they invaded in '79. But you get out into the countryside, it's dangerous terrain and always has been dangerous terrain.

JAMES WEBB, FORMER NAVY SECRETARY: Well, you have two different components in terms of the American involvement right now. The first was the advisory component, which we were very fortunate to have on the ground, people who understood the terrain and the culture and were armed and ready to go on the move, the Afghans themselves.

Now, once the Marines went in, and the 101st Airborne behind them, you are probably going into a second phase, which is a little similar to the way we operated inside Vietnam, where they're going to have to set up these patrol bases, go out and go after specific targets. It's very intricate and very difficult.

KARL: And we heard Donald Rumsfeld talk about how -- trying to find one single human being anywhere is an incredible challenge. I mean, look at various FBI manhunts for the Unabomber or for Eric Rudolph. I mean, what...

WEBB: I think we have a tendency in this country to get wrapped in personalities rather than in issues. And in this case, we should remember that what we are there for is to eliminate international terrorism. And there is an emotional reward in capturing someone like Osama bin Laden. But the most important thing is to be eliminating the capabilities of the international terrorist movement, wherever it is.

So maybe we will find him, maybe we won't. But as far as I'm concerned, if we're knocking out the Al Qaeda, wherever they are, then we are preserving the security of the country.

KARL: One of the things we've been doing on this show is going out on the streets, talking to viewers over the course of the week, asking them what their questions are. Not surprising, this week, we found intense interest in the whereabouts, that personality, Osama bin Laden.

WEBB: Sure.

KARL: Here's our -- here's one question. I would like you to respond to this.

WEBB: OK.

(BEGIN VIDEO CLIP)

QUESTION: We were wondering if it's really necessary to keep the military in Afghanistan all the way until bin Laden is captured, or if just we could pull them out and have CIA operatives get bin Laden?

(END VIDEO CLIP)

KARL: Well, Milt Bearden, I guess that's a good question for you. You have been a CIA operative, operating in Afghanistan.

BEARDEN: I think they've changed the rules. I think that they're doing the right thing in marrying up these CIA Special Ops with special forces in the Marines, and going in with the small groups.

And I agree entirely with Jim, let's back off of the over- personalization of this issue. Some very important things are being accomplished in Afghanistan right now. The over-used term, "drain the swamp," that is happening.

There is not going to be the likelihood of much being launched from Afghanistan any time in the future.

KARL: Much terrorism being...

BEARDEN: Much terrorism launched from Afghanistan.

So I think that it's so far so good. And if we get bin Laden, fine. If we don't get him right away, keep at it and stay steady as she goes.

WEBB: But in terms of the use of the military, I think there is a very important point to be made here.

That is that we have 1.4 million people on active duty, that's all. It's a very small military considering the global obligations that we have even aside from combating terrorism. And it's important to keep this rolling.

I think that once the cancer is cut out, we shouldn't be the people who were there taking care of the patient. It's very good to have the international community come in and do those sorts of things and let our military go on to the next objective.

KARL: OK. Well, I've just heard, by the way, that CNN has confirmed that the U.S. now has in its custody the former Taliban ambassador to Pakistan. He's now in U.S. custody in Afghanistan.

The question that raises, what do we do? I mean, we're not going to be part of this cleanup operation, perhaps, but what's to be done with all these prisoners? We heard Tori Clarke now say the number is 307 Al Qaeda and Taliban prisoners in the U.S. custody.

BEARDEN: We're going to have to be careful. I think that the...

KARL: Maybe it's 308 now.

(LAUGHTER)

BEARDEN: But the instincts of our new Afghan friends are going to be, well, let's take all these dregs and hand them over to Donald Rumsfeld and let them take them Cuba to Guantanamo Bay.

You know, we've experienced in the past certain countries emptying their prisons of their bad boys and more or less dropping them in our laps. And I think we got to watch that.

I don't know what you do with former ambassador to Pakistan. I mean, maybe he wants to get an RV or a nice house in Phoenix or something like that.

But the issue is that we're going to have to watch this tricky game as it's being played out, as far as...

WEBB: That's a very important distinction that needs to be made that's from the outside, as we watch this, between the Al Qaeda and the Afghani political personalities. I'm not sure we're are paying enough attention to that distinction.

KARL: Well, how long -- you talk about not being too much in the cleanup operation, but how long will U.S. forces need to remain in Afghanistan? The 101st Airborne takes...

(CROSSTALK)

KARL: Yes. And it takes them a long time to actually get there, too, right? I mean -- and how long do you think they're going to be there?

WEBB: Well, it depends on how many people they put in. For instance, the Marine Corps put in, what they call, a (UNINTELLIGIBLE) which was a reinforced battalion with aviation capabilities and this sort of thing. But the important distinction -- I think General Franks was very good on this yesterday -- that we've been given a mission of cleaning out Al Qaeda and apprehending a certain number of people from the Afghanistan former Taliban government. And beyond that, we need to getting going.

There's a tendency in the United States right now, at least among the political commentators, from what I've seen, to want to fix the entire problem of Afghanistan. We're not going to be able to do that. I don't think anybody is going to be able to do that. And we need to keep the focus on the international terrorism.

KARL: A couple centuries of experience that show us that's a pretty hard thing to do.

We need to take a quick break. James Webb, Milt Bearden, stay with us.

Our guests will take your phone calls and e-mails when AMERICA'S NEW WAR continues.

(COMMERCIAL BREAK)

KARL: An important source of information about the news of the day, the war in Afghanistan and the terrorism investigation can be found online at cnn.com or AOL keyword CNN.

We're talking about the war in Afghanistan and the search for Osama bin Laden with two authors who have used their experience in Vietnam and in Afghanistan as the raw material for novels: former Navy secretary James Webb and former CIA officer Milt Bearden.

I want to talk a little bit about that, about the process of turning your experience into fiction. In times like this, when the truth really does seem stranger than fiction, is your job easier or more difficult?

James Webb?

WEBB: Well, for me, I've written every different way you can write, including films. I had a film last year called "Rules of Engagement," which -- actually, the opening scene was set in Yemen with an incident involving the Marines.

But I like fiction because you can basically universalize an issue rather than stringing it out in non-fiction, having to find, having to follow this trial all over the place.

I like fiction for the characters, and the action can be non- fiction. Not that hard.

BEARDEN: Pretty much the same thing from my point of view, is that fictionalizing something you have gone through, you can sail through those parts that might takes you weeks of research. You can just -- you can go in and say, this is the way it would have happened, get on with it. You can make your characters perhaps a little richer. And then there are parts, particularly, in the military or the intelligence side that are exactly the way it was or would be. And it's a fine combination.

KARL: But in terms of your audience, I mean, you have readers who are reading the newspapers every day. And usually you go to fiction because you get something you don't get in non-fiction. But they're getting this in the newspapers every day.

WEBB: I had a book called "Something to Die For," which came out right before the Gulf War. And I had picked a scenario which was rather similar and finished the book a year before the war started. And that can be kind of frustrating because it's like a CNN, book, book, CNN.

KARL: Yes, right.

WEBB: But in general, in fiction, you search for universal themes that go beyond simply the action that's on the page. So fiction can sustain itself.

KARL: Now, you, again, wrote a very successful movie. And we also know that the White House has actually brought in Hollywood types to kind of try to help out, you know, think about what, for instance, what terrorists could potentially be planning next.

(LAUGHTER)

You go to the people that write this stuff for the movies. I mean, is that a silly process, or can you actually get something out of it?

WEBB: I don't know if terrorists read fiction and watch movies to figure out what to do next too. That's a great danger. I mean, I know, Milt probably feels the same way, having been in government, there are so many things that I can't write about and I wouldn't write about, because I wouldn't want to be irresponsible.

So I am glad that there is a Hollywood-government connection in this administration; there needs to be one. But I'm not sure that it's advancing anything.

BEARDEN: Well, 9-11 was described by some as a failure of imagination anyway, so anything one can do to just get the imagination going a little bit without overreacting or cutting down the way we have to live is OK.

KARL: All right, let's back to non-fiction, to the truth of what's going on. Another one of those questions from one of our viewers, this one about the future of Afghanistan.

(BEGIN VIDEO CLIP)

QUESTION: Given that the country of Afghanistan doesn't have much of an infrastructure and that most of the young men in the country are trained as warriors and not in skilled labor, how does the political and economic future look for the country of Afghanistan?

(END VIDEO CLIP)

KARL: OK, Milt Bearden, you've worked with the warlords.

BEARDEN: You have got a country that has been at war through -- into the third generation. Afghans themselves don't do adolescence in the sense that we have it. So just about everybody running around, every male over 13 is carrying a Kalashnikov now. And this is all they know. This has defined them as one, two, two-and-a-half generations.

We walked away as a nation in 1989 after the Afghan scene set in motion the collapse of the Soviet Union. We have to lead on that. I am with Jim on this. We don't need to have the 101st, the 82nd and the 10th Mountain Division in there forever, but we can't walk away again. And the president has said as much.

Can you get there from here with Afghanistan? We better try.

KARL: Well, in terms of what comes next, beyond Afghanistan, James Webb, when you left as secretary of the Navy, you expressed concerns about the readiness, the size of our Naval force, the size of our military. Are we prepared now for the next steps? Is our military prepared?

WEBB: Well, I think that, first of all, it depends on how carefully we use our military. You can have a tremendous capability that can be diminished by keeping it in the field too long.

But if we choose our next engagements carefully, and if we are very careful about putting in large numbers of ground forces, which would bog us down, certainly we can fight the international terrorist movement.

WEBB: The concern that I have right now, in terms of how this thing is playing it out -- or two. First, on the military side, the size of the force structure. We've had four aircraft carrier battle groups at one time around this region, and we've really dramatically cut back the Navy in the last 10 years.

The other is watching China and Iran. We have this focus now, this fascination with what to do about Iraq. It's justified in the sense of the leadership of Iraq, but Iran was the number-one state sponsor of terrorism in the world according to our own State Department last year. Iran is the country that was shipping these weapons to the Palestinians that were intercepted yesterday.

And China has been very careful in terms of how it has been playing this issue. China has been the principal sponsor of Pakistan. They enabled Pakistan to have a nuclear capability. And China is moving throughout the region. Watch Myanmar -- the Chinese president just visited Myanmar. They've been looking for a port on the Indian Ocean for a long time, and they've put a lot of money into that port.

Those are the kinds of things we have to watch even as we're pursuing the war against international terrorism.

KARL: And very quickly, we know about the reconnaissance flights, the Navy flights, going over Yemen and Somalia. Should we be reading anything into this as possible future...

WEBB: I think the Yemenis and the Somalians (sic), particularly those who have been supporting terrorism, ought to think hard about it.

(LAUGHTER)

KARL: Well, unfortunately a lot more to talk about. We do have to go.

Milt Bearden, James Webb, thank you very much for joining us. We hope to have you back.

BEARDEN: Thank you.

KARL: Thanks.

And just ahead, we'll return to wartime politics. Can Democratic Leader Tom Daschle and his party win over public support from a popular commander in chief? We'll get insight from Republican pollster Frank Luntz and Michael Meehan of the Democratic National Committee, when AMERICA'S NEW WAR continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DASCHLE: When it comes to our second battle, our economic battle, I think most Americans would probably agree that the news hasn't been so good lately. But there's no reason we can't win both of our battles.

(END VIDEO CLIP)

KARL: That was Senate Democratic Leader Tom Daschle firing the first political salvo of 2002 and blasting the Bush administration's tax cut, not just for failing to prevent a recession, but probably for making it worse.

Joining us with an outlook on the political year ahead is Republican pollster Frank Luntz and Michael Meehan, director of message development and polling for the Democratic National Committee.

Frank, you're a pollster. You do focus groups. This makes sense, doesn't it? You have a popular president, in terms of the war. But he's vulnerable on the economy. Isn't Daschle doing just what he needs to do?

FRANK LUNTZ, REPUBLICAN POLLSTER: I don't know. I don't think Americans want to see partisanship. On new year's eve, I was at the Marriott marquee, looking out over Times Square. I saw 500,000 people. Not one of them was thinking about Republicans or Democrats. They were thinking about unity, they were thinking about the future of the country, about their own lives. We don't need to be fighting Republican-Democrat. We should be cooperating to get an economic security package passed.

KARL: Well, we all like to talk about bipartisanship, but that was a pretty straight political hit at Bush, even if it was directed at his tax cut, not him personally.

One thing that was interesting, though, Michael Meehan, is that Daschle did not call for the repeal of the tax cut. If it's so bad, why not repeal it?

MICHAEL MEEHAN, DEMOCRATIC NATIONAL COMMITTEE: Well, I think Senator Daschle yesterday laid out a seven-point plan for Democrats that we believe that will help get us back on the sound, fiscal economic footing that we had.

And yesterday, he called for an agreement that, if you're in a hole, stop digging. And what the plan says is, when you've had deficits and when you're pushing for tax cuts that we can't afford right now, that we should just all agree we should stop, get together and figure out what we can do...

KARL: Well, does "stop digging" mean stop the tax cuts that are to come? Do we...

MEEHAN: Sure. There was $100 billion in "economic stimulus," quote, unquote, tax cuts that the Republicans tried to push before the new year here that Senate Democrats and congressional Democrats said we can't afford to do that right now. We can't give tax cuts to well- off companies, while others are suffering. So...

KARL: Frank?

LUNTZ: I think you're going to have a problem trying to take taxes -- trying to tell the American people that they've got to pay more when they are struggling.

We've got more Americans right now not only that are unemployed, but are afraid of losing their jobs. And that's the key. They're at the bubble, that 15 percent of Americans that think that this next year could be a disaster for them. They're the ones that desperately want to put money in their pockets, so they could save, just in case things get worse.

KARL: OK.

MEEHAN: Well, I think Americans are looking for long-term solutions that don't shortchange our long-term future. And Democrats have a principal belief that we're not going to do that.

Congressional Democrats are not going to allow us to spend more money than we have right now, when we have new types of needs that this country faces -- our new security needs, that the Republicans will come with a new budget within a month that'll talk about these new needs about how the government will address this. And why spend more money now before we know what those new needs are going to be?

LUNTZ: Republicans would not argue with that.

But the one thing that they would say is, why is it that when there is an opportunity to help people who need it, Tom Daschle says no? When there's an opportunity to become more energy self- sufficient, Tom Daschle says no? When there's an opportunity to expand international trade, Tom Daschle says no? Why?

KARL: All right, now, Frank, before we get into the fight about Tom Daschle, we do need to take a quick break.

And as you know, we are waiting for the president to come out in his town hall meeting in Ontario, California. First a quick break. We'll be right back.

(COMMERCIAL BREAK)

KARL: ... will bring you that when it comes. We are also awaiting a press conference from the hone base of Nathan Ross, the special operations soldier that was killed in Afghanistan on Friday, that coming from Fort Lewis in Washington.

But right now we're talking about America's new war and the impact on politics in 2002 with Republican pollster Frank Luntz and Michael Meehan, director of message development and polling at the Democratic National Committee.

Michael Meehan, you just heard from Frank Luntz than Tom Daschle has blocked the Republicans on an economic stimulus plan, blocked them on the energy security plan.

MEEHAN: You know, as regards to both, Senator Daschle yesterday put forward a proposal, a new business tax cut that would help companies immediately get tax relief if they invest in the next six months, 12 months.

You saw today that the Congressional Budget Office said that President Bush's stimulus package would do nothing in the short term.

Democrats and Republicans came together two months ago and said, "We will go for a stimulus package if it is timely, if it is targeted and if it happens right now." That's -- the Republican plan clearly didn't meet that test, the CBO said that today.

Tom Daschle and the Senate Democrats and congressional Democrats will sit down with Republicans as soon as we get back in two weeks to do something for the unemployment benefits and health care benefits. But what we won't stand for is just padding the bottom line of corporations that are already doing well. They're sitting on a bunch of cash and laying people off.

KARL: Frank?

LUNTZ: Well, you know, it's funny because I've done the focus groups and I've heard the same language. You don't have your talking points. You must have left them back in the green room.

The fact is, it's these corporations that employ these people. And what you're saying to the American people is to -- American Express and to the corporations in New York and California and all across the country, your employees don't matter.

If corporate America does well, if their profits get back into shape -- the airline industry, the hotel industry, the car rental industry -- if they come back, there's no reason to lay off people. But if you are going to be so anti-corporate, in reality you're being anti-employee. And that's the problem.

We need to work together. We need to sit down, allow this legislation to go to the floor, and focus on what's good for people, not what's good for politics.

MEEHAN: Well, we put the legislation on the floor...

(CROSSTALK)

MEEHAN: ... the Republicans blocked it.

I mean, the problem here is yesterday before Senator Daschle finished his speech, Senator Lott took a page out of your memo and called Senate and started calling Tom Daschle economic dummies. And out of the government office, they started name calling.

LUNTZ: That's not my...

(CROSSTALK)

MEEHAN: ... their members on the Hill.

LUNTZ: That's not...

MEEHAN: We don't need name calling. We need to sit down and work together -- members of Congress, Senators. Out of their officials offices, attacking Senator Daschle and belittling him because he put a proposal on the table?

I mean, we agree there is not time for name calling now. It's time to sit down and get together. But right out of your memo, right out of your strategy, Karen Hughes comes fresh out Crawford yesterday and hitting Senator Daschle for not putting a plan forward. He put a plan forward yesterday, a seven-point plan. The ink wasn't even dry on the proposal before it was dismissed.

LUNTZ: Well, look, I think that we would agree that the country has an economic -- is concerned economically. There is some fear. There is some concern out there for the future.

But we can't address these specific issues unless action is actually taken. And this is not about seven-point plans. This is about actual votes, actual legislation that will actually help people.

I will give you another example. The energy policy -- will Senator Daschle allow an energy policy to come forward so we can actually become more self sufficient so we're not buying oil from Saddam Hussein? We're buying oil from...

KARL: Let's not forget, this is all happening in the context of -- you know, we have congressional elections. House and Senate both completely up for grabs this year, anybody would tell you that. And we have this relaxed, confident, popular president that is the symbol, the leader of the Republican Party.

Listen to him yesterday as they unveiled his portrait down in Austin, Texas.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's my honor to be hanging with these men. It's also amazing to think it will be here for a long, long time. I just hope Governor Richards doesn't mind being my neighbor for eternity.

(LAUGHTER)

(END VIDEO CLIP)

KARL: I spent a lot of time on the road with George W. Bush candidate, George W. Bush, during 2000. I have never seen him as relaxed and as confident as he has been, you know, really since September 11.

It's going to be tough to go up against this guy this year, isn't it?

MEEHAN: Well, I think President Bush and his national security team have done an outstanding job. And every Democrat has been completely supportive of his effort in prosecuting this war, without question.

But what we found in 2000 and 2001 in the elections is that whether the president is at 50 popularity or 90 percent popularity, it doesn't translate into how people vote in their state and local elections.

Democrats nearly ran the table in 2001. We knocked off Republicans. We picked back up seats in New Jersey and in Virginia. State legislatures, we have more legislatures than we have had control of since '96.

In New York City, we had a guy who was a Democrat two years ago, he spent $70 million. If you have 50 more of those, I'm sure you are going to be very low on Senate races this year. But I don't think that's very likely.

But it's clear that people, and particularly post-September 11, are going to take a much harder look at the candidates as an individual. There is more at stake now.

MEEHAN: There's more trust in leaders. There's more trust in the parties. The parties are at parity, and they'll look at individuals much more closely than...

KARL: Well, Frank, what's going to be the big issue in November of 2002? Is it going to be the war on terrorism, or is it going to be the economy?

LUNTZ: It depends on what happens. Will we be at war with Iraq? We don't know that at this point. Will we be engaging in other terrorist acts? We don't know what's going to happen there. We do know that the economy will be an issue and also the personality and the leadership of the individual candidates.

I agree, with you. I think that this will probably be an incumbent year. I think that Americans feel better about their elected officials. They feel better about the country. They're proud. They're flying the flag. They're singing "God Bless America." And that's good for an incumbent election.

KARL: But if you look at the incumbents that are vulnerable this year on the Democratic side, the races to watch in the Senate, these are Democrats who voted for that tax cut that Tom Daschle just spent his big speech yesterday lambasting as making the recession worse.

How do you handle that balancing act? Tim Johnson in Daschle's own state of South Dakota...

LUNTZ: Sure.

KARL: ... you know, Mary Landrieu, Jean Carnahan, these people are vulnerable Democrats up for election who voted for that tax cut.

MEEHAN: Well, they took a hard look and, you know, were promised by the White House Republicans that the surplus was big enough, that we weren't going to do any more spending, we had enough money for a rainy day and a tax cut would help keep us out of recession.

Well, here we sit, nine months later, and we now have at least one of those Senate Democrats thinking about slowing down the acceleration of the tax cut in the future years.

So I think that it will be something that will be on the table. We're going to wait and see when the president gives his speech to the state of the union on the 29th. They'll present a budget, and then -- and we'll look to see what the new needs are of this government post- September 11. This will be the first chance to reboot the whole system.

LUNTZ: I find this interesting that, according to your own CNN poll -- I think it's by a 2-1 ratio -- Americans actually blame the previous administration for the current economic conditions, rather than the current president. So you've got a long way to go to convince the American people.

KARL: Well, Frank, will that hold? I mean, have you ever seen a situation where the president did not take the heat for an economic recession? LUNTZ: Well, we've never had a situation like this one. We've never had September 11. And trying to demonize the Republican Party or trying, as the leader of the congressional Democrats did, to refer to this as the "Bush recession," not even you Senate Democrats have supported that. It's just, it's a bridge too far.

KARL: We have less than a minute. I want to get in something else. I've heard people say that Daschle sounded a lot like a presidential candidate yesterday. Is he going run for president?

MEEHAN: I think will decide at the end of this year. He's got 15 senators in the United States Senate. He wants to expand that majority and that's his major focus this year, and he said he'll decide after this election what his plans are for 2003.

KARL: Frank, how formidable of a candidate will Tom Daschle be?

LUNTZ: He's running, and he will be extremely formidable. He's very laid back. He's very relaxed. I saw him at the VH1 concert. This guy went Hollywood with the black turtleneck. He looked cool. And everyone, even the Police, were applauding him, and you know that they don't applaud many people.

KARL: All right. Well, Frank Luntz says Tom Daschle looked cool and will be an incredibly formidable presidential candidate. We'll hold you to that.

Michael Meehan, Frank Luntz, thank you very much for joining us. We'll be talking to you again.

And we'll return shortly. And we also expect very shortly the president's town hall meeting from Ontario, California.

(COMMERCIAL BREAK)

KARL: And there you have live pictures from Ontario, California, with the president at his town hall meeting, which he will be using to talk up his economic plan.

Here he is, the president.

(INTERRUPTED FOR CNN COVERAGE OF A LIVE EVENT)

KARL: OK. We are going to move now from the president's town hall meeting in California to a press conference at Fort Lewis in Washington, where the -- which was the home base for Sergeant First Class Nathan Ross Chapman, the Green Beret that was killed on Friday in Afghanistan.

(INTERRUPTED FOR CNN COVERAGE OF A LIVE EVENT)

KARL: OK. That's Fort Lewis in Washington, where fellow Green Berets are talking about the death of Sergeant First Class Nathan Ross Chapman, the first American soldier to be killed by hostile fire in Afghanistan.

Now we're going to go back to California, the press conference -- the town hall meeting with the president.

(INTERRUPTED FOR CNN COVERAGE OF A LIVE EVENT)

KARL: And there you have President Bush wrapping up a town hall meeting in Ontario, California, a lengthy town hall meeting, billed as one of where he will talk about his economic plan -- economic security plan, he's calling it now. Also talking about a wide range of other topics related to the war in Afghanistan.

Now we have joining us here in the studio two political strategists, economists, to talk about the president and the political scene: Kiki Moore McLean, former adviser to former Vice President Al Gore, and we have Stephen Moore, economist with the CATO Institute.

Thank you for joining us.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: Pleasure.

KARL: So, Steve, I want to get right to you.

KARL: You heard Tom Daschle really fire the opening salvo of this year's campaign at the president, saying that his tax cut not only didn't prevent the recession, but made it worse. What do you think?

MOORE: You're really seeing, both with what Daschle said yesterday and what President Bush said today, a real defining difference, I think, right now between the two parties.

The Democrats yesterday, through Daschle, basically said, we think the way to get out of this recession is to stop tax cuts and actually to do more government spending. And Bush today basically said, look, the way to get the economy going is to go full throttle ahead with tax cuts. And obviously, I think that's the right way to go.

KARL: And the president's got the stage here, Kiki, you know...

KIKI MOORE MCLEAN, DEMOCRATIC STRATEGIST: Well, what he did on stage today was say, oh, but I want to spend money on more Pell Grants for education. That's great.

MOORE: I didn't like that too much.

MCLEAN: But with his tax cuts, what he's done is he's made sure that 70 percent on the House version of tax cuts go to the wealthiest 1 percent of Americans. Jonathan, that's Americans who make over 380,000 a year. And only 2 percent goes to anyone who makes under $75,000 a year.

The small-business entrepreneurs, last time I checked, they weren't taking home nearly half a million dollars. They were people who earned $20,000, $25,000, $40,000 a year.

KARL: OK. But if his tax cut is so bad and Daschle spent so much with this... MCLEAN: Well, the tax cut is bad because now George Bush also wants to make investments in homeland defense and security and it doesn't exist.

MOORE: But, you know, every vulnerable Democrat voted for that bill.

MCLEAN: And the reality is, when you look at a town hall meeting today, George W. Bush went on stage for almost an hour and a half. He answered maybe -- I didn't get the hard count -- probably about six questions, gave a huge, long, rambling speech. I think we're in a position of "Thou dost protest too much."

MOORE: But, you know, Jon, I think that...

MCLEAN: ... because I think that the speech yesterday by Senator Daschle got to him.

MOORE: And the reason I think Bush has the upper hand in this fight is I think he's got both economics and politics on his side.

Economically, I think most Americans do agree that the way to, you know, get the economy moving is through tax cuts...

MCLEAN: To rich people?

MOORE: ... not more government spending. In fact, if you look -- I mean, basically, Daschle's proposal was essentially what Japan has tried for the last 10 years -- more and more government spending.

But more than that, he has politics on his side. You know, the latest poll showed, by about a two-to-one margin, Americans do think that tax cuts are a better way to get the economy...

(CROSSTALK)

MCLEAN: The politics on his side, or the politics -- he needs to look no further than down the dinner table at his father to find out what those numbers mean in reality.

MOORE: Well, but he raised taxes, and Bush is talking about cutting them.

MCLEAN: Well, when it comes to making sure that the economy is growing and you're giving it a chance, you can't defend tax cuts that, in fact, give nearly $8 billion back to the 16 biggest corporations in America. That's not a tax cut that puts money into the hands of working Americans and young entrepreneurs.

MOORE: Except you can't have jobs -- I mean, this is one of the real problems with the Democrat strategy. You cannot have jobs -- you can't have jobs without employers. It's that simple.

MCLEAN: It's a real...

MOORE: And the Democrats have been bashing big business... MCLEAN: Stephen.

MOORE: ... bashing business, saying no tax for business. How are they going to be able to hire more workers if they don't have profits?

MCLEAN: It's a real problem when Bill Clinton and Al Gore were able to stand up several years ago and say, we now have a balanced budget, we have a surplus; we have the policy in hand now to make sure we live this way as America. And this year George W. Bush's own budget officer had to step out and say we may never see a balance again until 2005.

KARL: We leave a few seconds left.

Is Al Gore going to run for president?

MCLEAN: Al Gore is busy with a lot of things in his life, and it's a decision he hasn't made.

MOORE: Well, not with the beard, he can't run for president.

(LAUGHTER)

KARL: We'll look to see if he shaves.

Thank you very much for joining us.

MOORE: Thank you.

KARL: I'm sorry we had to cut it short. The president's town hall meeting went long.

MCLEAN: Thanks, Jonathan.

KARL: Thank you very much.

I'm Jonathan Karl in Washington.

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