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Democrats Criticize Bush; Interview With Richard Daley; Can Richard Riordan Win Republican Gubernatorial Primary in California?

Aired March 2, 2002 - 19:00   ET


ANNOUNCER: Live from Washington, THE CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak, and Kate O'Beirne.

Our guest is Democratic Senator John Breaux of Louisiana, chairman of the Senate Social Security Subcommittee.

Good to have you hear, John.

SEN. JOHN BREAUX (D), LOUISIANA: Glad to be back.

SHIELDS: Thank you.

Senator Robert Byrd of West Virginia, the Senate's senior Democrat and president pro tem, asked where the war against terrorism is going.


SEN. ROBERT BYRD (D), WEST VIRGINIA: If we expect to kill every terrorist in the world, that's going to keep us going beyond doomsday. How long can we afford this?


SHIELDS: Does the majority leader agree with that?


SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Absolutely. I have said all along, we need to ask the tough questions. The continued success, I think, is still somewhat in doubt.

SEN. TRENT LOTT (R-MS), MINORITY LEADER: I think it's important that we not be critical of the commander-in-chief, at a time when we are at war against terrorism.


SHIELDS: Senator Daschle defended his questioning and got support from high in the Bush administration.


DASCHLE: I think the Republicans' reaction is nothing short of hysterical. We are not a rubber-stamp to this president or to anybody else.

COLIN POWELL, SECRETARY OF STATE: They're raising questions. And I think that's what a loyal opposition does.


SHIELDS: Kate O'Beirne, who is right? Trent Powell or Colin -- Trent Lott or Colin Powell? Yes, there's a combination. Trent Lott or Colin Powell?

KATE O'BEIRNE, "NATIONAL REVIEW": I think even in combination, they got it wrong.


O'BEIRNE: But I'll set them right. Colin Powell, I think was overly generous. This is not loyal opposition. This is opportunistic opposition. The economy's improving. Enron seems to be bankrupt politically. Some Democrats are becoming increasingly frustrated with this standing shoulder to shoulder business. And Daschle's playing to the Democratic base, figuring we'll do better in November if we're attacking Bush on some ground. And he's decided maybe there's some room to do it here.

But I think Trent Lott overreacted. What Tom Daschle said was pretty tepid stuff. You know, trying to probe weaknesses without directly criticizing the commander-in-chief. And because, I think, it's a risky move politically, the Republicans really ought to sit back and let Tom Daschle try it.

SHIELDS: Al Hunt, Trent Lott did say, we didn't show it here, that Tom Daschle was trying to divide America.


SHIELDS: The mistake -- debate for disloyalty here.

HUNT: You know, Mark, on some of the substantive criticisms, I actually disagree with some of the Democrats. I disagree with Robert Byrd, for instance, about worry about the open-ended commitment to Afghanistan. I think it's just the other way. We have to be more involved in peacekeeping.

But the points, of course, Colin Powell's right. The point that Tom Daschle's raising, about the need for clarity of a mission. I mean, we say we're going to into Yemen, Georgia, Philippines were the same sorts of questions that Bob Novak has been raising, the same sorts of questions...


HUNT: Same exact questions that candidate George Bush raised in 2000. And I'll tell you what's even worse. For Trent Lott to say that really is outrageous, Kate, this is the same Trent Lott, who in 1998, said he could not support Bill Clinton or Secretary of Defense Bill Cohen or General Hugh Shelton, when they bombed Saddam Hussein.

You know, that's situational patriotism. Even worse is Tom Delay, who said Daschle's comments were disgusting. Same Tom Delay, who refused to support American forces in Kosovo, and said the atrocities were more due to Slobodan Milosevic than Bill Clinton.

NOVAK: Al has managed to turn this into an attack on Republicans.

HUNT: No, just those Republicans.

NOVAK: I'm just congratulating you, Al.

HUNT: Just those. But not Colin Powell, I agree with him.

NOVAK: I was just congratulating you. It was very great agility.

HUNT: Thank you.

NOVAK: I didn't think you could do it. The -- this is, believe me, I've talked to some Democrats. And this is not the Democratic plan. The Democratic plan is the Carville/Shrum plan, where you praise the president and the war, and you attack him on everything else.

How did this happen, then? Well, Senator Byrd, who is always an eccentric, but he's even more eccentric now. He had a little hard time getting that out, as you notice. And what it is, is he has so much pork barrel that he sends back to West Virginia, that he's worried if any money is spent for good purposes, that he'll get less pork in West Virginia.

Then they have the Daschle/Daley press conference. They say, "Do you agree?" What's he going to say? I don't agree with Bob Byrd? There goes the appropriations process. He says, "Absolutely." So he was kind of trapped into this.

But this is not good politics for the Democrats. And there's no question that that's not what they want to be doing. And it's -- you're not going to hear much of it either, in my opinion.

SHIELDS: John Breaux, Tom Daschle said I think there's an expansion of the war, without at least a clear direction. It's tough to argue with that, when we go to Yemen, which nobody had mentioned before, to the Republic of Georgia, which most of us couldn't find on a map. We're in the Philippines. They're talking about Colombia, talking about Iraq. This is an expansion of the post September 11, isn't it?

BREAUX: Mark, I think that what you saw was a premature discharge of the Republican political guns. I mean, they are desperately trying to say that Democrats are not supporting this effort. When in truth what Tom Daschle actually said was he said what's going on so far has been successful. You see a follow-up comment by the president's press secretary, trying to blame Bill Clinton for the violence in the Middle East.

I think that what they ought to be doing is ask them to consider Bill Clinton as a special envoy to the Middle East. He knows the players. Have him over there as -- under the instructions of President Bush. But what they're trying to do is somehow create a division in this area, when there is not.

SHIELDS: Bob Novak, you seem at this time less questioning of American policy and the expansion of the war?

NOVAK: No, I think that there are some -- I was just giving you a political analysis of it. But I do -- I think there is a problem of going -- a mission creep of going all over the place. But I will say this about Senator Daschle, who I like and admire, that Senator Daschle is a very partisan person. And I didn't -- and when the -- you brought up the Clinton administration. So I'll bring it up. When they were interfering every place in the world, I didn't see Senator Daschle talking about mission creep then. This was a partisan attack.

HUNT: Do you have any substantive differences of what Senator Byrd said, substantively? Any?

NOVAK: Yes, I don't like all that pork and...

HUNT: No, substantive differences in what he said about foreign policy? Any at all this week?

NOVAK: Well...

HUNT: I don't think you can find them, Bob.

BREAUX: (UNINTELLIGIBLE). We have a secret government that's in place somewhere in the United States. The Speaker of the House is in line to be president if something to the two leaders. Does not know about it, doesn't know where it is. The Majority Leader, the Minority Leader, the Republican leader, none of the leaders in Congress have any idea where the secret government is even being housed.

NOVAK: There's 150 bureaucrats out there, isn't there?

BREAUX: Well, the speaker should know that.

O'BEIRNE: Maybe I've been paying much closer attention than some people on this panel, but I have a clear idea why we're now we're now helping in the Philippines, and in Yemen, and in Georgia. And I didn't see Tom Daschle saying anything that the president has not been saying since September. It's going to be different kind of a war. It's going to fought in a much different way. There's not any front line.

And I do know how to get Senator Byrd for this effort. To get Enduring Freedom, name it Operation Robert C. Byrd, and he will become the biggest hawk on the Hill. NOVAK: And also have the take off point in West Virginia.

SHIELDS: This isn't about Robert C. Byrd. Let's get with...

NOVAK: Yes, it is.

SHIELDS: We're talking about 250,000 American troops required, if we're going to invade Iraq. We're talking about 100,000 to occupy it. Now that gets a debate. That isn't to talk about 100 people in the Philippines.


HUNT: I've been supportive of what we're doing in Afghanistan. I don't know why we're going in the Philippines. I really don't know that that is a great international terrorist threat.


HUNT: And I don't think these issues have been explained and it is about that. There are foreign policy questions.

NOVAK: I just want to -- Al and I introduced Colin Powell on "NOVAK, HUNT, AND SHIELDS" that ran today. And Colin Powell didn't indicate that we're going into Iraq. I think that...

BREAUX: But he did say, it was all right to questions.

SHIELDS: The president's closest advisers, Richard Pearl, and people like that, consistently say that.

NOVAK: Oh, he's pretty firm. The president's closest adviser...

SHIELDS: He's the chairman of the Defense advisory...

NOVAK: Oh, come on, Mark.

SHIELDS: ...board to Donald Rumsfeld.

NOVAK: Don't mislead the people.

SHIELDS: I want to get one point very clear here. Tom Daschle's a fierce partisan. Trent Lott is non-partisan bipartisan. And Tom Delay, that's it. Whoa, boy.

John Breaux and the gang will be back with renewing the Social Security war.


SHIELDS: Welcome back. President Bush rekindled the debate over Social Security privatization.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must apply the power of savings, investing, and compound interest to the challenges of Social Security, by introducing personal retirement accounts into the system.


SHIELDS: The president is not asking for immediate action by Congress, but Democratic leaders want to bring the issue to the floor now.


REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: I think it should be discussed before the election and not after the election. If the Republicans fail to bring it up, I intend to mount a discharge petition to bring up the president's plan.


SHIELDS: House Republican leader Dick Armey accepted the challenge, saying "This is not a task for the timid. We can choose to be the party of benign neglect or the party of bold change."

Bob Novak, isn't this debate a little politically dangerous for the Republicans before the election?

NOVAK: Not a little dangerous, it's very dangerous.


NOVAK: And that's why Tom Davis, the Republican campaign chairman for the House, doesn't want him to talk about it. He feels they almost lost two special elections because of the issue.

I think this one of the wonderful reverse spin things you'll find in politics, where the -- Mr. Gephardt wants a vote in the House on the president's bill. The president doesn't want to vote on his bill. What it's all about, of course, is that the last thing that the Democratic Labor Union Coalition wants is for workers to have their savings and control over it. And not controlled by the federal government.

But can you make this attractive? It's a very hard thing to frame. And that's why the president wants to keep it out of the debate under after the election for Congress.

SHIELDS: You think Enron and the loss of people's life savings and the collapse of Enron has in any way weakened the political position for the president on this one, John?

BREAUX: I think it's caused some difficult problems, but I think we can expect that Dick Armey's going to solve this problem in the House, because he's going to spend $10 million to send out a certificate to every American, saying that we're going to promise to pay Social Security benefits.

Now I'm not going to be around for the outrage of the week, but I think that certainly should be one of them.


HUNT: I just wanted to say to John Breaux, Dick Armey's certificate reminds me of the story of your fabled governor Earl Long, when he promised people he'd build them a parish, and then he didn't have the money. And his nephew, Russell, said, "What am I going to tell them?" And Earl Long said, "Tell them I lied." Well someday, someone's going to be around to tell them that Dick Armey lied about this, because George Bush basically made a calculation a year ago, Mark. Do you want to have a tax cut for the wealthy or do you want to have Social Security reform?

And he chose the former, because if you're going to have Social Security reform, it's going to cost a trillion dollars in transitional costs. Or you're going to cut benefits. One or the other, and Bob Novak on that point, is absolutely right. It politically won't fly.


O'BEIRNE: I think it could be dangerous for Republicans, because the Democrats love nothing better every election year, than scaring everybody about Social Security. But it won't be a danger, unless the Republicans go wobbly on this.

I think the Enron lesson for Social Security is, not unlike Enron, politicians lie about the fiscal health of the system when it comes to Social Security. And they figure they'll be long when Social Security can no more meet its obligations. And they can either raise taxes, cut benefits, or we can use private accounts to do some of the heavy lifting, to boost people's incomes.

Two-thirds of the public supported private accounts a year ago. Post Enron, two-thirds of the public still support private accounts.

NOVAK: Let me just say that I am all for private accounts. I'm for whole privatization, but the real truth is, and I bet you in his heart, John Breaux will agree with me. He may not say so, but that won't do the trick. What you have to do is eventually, you have to take this crummy system and put it on a means test, so that people like me and my wife, who now receive Social Security and don't need it, will not get the Social Security.

BREAUX: I support means testing, but one thing is not going to happen. We're not going to do anything substantive on Social Security reform this year. Every member of the Congress, every member of the Senate and the House, has our own thrift savings plan, where we can put a portion of our savings into the private accounts, but we're not going to less anybody else in American do it. If it's good enough for us, we ought to take a look at it.

NOVAK: But do you agree that you have to go means testing eventually?

BREAUX: Oh, I think so. Absolutely. SHIELDS: But John, isn't there a little bit something disingenuous in the part of the administration? Because they are saying it's ouchless and painless. It's a trillion dollars the have to come up with.

BREAUX: There's no question.

SHIELDS: To make that transfer or that transition.

BREAUX: This not free. We're going to find some money, which is rapidly disappearing, in order to make that transition. We don't have it, we can't do it.

SHIELDS: Last word, John Breaux.

Next on CAPITAL GANG, what recession?


SHIELDS: Welcome back. Federal Reserve Chairman Alan Greenspan's testimony to Congress was unusually upbeat.


ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: We will have experienced a significantly milder downturn than the long history of business cycles would've led us to expect. Crucially, the imbalances that triggered the downturn and that could have prolonged this difficult period did not fester.


SHIELDS: His testimony was followed by unexpected good news from the Commerce Department that the economy grew 1.4 percent in the fourth quarter of last year, after falling 1.3 percent in the third quarter.

Al Hunt, was there really no Bill Clinton recession after all?

HUNT: Let's face it, George Bush wants, right? Mark, it appears that there was a short and small downturn. Looks like we're coming out of it. I think the tax rebates helped a little bit. And I think aggressive action by Chairman Greenspan's Federal Reserve helped a lot, 11 interest rate cuts last year alone.

The good news is that we're coming out of it. The bad news is, Mark, I suspect it's a U-shaped recovery. You know, a very modest going down and very modest coming up. And it may be quite a while before we enjoy the boom times in the mid and late '90s again.

SHIELDS: John Breaux, are we back to boom times?

BREAUX: Well, I think what we're seeing is that the Congress debated the economic stimulus bill right through the recession. We never passed it, but the recession's over. And I think the principle reasons for the economic stimulus package, you just heard Alan Greenspan and in effect say we don't need it. We're making progress.

I mean, his interest rate cuts, I think, have been effective. I don't think you're going to see a big debate on an economic stimulus package.

SHIELDS: Kate O'Beirne?

O'BEIRNE: Mark, more bad news for Democrats this November. It's not the economy, stupid. Thus the flailing around looking for something else. And I think it's pretty clear that Bush tax cuts, with the help of senators like John Breaux, help rescue us from the Clinton recession. It's as simple as that, Mark.

SHIELDS: Is that, OK? I knew Bill...

O'BEIRNE: Have I made it clearer for you?

SHIELDS: I knew Bill Clinton would get in here somewhere.

O'BEIRNE: Have I made it clearer for you?

NOVAK: Yes, I admire John Breaux for breaking party ranks to support the stimulus package, the bipartisan stimulus package. But it wasn't any good.


NOVAK: It wouldn't have helped anything. And the idea that didn't pass was no great tragedy.

Let me shed a little gloom on this happy...


NOVAK: I just get a little bad feeling talking to people about this economy. I think profits are down. I think these statistics of growth of these growth figures of 1.4 up, 1.3 down, don't mean much. What I find is that there is a national liquidity crisis. People are not borrowing money. There's a credit crunch going on. There's a lot of concern.

And I believe that the real estate market is what's holding up the entire economy. If that ever collapses, we're in trouble. And if the fanatics on Capitol Hill take the Enron situation to really make some restrictive rules on the secondary mortgage market, we're going to be in a lot of trouble.

So I don't think it's -- I don't think that we should rest assured that happy days are here again.

BREAUX: They're projecting 2.5 to 3 percent economic growth. You know, and the whole reason for the economic stimulus package is that we are -- we were not growing at all. And therefore, Congress do something quickly. Well, what we did is debated it and didn't pass anything. And yet, we grew out of the recession without the economic stimulus package at all. SHIELDS: Al Hunt, inside Mr. Novak's rather gloomy narrative...

HUNT: It's so unlike him.

SHIELDS: No, I agree. I agree. I mean he's usually Sunnybrook Farm. But I wanted to ask you, aren't we truly talking about there's going to be an impulse to regulate after the Enron thing? I think that bothers...

NOVAK: That bothers me, yes.

SHIELDS: But I mean, it cries for regulation.

HUNT: Bob is the defender of Fannie Mae. I didn't know that before, but I...

NOVAK: I didn't think I said that.

HUNT: You're worried about the secondary mortgage market. I think some regulation's absolutely essential. I mean, the accounting firms. That doesn't have anything to do with liquidity or anything to do with economic growth. I think some of the things we did on derivatives, you know, have to be looked at again. I don't think that threatens any kind of economic growth.

BREAUX: I think Congress is going to do that. I mean, we're not going to see that people go to jail. Somebody else is going to do that in the Justice Department. But what I think Congress can and will do is say, look at these accounting firms. You can't be partners with the people that you're auditing. I mean, you can't let that happen.

NOVAK: It might put the corporations in a straight jacket if you eliminate these off the balance sheet accounts. I mean, Congress always goes too far, John.

BREAUX: Well, they have to made public. We can't have a company that has 800 offshore accounts.

HUNT: And we ought to have transparency. That's what make a capitalistic system work, Bob Novak. I'll explain it to you after the program.

SHIELDS: Last word, Al Hunt. The gang will be back with the CAPITAL GANG classic, looking back at the first terrorist attack on the World Trade Center nine years ago, this very week.


SHIELDS: Welcome back. Nine years ago this week, terrorist hit New York's World Trade Center with a bomb that killed seven people and injured thousands. The CAPITAL GANG discussed it on February 27, 1993 with conservative William J. Bennett as our guest.

(BEGIN VIDEOTAPE) NOVAK: I think the message to Americans is that we may be paying a very high price for being the nanny, the busybody, the policeman of the world.

HUNT: We do have an open society. New York City is an open city. We really are terribly vulnerable, aren't we?

WILLIAM J. BENNETT: I think the shock here is, in some ways, how vulnerable we are. We think today, I think sometimes, that because we have control of nature, technology, communications, we somehow have control over this sort of thing. But we don't. And this proves it.

SHIELDS: If in fact our foreign policy and the actions of our government are going to be dictated by a terrorist act, where we don't know whether, in fact, it was, what its nature, where it came from, whatever else, that somehow this is going to effect the United States' role and obligations and mandate a destiny of the world I think is absolutely wrong.

NOVAK: What I am saying is that we have thought in this post Cold -- post Soviet era, that we can traipse around the world, butting in other people's affairs, saying -- being the referee, without consequence.

HUNT: (UNINTELLIGIBLE), we don't have to have our foreign policy set by someone who can threaten to blow up a building, do we?

BENNETT: No, no, no, of course not. There's a lot of crazy people out there. And there are a lot of people who are happy to take the credit for it, for the notoriety that this will give them.

That's another point of vulnerability of the modern culture.


SHIELDS: Bob Novak, did the United States learn anything from that 1993 attack?

NOVAK: No, we certainly didn't prepare for anything like what happened September 11. I can't disagree with anything I said then. I think that certainly that we had a Gallup poll the other day, showing that -- how much we're hated in the whole Muslim world. And there seems to be very little interest, but the battle is joined now.

They killed thousands of Americans. We have to fight them. And the war is on.

SHIELDS: John Breaux?

BREAUX: History's a powerful teacher, Mark. And I think that this is something that we should've learned then, but we didn't, as Bob has said. The world is a different place today after 9/11. And I think that you'll never see a group of Americans with the same attitude we had after 1993. People are concerned. They're worried about what people think of us around the world. And they want us to be involved in helping to shape that information. SHIELDS: Kate O'Beirne?

O'BEIRNE: What Bob ignored is the fact that our most recent intervention, before that first attack on the Twin Towers in '93, when we were last a busybody, was to protect Muslims by throwing Saddam Hussein out of Kuwait. And it didn't seem to make much difference in the Muslim world.

I think one lesson we've learned certainly since September 11, is our weak response last time emboldened the terrorists, that we wouldn't defend ourselves.


HUNT: I think in a free democratic society that you don't make big changes, usually, until big things happen and bad things happen. And I think we did a cost benefit analysis as a country. And we assume that we didn't have to do more than we did. We were wrong.


BREAUX: You know, I think just as a follow-up, I think too that when President Bush says we're not going to go -- only go after terrorists, we're also going to go after countries that harbor terrorists, that's a big difference now. We were focusing on the terrorists, not where they came from and who was helping them. There's a difference.

NOVAK: You don't think we're biting off too much, perhaps?

BREAUX: Well, we can't do it by ourselves.

NOVAK: That's for sure.

BREAUX: I mean, this is not something we can unilaterally do. Other countries have to help.

NOVAK: And do without.

BREAUX: Bob Novak and Robert C. Byrd agree that we're biting off too much.

SHIELDS: Thank you very much, John Breaux. Thank you for being with us.

We'll be back with a second half of CAPITAL GANG. Our "Newsmaker of the Week" is the mayor of Chicago, Richard M. Daley. We look "beyond the Beltway": Next Tuesday's Republican primary for governor of California, but "Los Angeles Times" political writer Mark Barabak, and our "Outrage of the Week." That's all after the latest news following these urgent messages.


ANNOUNCER: Live from Washington, the CAPITAL GANG.

SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak, and Kate O'Beirne.

Our "Newsmaker of the Week" is Mayor Richard Daley of Chicago. Richard M. Daley, age 59. Residence, Chicago, Illinois. Religion, Roman Catholic. Undergraduate and law degrees from DePaul University, elected to the Illinois State Senate at the age of 31. State's Attorney of Cook County for eight years. Mayor of Chicago since 1989.

Al Hunt sat down with Richard Daley at Chicago's Hyatt Regency Hotel last week, after the mayor delivered his state of the city address there.


HUNT: What is the state of urban American in general, and Chicago in particular?

RICHARD DALEY, MAYOR, CHICAGO: Well, I think not only just Chicago, but it's throughout the country, it is getting better because I believe that everybody has decided it's not just the mayor. It's a business community reorganization churches, just to make a better life for people in large cities, medium size, even smaller cities.

HUNT: From your vantage point, is the economy going to worse, get better, get much better?

DALEY: Well, we're hearing it's going to get better. It's going to be slowly going to get better. It's not going to just jump back quickly.

HUNT: One of your top priorities now is to reform public housing. Great liberal idea of 50 years ago gone sour. Chicago has had more than its share of problems. Can you really change public housing?

DALEY: Well, the answers are not in Washington, D.C. Somewhere we got caught up in saying that high rises all over the country was the answer, even low rises. And you can go to any city. They're taking low rises out. They're taking high rises out. Was the idea that public housing was supposed to be transitional. And then, all the federal restrictions, federal restrictions you couldn't work, you couldn't get married, these are all federal Washington policies that came down, both through Democrats and Republicans.

HUNT: Is the Bush budget good or bad for Chicago?

DALEY: Well, I think they're becoming much more flexible, which we want. If you take federal money, there's federal laws. There's federal rules and regulations. They're saying this, that you take X amount of money off. The money for education's supposed to go right to the child, not to a lot of bureaucracy in federal, state and local bureaucracy.

HUNT: How about the proposed cutbacks in the Bush budget for things like the Koch program and the job training?

DALEY: Well, we're looking at the Koch program because what we're saying is that if you take that money, are you going to put it into technology? Are you going to put it into other things that are necessary that are necessary for law enforcement? And that's what they have to have.

Because an accounts program, eventually the local community has to absorb the cost of that police officer. The Koch program is a wonderful program for the country. But like anything else, if they're going to look at it differently, I would keep the same amount of money committed to law enforcement.

HUNT: Anti-terrorism, the president proposes $3.5 billion to states and localities for police, fire fighters, hospital rescue. Sounds pretty generous?

DALEY: It is, but it's out of -- it's $35 billion. And the federal government gets 90 percent of it.

HUNT: Right.

DALEY: We're supposed to have a plan. Mayors may ask the federal government, what is your plan? If you're getting 90 percent of the money, what are you going to do with it? Are you going to protect the borders of Mexico, the West coast, Canada, the East coast, the Southern coast? Are you going to use money for other purposes? What is it?

So we have to know what the federal plan is, so when we submit our plan, whether it's state, whether county, or city, that we don't duplicate the same programs they're doing.

HUNT: Let me ask you about the president. How is George W. Bush doing politically?

DALEY: Well, I think he's doing very well. I think people have underestimated George Bush. And I was a strong supporter of Al Gore. Once the election's over, let's move on with it. It's very partisan in Washington, D.C. And I can be partisan in election time.

But afterwards, I think American public is telling the elephants and the donkeys, set aside. You know, let's find out what's really good for America. I think George Bush is doing a very good job.

HUNT: Looking ahead, which one or two Democrats would appear to be the most formidable for 2004?

DALEY: I think it's much too early. I think America gets tired of that. You just elected a president. And all of sudden, we're saying what's going to happen in four years? I think a lot of candidates should sit back, do the job they're elected for. Once they start campaigning New Hampshire, and Iowa. They start -- it's kind of laughable.

HUNT: But would you like to see Gore run again?

DALEY: I think we're fortunate to have people who are ready and willing to run for president. (END VIDEOTAPE)

SHIELDS: Al, the Democrat mayor of Chicago did not sound very partisan, but isn't it in fact -- I mean he has taken on two of the biggest, most bothersome problems that any mayor faces. He's taken responsibility for public schools and for public housing.

HUNT: This is so true. He really does. He did not sound very partisan. He does take on the -- because they took over the schools some years ago. I visited one of those troubled schools this week. You know, they still have troubles, but let me you they're getting better. And the public housing, it's a gutsy thing to do. And I think it'll make a difference there, too.

Richard M. Daley...

SHIELDS: That's right.

HUNT: America's premier mayor.

SHIELDS: Premier mayor?

NOVAK: Well, I couldn't agree with you more. He -- Richard Daley has been a surprise to everybody. He's a perfect mayor. And although he's a loyal, life-long Democrat, of course, he's going to support Al Gore. He's not really interested in partisan politics. They don't even run. His last free election, he ran on an non- partisan ballot. He admired Ronald Reagan very much, I know. He admires George W. Bush. He doesn't want to get into the -- you know, a lot of opportunities in that interview to zing the Republicans.

I guarantee you Tom Daschle would've zinged them with those kind of questions. But he's not into that game. And I think he's just doing a terrific job and probably the best mayor Chicago has ever had.

SHIELDS: Best mayor Chicago's ever had? Premier mayor of America, Kate?

O'BEIRNE: Well, who might disagree with an Illinois native like Bob? I do think it's interesting to talk with a Democrat outside Washington like Mayor Daley. Bill Bennett made headlines as Secretary of Education by calling Chicago's school system the worst in the country. And of course, they've been plagued by problems in public housing.

So here's somebody responsible to the citizens of Chicago, who has to deliver. So he's willing to question the kind of Democrat -- traditional Democratic approaches to public housing and public education.

SHIELDS: The same kind of accountability we don't hear from anybody at Enron for responsibility...


SHIELDS: I mean, we talk about the private -- we talk about private leadership.

O'BEIRNE: We don't hear it on Capitol Hill.

SHIELDS: This is public leadership.

HUNT: One final, quick point. When he took over, your colleague David Brooks reminded me, he covered Chicago in the '80s. When he took over, city councilmen used to come packing pistols to work, it was so tense in Chicago. That, too, has totally disappeared. He's made a big difference in that city.

SHIELDS: Last word, Al Hunt.

Next on CAPITAL GANG, "Beyond the Beltway" looks at a possible surprise Republican nominee for governor of California with "Los Angeles Times" political writer Mark Barabak.


SHIELDS: Welcome back. "Beyond the Beltway" looks at the Republican battle to run for governor of California. The latest field poll shows a big shift among likely voters in next Tuesday's Californian Republican primary. Businessmen Bill Simon, Jr., son of the late financier, former Treasury Secretary leads former Los Angeles mayor Richard Riordan by six points after trailing him by 33 points.

The field poll shows both Simon and Riordan narrowly leading Democratic governor Gray Davis. The change follows a battering of Mayor Riordan in commercials by Governor Davis and later Bill Simon.


ANNOUNCER: For years, Riordan helped finance the anti-abortion movement and said abortion was murder. Now he says he's pro-choice. Riordan, is this a record we can trust?

ANNOUNCER: Riordan called Bill Clinton the greatest leader of the free world. Riordan says he's not Reagan Republican. Bill Simon says Ronald Reagan, President Bush, and Rudy Giuliani are his heroes.

ANNOUNCER: Riordan, two-term mayor of the second largest city in America. Simon, no experience in elective office. Now you know why Gray Davis has spent $8 million trying to defeat Riordan in the primary.


SHIELDS: Joining us now from Los Angeles is Mark Barabak, the superb political writer of "The Los Angeles Times," who was covering this race. He joins us now by phone from Los Angeles.

Mark, will the Democratic governor Gray Davis succeed in picking his Republican opponent for November by spending $8 million of negative ads against him?

MARK BARABAK, LA TIMES POLITICAL WRITER: Well, that supposes that Richard Riordan's going to lose on Tuesday. And at this point, things have turned around so quick, I'm wary of making any kind of predictions. It was just a week ago, literally, I did a story that broached, for the first time, the possibility that Riordan may not face Gray Davis. And people were shocked at that. And I think a lot of those same people now would be shocked if Riordan comes back and wins.

I think you can say a few things safely. Gray Davis has spent what has to be more money than anyone ever in opposition primary. He has now spent $10 million in Republican primary. He's also said it seems some kind of record for cynicism. He put a former Republican governor in his ad, attacking Richard Riordan.

I don't know if he's going to pick his opponent, but he has certainly managed to weaken Richard Riordan, if he makes it through the primary, and maybe through the race to Bill Simon, who at this point at least, is the guy he wants to face.

SHIELDS: Well, not that history repeats itself, but in 1966, the Democratic governor facing tough re-election himself, was -- Pat Brown, was faced with the possibility of running against Warren Christopher, the popular moderate mayor of San -- George Christopher, the mayor of San Francisco. Are a rookie, conservative, ex-movie actor. And he wanted to run against the movie actor. And he got him.

BARABAK: That's absolutely right. He got Ronald Reagan. And as they say, you know, the rest is history. You know, Bill Simon, the only problem looking at it from this perspective is, California's in the last several elections, have had a history of rejecting conservative Republicans.

We did our own poll. And there's some very interesting information. We asked the general electorate, all registered voters, how do you describe yourself? You get one-third conservative, one- third liberal, one-third self-described moderates.

On the other hand, of the likely Republican primary electorate, 75 percent call themselves conservative. That explains why Richard Riordan is in the trouble he's in. He ran a general election campaign. He ran a campaign aimed at that 33/33/33 electorate. And it looks, at this point anyway, like there's going to be a hugely conservative turnout.

His problem always was getting through the primary. And his mistake, as even his people tell you, is making this race as close as it has by looking past that primary to the general election.

SHIELDS: Bob Novak.

NOVAK: Mark, you covered this race. And Simon is a real political neophyte. Riordan, after all, did get elected mayor of Los Angeles a couple of times. But what is your opinion of Simon. Is he somebody who -- if he does happen to win the primary, is he somebody who could turn toward the middle, who could be a moderate or be a non- ideological person, and say, I mean, obviously, there's some public discontent with Gray Davis. Is he -- what I'm asking, do you think he can possibly beat Gray Davis?

BARABAK: I do. I do. I don't put it beyond his reach at all. His people, Simon's people, will tell you that the Republican party's problem in California is the branding problem. If people agree philosophically with a lot of positions like lower taxes, like less regulation, like a better approach to energy.

And what he has done is de-emphasize the sort of hot button issues that have put people off in the past. Immigration, abortion, those sorts of things. And he always does it with a smile on his face. And so, you don't underestimate personality, coming across in warm and friendly way, in the way President Bush did when he ran, kinder, gentler, sort of conservative, not as threatening.

So I don't put it past him. I don't put an upset past -- like I said, no one thought Richard Riordan was going to lose this. And I think there's plenty of chance that Simon could pull an upset in November.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Mark, Rudy Giuliani and Bill Simon are old colleagues and friends. And Rudy Giuliani was credited with helping a Republican -- or Democrat, one is a Republican a mayor of New York. How helpful will he be seen to have been if Bill Simon wins this primary next week?

BARABAK: I'm not sure that he conferred so much support, as the fact that they got people's attention. We haven't talked at all about the fact we're having a March 5 primary. It is insanely early for California. You could walk down the streets of California today, handing out $10 bills to anybody who knows there's a primary on Tuesday. And you probably wouldn't empty your wallet.

Very, very early primary. People weren't paying much attention. And what they did was they looked up on their TV screen. And they said, "Oh, Rudy Giuliani." What we found in our poll was a lot of people who knew they sort of didn't like Riordan. And they sort of knew there was this other guy out there who was running, whose name was Bill Simon, because they had sort of seen Rudy Giuliani in one of his ads. So I'm not sure it was a transference of support so much. It was just getting people's attention and getting them to tune into the race and tune into Bill Simon.

HUNT: Mark, we only have about 15 seconds left. But quickly, if Riordan loses, this would be a real blow also to George Bush's people out there. Jarrett Parksy (ph) and Karl Rove, who got Riordan in the race, wouldn't it?

BARABAK: Absolutely. They were the ones that got them in the race. They were the ones who've been working behind the scenes, although they deny it, pushing Riordan. If he loses, it is a big repudiation of the president and his proxies and their effort to try and move the party here in California more toward the middle.

SHIELDS: Mark Barabak, thank you for being with us. Thanks for your great coverage of this race. And the gang will be back with the outrage of the week.


SHIELDS: Now for the "Outrage of the Week." Thanks to David K. Johnston of "The New York Times," we know of the stampede of United States companies now incorporating in Bermuda. Profit trumps patriotism. These fictitious Bermuda companies enjoy all the benefits of U.S. citizenship with contracts in force by the U.S. courts and their families defended by the nation's military. But these corporate freeloaders want to avoid the taxes they owe. And the Bush White House says nothing about these phony transactions and their effect on the nation's tax receipts.

This administration's words to the well off and the wealthy, you will pay no price. You will bear no burden. And you will meet no hardship.

Bob Novak.

NOVAK: In what's Jerusalem today, a suicide bomber killed himself and 10 Israelis, while injuring dozens. Unfortunately, Israel under Prime Minister Sharon, does not have clean hands. Earlier this week, Israeli military forces raided two Palestinian refugee camps, killing 22 Palestinians, including a 9-year old girl, a 15-year old boy, and a 60-year old man. U.S. State Department officials are outraged by the bloodshed caused by the Israelis. But because of U.S. policy, they do not condemn Sharon's recklessness just as they properly condemn the suicide bomber. They should condemn the Israeli outrages.

SHIELDS: Kate O'Beirne.

O'BEIRNE: If you think voting should demand at least the same proof of identity required to rent a video, then you disagree with Senator Charles Schumer of New York, who tried to weaken anti-fraud provisions in the election reform bill. He believes it's too burdensome to ask those who register by mail to provide proof of identity the first time they vote.

Elections typically find dogs registered to vote and dead people casting ballots. Schumer claims he wants to boost voter participation by household pets and the dearly departed?


HUNT: Mark, the woman who killed her five children, Andrea Yates and her husband, are Evangelical Christians. He insists the wife should submit to her husband. Conservatives would be outraged if this were used to smear all Evangelical Christians. Yet, in the case of Taliban fighter John Walker Lindh, they freely charge he's a product of the Marin County hot tub set.

Take your choice. Either these are individual acts of derangement or both perpetrators reflect their cultural environment.

SHIELDS: This is Mark Shields saying happy birthday to Bob Novak. And good-night for the CAPITAL GANG. If you missed any part of this program, you're in big trouble, but you can catch the replay at 11:00 p.m. Eastern and again at 4:00 a.m. Eastern.


Can Richard Riordan Win Republican Gubernatorial Primary in California?>



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