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Can Cigarettes Be Taxed Out of Existence?; Will Bush Really Reform Business?; J.C. Watts Declines to Run for Fifth Term

Aired July 1, 2002 - 19:00   ET


ANNOUNCER: CROSSFIRE. On the left: James Carville and Paul Begala. On the right: Robert Novak and Tucker Carlson.

In the CROSSFIRE tonight: He's back, and sounding like a candidate.

He's going, and it highlights something missing from the GOP.


REP. J.C. WATTS (R), OKLAHOMA: I don't think that we can continue to compete over the next 12 to 15 years if we don't do a better job.


ANNOUNCER: Look who's talking about corporate greed:


DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The government will fully investigate the two wrongdoers.


ANNOUNCER: And should cigarette buyers get smoked by drastically higher taxes?


From the George Washington University: James Carville and Robert Novak.


Tonight, an idea that may or may not light your fire. What do you think of taxing cigarettes out of existence? Also, when the Bush administration starts talking business reform, is it just like the pot calling the kettle black?

There's so much political news today, we can't wait. So let's get right to the "CROSSFIRE Political Alert." You don't need two hands to count the number of prominent black Republicans, and pretty soon you'll have a finger to spare. J.C. Watts, the only black Republican in Congress, is calling it a career. He decided not to seek re-election to a fifth term, despite having his arm twisted by party leaders in and out of Congress.

They even got civil rights legend Rosa Parks to write him a letter saying she refused to give up a seat on a bus, and he shouldn't give up his seat in Congress. Watts saying that's hitting a little below the belt -- and it kind of is, isn't it? And he's leaving anyway.

Watts wants to spend more time with his family, and who wouldn't want to spend less time with Tom DeLay, Dick Armey and the rest of the GOP gang on Capitol Hill?

ROBERT NOVAK, CO-HOST: That big sigh you heard over the weekend didn't come from Al Gore. It was from other members of the Democratic Party who are realizing the former vice president is really serious about making another run for the White House, and the cheering came from Republicans.

During a so-called retreat in Memphis over the weekend, Gore made an apology. He spent too much on the 2000 presidential campaign, he said, listening to consultants, strategists and pollsters. In other words, it was their fault, not mine.

Gore says if he runs this time, he'll let it rip and spend more time speaking from the heart. Gore then ripped into President Bush's handling of everything from the economy to the war on terrorism, sounding very much like the Gore of 2000. He said he'll wait until early next year to make a final decision about 2004. I can hardly wait.

CARVILLE: Starting today, every school in Virginia has to display a poster that says "In God We Trust." Virginia schoolchildren are already required to start the day with a moment of silence and say the unabridged Pledge of Allegiance, including the line "one nation under God."

"In God We Trust" is the U.S. national motto approved by Congress in 1956.

Its posting in Virginia schools is required by a brand new state law. We're still waiting for Virginia's legislature to pass a law giving equal time requiring all churches to post a copy of the Bill of Rights, especially the part about freedom of religion.

NOVAK: Do you oppose "In God We Trust"? Do you think that's un- American?

CARVILLE: No, it's fine on a coin. But when are we going to stop it? I'm find for saying "under God" in the thing, but schools need to spend more time learning and less time praying -- leave the praying to the churches and people at home.


NOVAK: Embarrasses you to talk about God, doesn't it?

CARVILLE: No, it doesn't embarrass me to talk about God.


CARVILLE: Well I just said...


CARVILLE: ... well I said it four times in the thing. That's an old cockamamie Republican right-wing thing. If you're not out there publicly claiming you love God more than everybody, everybody else hates God. You know, some people can have religion and it could be a private matter.


OK, and some breaking news. We have two planes have collided over southern Germany, and when we get more news, we will bring it to you.

CARVILLE: Now that's something to pray about.

NOVAK: And now back to our "Political News Alert."

Bob Smith of New Hampshire is not your usual Republican senator. He left the GOP briefly in 2000 to run for president, and this year he's being challenged for the Republican Senate nomination in New Hampshire by Congressman John E. Sununu.

The party establishment backed John Sununu. That includes former Senator Alphonse D'Amato of New York, who attended a Sununu fund- raiser at the 21 Club in New York.

When Smith found out, he hit the roof. Smith had sponsored a bill to name the federal courthouse in central Islip New York after D'Amato. He immediately stopped action on the bill, killing the D'Amato courthouse. Said Bob Smith, the fact that he has a fund- raiser for Sununu has nothing do with it. I'm not that kind of person.

Senator, you could have fooled me.

CARVILLE: You know I saw Senator Smith Friday afternoon. He was going down to a fund-raiser in Florida and I was going down for a speech and had a long talk with him. He thinks he's going to win that primary.

NOVAK: Are you supporting him? I bet you are.

CARVILLE: Supporting Bob Smith? I'm not...


CARVILLE: ... I'm not supporting anybody. He's your kind of Republican. He's the most pro-life man in the world.

President Bush signed an important bill today, but he wasn't surrounded by glad-handed lawmakers. Don't stumble over a fancy speak. He didn't even call the TV cameras. In fact, the only reason we know it happened is because his press secretary issued a one-line paper statement.

What is this new law -- great new law? This new law raises the debt ceiling by another $450 billion so the government can borrow enough money to keep running for the rest of the year. They'll probably have to raise the debt limit again before spring.

Remember the good old days, like two years ago, when the U.S. used to run a budget surplus of $5.6 trillion? Mr. President and the Republican Party, where in the hell did all the money go?

NOVAK: Only you, James, can say that with a straight face after all the red ink under Democratic presidents for the last 70 years.

CARVILLE: Hey, but Ronald Reagan -- Ronald Reagan and George Bush tripled the amount of debt that this country did. Deficit spending is a unique Republican thing, and they ought to be ashamed of themselves and these clowns have come in and run through $2 trillion in Social Security trust fund and 5.6 trillion...

NOVAK: It's...

CARVILLE: ... in the surplus.

NOVAK: ... the big spending that's caused the deficit...


CARVILLE: Why did, under President Clinton, the thing go to $5.6 trillion?

NOVAK: Because they had a Republican Congress at that time.


NOVAK: John Kerry is a U.S. senator from Massachusetts -- or is it Iowa?

He was back in the Hawkeye State again this last weekend. Iowa is not only where the tall corn grows, but where the delegate selection process begins, and Kerry is considering running for president.

John Kerry, tall, aloof, aristocratic, the richest man in a Senate loaded with millionaires. How will he do in a state that loves pork tenderloin, amateur wrestling and girls' basketball and whose orneriness was celebrated in "The Music Man."

If blueblood New Englander John Kerry can win in Iowa, maybe he deserves the presidential nomination.

CARVILLE: He's not the richest man in Congress, but he has the richest wife in the Senate.

There's a little bit of difference -- he's a real good guy.


CARVILLE: I understand.


CARVILLE: But he is a -- he is a good guy. I tell you, I think he's going to do pretty well wherever he goes.

I'm always accused of not saying anything nice about Republicans. So listen up. I want to wish the best to Senator Fred Thompson and his new wife Jerry King (ph). They met on the Fourth of July 1996 and tied the knot over the weekend. She's a 35-year old political media specialist. Fred's 59 and is known for his movie roles, his stint as minority council of the Senate Watergate Committee and a long and distinguished Senate career that wraps up at the end of his term.

The left side of CROSSFIRE wishes the Thompson-King (ph) family him all the best.

NOVAK: And the same from the right.

CARVILLE: Thank you sir. We love romance here on both sides.

Now let's go back to another possible contender for president in 2004. If Al Gore wants a nomination, can anyone really stop him? And judging by the way he was acting in Memphis this past weekend, he sure looks like he wants another shot at George W. Bush.

Stepping into the CROSSFIRE, former Gore campaign manager, Donna Brazile and Republican consultant Charles Black.

NOVAK: Donna Brazile, you were Al Gore's campaign manager. You did a very good job. So...


NOVAK: ... maybe you can explain to me, he says he wants to apologize for what a lousy campaign he ran, how he lost that campaign is still a mystery, and yet he says it wasn't his fault -- it was the fault of his paid consultants who gave him the wrong advice.

Who's he talking about?

BRAZILE: Well, I don't know who he's talking about. But I could tell you this: I was his campaign manager. I was not a paid consultant or adviser, and I thought Al Gore won the election. He got out his vote and if we had counted 6 million Americans who had their votes tossed out, Al Gore would be in the White House today.

NOVAK: Oh Donna, you can't change the subject. Let's not change the subject. Let's stick to the question I asked you. He didn't raise this point. I didn't say, hey, what are those dirty tacticians and pollsters and consultants doing?

He brought it up. What in the world...

BRAZILE: Well you know Bob...

NOVAK: Just a minute -- just a minute, what is he is talking about? Can you explain that to me?

BRAZILE: Well you know Bob, as you -- when I became campaign manager, one of the first things I did was I sat down, I looked at the books and I cut many of the consultants off the payroll and I cut salaries of other consultants.

So I guess Al Gore was referring to all the people who volunteered and gave him advice and advice, I...

NOVAK: No, he's talking about the people he paid. Consultants -- you can't say that. This was long after you came on board.

BRAZIL: Well, I'm going to defend some of the consultants who worked for our campaign, because they worked very hard...

NOVAK: Who's he talking about? Who's he...

BRAZILE: Well I know who he's -- I mean, I didn't talk to Al Gore before this, but I can tell you I believe that Bob Shrum, Claude Eskew (ph), Stanley Greenberg and many others...

NOVAK: That's a...

BRAZILE: ... did a fantastic...

NOVAK: ... cheap shot...


BRAZILE: They did a great job. I believe they did a great job...


BRAZILE: ... because he won -- he won the election. We got out our message -- and, you know what, the American people are ready for the comeback.

NOVAK: So Gore is taking a cheap shot?




BLACK: I don't get it.

CARVILLE: His consultants actually won and Bush's consultants lost.

And I got to give Bush credit, at least he didn't attack his consultants for losing the election. I mean, you know, one of the things I -- you and I worked on against each other in 1984.

The truth is you kicked my -- you kicked my ass down in Texas, Ed.

BLACK: I thought he was going say we stole it.

CARVILLE: No, that's one you did -- that's one you actually won.

But what -- and the vice president said it was consultants, pollsters and tacticians -- and I've been in politics for a long time as you. We've probably got 40 years together. What's a -- what is a campaign tactician? Do you know of any?

BLACK: I assume that a tactician is somebody who says where to go on the schedule, what ads to run when. But who knows? Listen...

CARVILLE: Do you know -- who -- Donna, who was...



CARVILLE: I never...

BRAZILE: ... didn't have a tactician. We had a number of strategies.


BRAZILE: I don't know. I believe...

BLACK: Now Gore wouldn't just make this up. Of course you had tacticians.


BRAZILE: I think -- I think he said the word "strategists," and not "tacticians," and I don't...


CARVILLE: What consultant do you think told Al Gore he ought to attack the consultants?

BRAZILE: I have no idea.

BLACK: Well, just see how entertaining it is to have Al Gore back.


BLACK: I am so glad he's back. (CROSSTALK)

BLACK: I'm so glad he's back.


CARVILLE: I bet he would have -- he would have been -- he's a hell of a guy.


NOVAK: But Ms. Brazile, you know, I'll tell you why Republican are so giddy about the thoughts of another Gore campaign.

Let me just take you a couple of polls and put them up on the screen and show you. For instance, a Bloomberg News poll just taken which shows that the election -- if the election were held today, Bush 56 percent, Gore 32 percent. Now I know that's -- we're not even close to a presidential election, but that's a big margin.

But here's the one I really like. This is a CNN/"USA Today" poll. Do you want Gore to run for president? This is by Democrats only. Democrats only! Yes, 46 percent, no, 49 percent.

This is the guy that you and James are saying won the election...

BRAZILE: Well, he did.

NOVAK: ... and 49...

BRAZILE: He did.

NOVAK: ... percent of the Democrats don't want him to run again. Don't they think he's a lousy candidate?

BRAZILE: Absolutely not. I think there are a good number of candidates that are out there right now that are campaigning for votes. (UNINTELLIGIBLE) New Hampshire, and I think Democrats are looking for a fresh face.

But I do believe if Al Gore decides to run, that's his decision, he's going to...

NOVAK: Will you support him if he decides to run?

BRAZILE: Well, I'm not working for any campaign in 2004.

NOVAK: Was that a yes or a no?

BRAZILE: That's a no.

NOVAK: You won't support him then?

BRAZILE: No, I'm neutral.



BRAZILE: I'm not a tactician. I was a staff person. I worked my butt off, and that's why we won.

BLACK: You did -- you did a great job.


BLACK: You took a weak horse to first place...


BLACK: ... congratulations.


CARVILLE: What I don't -- I want to go back to the vice president's remarks and don't -- and I wish we had him on here. In fact, if I get a chance to talk to him -- why, of all the things that's wrong with the country, why -- I mean political consultants? I mean, I've heard of political consultants advise a candidate to go negative on another candidate. This is the first time I've seen a candidate go negative on a political consultant.

BLACK: Well listen, we all know that 98 percent of every campaign is the candidate, their character, their personality, what they stand for. Consultants and campaign managers and media people can make a difference on the margins. They can help the person present their case in an organized way.

But the consultants aren't going to elect a weak candidate, nor are they likely to bring down...


BLACK: So Al Gore...


BLACK: ... Al Gore has to face the fact that if there's a problem here, it's him.

But it's not a good way to start a race to come out of the box and say, you know, I ran as a phony last time, but trust me this time: You're going to see the real me.

BRAZILE: I think it's healthy for Al Gore and many of his supporters to get together and talk about what went wrong and what went right in the campaign.

And it is true at times in a campaign, the vice president perhaps received some bad advice from some of the consultants and he -- you know, he listened. NOVAK: What bad advice?

BRAZILE: I think -- my own personal view is that the advice not to campaign hard in Tennessee. And that's one of the reasons why he's down there in Tennessee now campaigning like hell.

CARVILLE: Let's say this...


NOVAK: Now Donna Brazile, the vice president, former vice president...


NOVAK: ... really attacked the president on the war.

Now, most of the other leading Democrats: Tom Daschle, Dick Gephardt, John Edwards, who else -- Joe Lieberman, his running mate have said, we support the president on the war.

Why -- do you think that's smart for something where most of the American people approve of the president to really pound him on it?

BRAZILE: Well let me tell you: It was Al Gore who came out last year out of silence and said, you know, George Bush is my commander- in-chief. He helped to rally this country.


BRAZILE: It was Al Gore in February who laid out a very comprehensive foreign policy and talked about Bush leadership on the war on terrorism and praised the president.

I think the vice president made it very clear -- the former vice president -- made it very clear that Karl Rove and the Republicans have used this as a wedge issue, and it's absolutely wrong that we politicize the war on terrorism.

BLACK: He came out and criticized President Bush that we have not caught bin Laden.

Let me tell you what: Bin Laden was handed to Clinton and Gore on a silver platter in 1996 by Sudan and they turned it down.

CARVILLE: That's not true.


CARVILLE: That's mythology.


CARVILLE: Charlie, don't start that because we know that he -- the president tried to get...


BLACK: Clinton wouldn't even accept...


CARVILLE: Charlie...


CARVILLE: ... I'm not -- I'm not -- I don't have to listen to this. You know the facts as well as I do...


CARVILLE: You know what, you guys don't want me -- you don't want me to talk -- I'm going to finish by saying again, would you -- the reason you can't stand it is -- you won't let me say it because you know the truth. And you know the truth is that he tried to get the Saudis to take him, that we didn't have a case against him, and this is just all a goofy right wing talk radio, cable TV garbage...


CARVILLE: ... and everybody that knows this knows that Bill Clinton did 10 times a better job with terrorist than this administration.

Tell me what's going right...


CARVILLE: What is...


CARVILLE: What is...


CARVILLE: Tell me something right. Give me something nice to say about Bush's conduct and the war.

BLACK: Has "The Washington Post"...

CARVILLE: Tell me...

BLACK: ... joined the right wing conspiracy?


BLACK: They're the ones yesterday...


BLACK: ... they're the ones yesterday who documented that Clinton could have had bin Laden... CARVILLE: He couldn't...

NOVAK: James, let him talk.

BLACK: ... from Sudan.


NOVAK: No, he has a right to talk.


BLACK: Hey, the Taliban...


BLACK: Let's just talk about part of it. The Taliban is gone. Al Qaeda is on the run.


BLACK: Musharraf, who ought to know, said today that bin Laden is probably dead.

NOVAK: Right.

BLACK: If not, we will get him. We'll get the rest of al Qaeda. We have a worldwide alliance of over 60 countries that are cooperating against terror, cutting off funds.

NOVAK: Right.

BLACK: We're training people where al Qaeda is and other countries to get him. It'll take time, like the president said in the beginning.

But at least he's doing it. Your guys did nothing for eight years.

CARVILLE: What are you talking about?

BRAZILE: That's not...


CARVILLE: You don't know what -- Charlie, why did -- why did General Perry (ph) say the Clinton people were way more focused on terrorism than the Bush people? Why was it reported that they never had a meeting on terrorism? That's just ridiculous.


BLACK: ... was meeting with the CIA director for two years.


CARVILLE: Woolsey couldn't even get in to see...


CARVILLE: ... Clinton to talk about it.


CARVILLE: ... do you really think the Taliban is gone?

BLACK: The Taliban is gone.


BLACK: They are gone.


BLACK: Who's in charge? A democratic government is in charge in Afghanistan. Watch CNN.


CARVILLE: Do believe...


NOVAK: All right. That's enough for now.

Our guests will return in just a minute. We'll ask them about today's retirement of Congressman J.C. Watts and why the Republican Party just cannot recruit African Americans.

And we'll get a live update on our breaking news story. There's been a plane collision over the air in Southern Germany.


NOVAK: Colin Powell, Condoleezza Rice and Education Secretary Rod Paige have high-profile jobs in the Bush administration. But J.C. Watts, the Republican Party's only African American member of the House, is about to retire.

What's the problem for the GOP?

In the CROSSFIRE are former Gore campaign manager Donna Brazile and Republican consultant Charles Black -- James.

CARVILLE: Well, J.C. Watts is obviously a well-reared young man, has some fine parents.

And let's see what J.C. Watts' father had to say about Republicans and the Republican Party please.


I think what Mr. Watts said... (BEGIN VIDEO CLIP)

WATTS: I've been in public service now for 12 years, four years on a state level, it will eight on a federal level after this term ends. And so my family has supported me for 12 years, and I think it's time that I pay a little more attention to them and do a few more parent/teacher conferences and dance recitals and little league baseball games.


CARVILLE: This is what his father said.

NOVAK: No, that's what he said.

CARVILLE: That's what he said. This is...

NOVAK: Yes, a little mixed up.

CARVILLE: A little mixed up.

NOVAK: All right.

CARVILLE: There we go: "A black man voting for the Republicans makes about as much sense as a chicken voting for Colonel Sanders."

I guess Bill Clinton smiled when he said that.

What do you think about a man's own father saying a black man voting for a Republican makes as much sense as a chicken voting for Colonel Sanders?

BLACK: Well I guess J.C. would have won bigger if he got his father to vote for him. I didn't realize that he hadn't.

Listen, we Republicans understand that we have a very, very hard time attracting votes in the African American community. That does not discourage us. We will campaign in the African American community.

We will continue to recruit great leaders like J.C. Watts, who helped our party understand issues of importance to African-Americans from home ownership to education reform, school choice, which is very popular in the African-American community, which now the Supreme Court has basically legalized.

J.C. Was a great Republican leader before he came to Congress. He'll continue to be a leader and make sure that we campaign...


CARVILLE: ... Colonel Sanders...


BRAZIL: Absolutely. This is a major embarrassment to the Republican Party at a time that they're out there trying to improve -- and that's the word Karl Rove used in his presentation there, standing with African Americans.

The highest elected African American official in the country is leaving the Congress. Why?

Because I believe the White House mishandled and disrespected J.C. Watts when he went to them and asked for support for the Crusader artillery system, which was being built in his district. He also complained from time, and time again, that he wasn't at the table when major public policy decisions were being made by the Republican Party.

So that raises a big question of whether or not this whole, you know, tent idea is just baloney and lip service.


NOVAK: Wait a minute...


NOVAK: Wait a minute, Charlie. I want to get in on this. Donna Brazile, you're not -- I can't believe that you're sitting there and making this a racial issue.

We ran that little side...

BRAZILE: I didn't use the word "race."

NOVAK: Just a minute -- yes you are.



BRAZILE: ... he's on the Armed Services...


BRAZILE: ... Bob, he's on the Armed Services Committee.

NOVAK: Wait a minute -- wait a minute...

BRAZILE: He's one of the highest ranking -- he's a leader...


NOVAK: You can't -- you can't answer my question until I ask it.


BRAZILE: Is that a race issue when you say that he's on the Armed Services Committee and you have the president and the vice president of the United States ignoring...

NOVAK: You're saying... BRAZILE: ... his request to save this system, which will help him get votes.

NOVAK: Can I ask...


NOVAK: Can I ask my question now without being interrupted please?

BRAZILE: Yes sir.

NOVAK: It's your show.

They're saying -- you're saying they disrespected J.C. Watts.

BRAZILE: Absolutely.

NOVAK: Just -- let me just finish my question, and then you can barge in.

CARVILLE: You're kind of an uppity black woman, aren't you?


NOVAK: Well she's not very polite.


BRAZILE: And I'm not going to stop eating fried chicken, and I'm not going to stop voting Democratic either, James.

CARVILLE: Let him ask his question.

BRAZILE: All right. Sorry.

NOVAK: You're saying they disrespected him. I know that code language. You're saying the he didn't get the word -- now the Senator -- Senator Inhofe from Oklahoma, Republican, is upset about the Crusader decision, who is white. The white congressman -- that's an Oklahoma question.

How can you dare raise this and imply that he was not given that information because he was black? How can you do that?

BRAZILE: I'm not saying...

NOVAK: You're implying that.

BRAZILE: I'm implying that this is a leader. When someone is a part of your leadership, you bring them to the table and you work out a compromise, and you give them what they need.

I mean, if he's in the room and he's part of the decision-making apparatus, then if he comes in and says I need this -- you know everybody likes to bring home a little pork. The guy couldn't bring home no pork. Now what's up with that?


NOVAK: Go ahead Charlie.

BLACK: Can I just say, as somebody who's been a friend of J.C. Watts for over 10 years, long before he came to Congress, that that's not why he's leaving Congress.

It would disrespect him not to take him at his word when he says that's he's a family man, he's got to put his family first. He's got three children still at home. His family still lives in Oklahoma.

He's a courageous man who's been a trailblazer in a number of fields, and he'll continue to be a leader for the Republican Party.

Listen, he was one of the three co-chairs of President Bush's campaign. He has a seat at the table anytime he wants it.

BRAZILE: Well, it looked like he's lost a seat.

But let me just say something. J.C. Watts was the only person in the Republican leadership that members of the Congressional Black Caucus could go to when they wanted to put forth the idea of an African-American museum, when they wanted to talk about historical black colleges and universities, saving black farms.

Now they won't have anybody to go to on the Republican leadership...


BRAZILE: ... because there's nobody there with a conscience who will listen to African-Americans in Congress.


BRAZILE: And that's a problem -- and that is a problem for the Republican Party...


BRAZILE: ... African-American voters in the future.

NOVAK: Just let me say that J.C. Watts is an American, a conservative Republican, and did not join the divisive Congressional Black Caucus. You know that. Thank you very much.

BRAZILE: But he did support...


BRAZILE: He did support members of the Congressional Black Caucus.



NOVAK: Thank you.


NOVAK: Next, CNN will bring you a live update with the latest on the midair collision of two jetliners.

Also: the Democrats search the corporate morgue looking for a political silver lining.

And later: making money go up in smoke.


NOVAK: During a speech in Kansas today, Vice President Dick Cheney reminded U.S. corporate leaders they have a responsibility to be honest and above-board in all their dealings and to be truthful in reporting their profits and losses.

He may get a chance to practice what he's preaching. Over the weekend, the chairman of the Securities and Exchange Commission said no one will get a pass in the government's investigation of Halliburton, the oil services company whose CEO in the 1990s was Dick Cheney. The Democrats are searching desperately for an issue, and claim they have one in corporate greed.

Next in the CROSSFIRE: Michigan Democratic Congressman John Conyers and California Republican Congressman David Dreier -- James.

CARVILLE: Thank you Bob.

Congressman Dreier, thank you for being here; thank you, sir. We're doing some polls here. And let's look at the polls about people's attitudes toward this. Republicans in Congress more interested in large corporations, 62 percent, ordinary Americans, 30 percent. I won't -- because you've been on this show so much and you're a nice guy, tell us about the record of this Republican Congress -- measures, specific measures that you all have taken to ensure that corporations are responsible in the way you've cracked down on them.

DAVID DREIER, CALIFORNIA REPUBLICAN CONGRESSMAN: Thanks for a great opportunity. You know the this legislation called CAARTER, the Corporate Accountability, Auditing and Responsibility Transparency Act?


DREIER: It's one of the most sweeping reforms that will encourage corporate accountability and greater transparency. We passed it through the House of Representatives, and we're hoping very much we'll be able to see the Senate measure... CARVILLE: When did you pass that?

DREIER: Just probably about two months ago.

CARVILLE: I'm talking about before all this happened. I'm talking about before...

DREIER: You didn't say that. Who was president in 1994? Who was president in 1994, James?

CARVILLE: What happened was the president made a proposal to separate -- the accounting firms couldn't audit and give consulting. You guys beat it back so hard, you don't know what happened. This president made a thing that you had to disclose commodity trades. You guys beat it back. President Bush made a thing where you couldn't put -- the Democrats made a thing where you couldn't put more than 10 percent in...

DREIER: The fact of the matter is, James, this problem has come to the forefront and we're very proud of this legislation that we have passed. I will tell you...

CARVILLE: You passed this after the chicken got out of the coop.

DREIER: And you know what? It was very important for us to make sure that we increased accountability, increased responsibility and transparency. That's exactly what we've done. This stuff is -- you act as if this kind of corporate actions has taken place because of something in the United States Congress did or didn't do. That's not the case. And frankly, we want to encourage -- we have in place now laws that exist -- we want to strengthen the supervisory ability of the Securities and Exchange Commission. That's our goal here.

NOVAK: Congressman Conyers, people who have been very tough on business for years want to have more tightening of regulation. And I want to -- speaking of polls, James, you generally give a poll from CNN/"USA Today"/Gallup just taken: Government regulation, do we need more -- this is the American people. Fifty-seven percent think we need new law; 69 percent think we need to enforce existing laws more strictly. You don't need more restrictions to hamper business, do you?

JOHN CONYERS (D), MICHIGAN: I think we need more oversight. We need more prosecutions. After all, the president has said...

NOVAK: Totally agree.

CONYERS: People have to go to jail. The attorney general has said that. Mr. Pitt has said that. And we need to make sure that there isn't this dealing and associations in the legislation that the Republicans don't want to look at.

NOVAK: What you talking about?

CONYERS: I'm talking about the substitutes -- I'm sorry to say this here... NOVAK: Go ahead.

CONYERS: But the Republicans -- and this may be news to you -- big business is mostly Republican.

DREIER: Oh, come on. More soft money comes from big business...

CONYERS: Oh, I see. This is new. This is real new stuff. Most of the business -- this is going to be shocking.

NOVAK: Congressman Conyers, what are you saying?

CONYERS: This is going to be shocking. Sarcasm...

NOVAK: What are you trying to say?

CONYERS: Sarcasm aside, most of the people in big business are Republicans.

DREIER: So what?

CONYERS: So nothing. That doesn't mean a thing. That's why when the vice president met with the oil people and didn't want to tell us what they were doing, it didn't mean a thing. Didn't mean a thing.

CARVILLE: John, how many environmental groups did the vice president meet with when he was put in his position?

DREIER: He's met with a number of environmental groups. He's met with environmental groups and I'll tell you, what we've got John engaging in...

CONYERS: Name one. Name one.

DREIER: Let me just say this, Bob said that maybe I could respond to John. The late Senator Paul Tsongas, great Democrat, ran for president against your friend Bill Clinton, he had the great line, he said the problem with my Democratic party is they love employees but they hate employers. We want to help the ordinary working guy and we also want to make sure that we encourage job creation.

CONYERS: That's what you said with labor laws and collective bargaining, right?

DREIER: What you're advocating -- we support doing everything for the working men and women. Let me tell you, many of those labor laws undermine the opportunity for the working man and woman to succeed. I believe -- I believe that we need to do everything we can to encourage economic growth, but we need to have more responsibility, accountability and transparency. That is exactly what President Bush has been saying, James.

CONYERS: Why won't the Secretary of Army come clean with his relationships?

DREIER: He has come lean with that. He's come forward. CONYERS: Would you agree with me and maybe next week we could ask Mr. Pitt to recuse himself because of his past activities with the accountants?

DREIER: Well, wait a second. The chairman of the Securities and Exchange Commission...

NOVAK: You're saying because he was a businessman, he should recuse himself? Who do you want for the job?

DREIER: This man is a rock. He's been on the job for 11 months.

CONYERS: He was not -- it wasn't that he was a businessman. Most of the Republicans are businessmen. What...

DREIER: There are even Democrats that are businessmen, too.

CONYERS: A few. But the problem here is -- and I want you to think about this and maybe study my request to ask him to step aside, because he represented the accountants -- he wasn't a businessman.

DREIER: John, are you -- What is it that he said over the weekend? He made it very clear that Halliburton -- he said no one is going to be free on this thing. He said...

CONYERS: What has he done before that? Everybody is for jail time for CEOs that are crooked now. Do you know anybody that's not?

DREIER: You'd like to paint CEOs with a broad brush. I will tell you that I've talked to CEOs who are outraged over this. The corrupt ones need -- we need to let it --

CARVILLE: Let's get an answer here. You guys beat back President Clinton's proposal to say that these accounting firms couldn't do consulting at the same time.


CONYERS: It's true; it's true.

CARVILLE: Harvey Pitt, do you think that's a good idea or bad idea to say you can't consult and audit at the same time?

DREIER: I think it is a good idea.

CARVILLE: To do both?

DREIER: I think it's a good -- No, I think it's a good idea that we have the separation. I think it is a good idea to have the separation. Arthur Levitt talked about it...

CARVILLE: Let's get -- could we please get the Dreier-Conyers bill to separate this?

DREIER: James...

CARVILLE: Republican, Democrat, black, white, coming together to bring corporate responsibility.

DREIER: Congressman Conyers...

NOVAK: Right in line behind you, James.

This weekend we had the chairman of the Financial Services Committee, Congressman Oxley of Ohio, very distinguished American, we asked him if they need more regulation. He gave one of the best answers I've ever heard. Let's listen to it.


MICHAEL OXLEY (R), FINANCIAL SERVICES CHAIRMAN: I think frankly the private sector and the private markets really discipline better than -- if you look at Enron, basically deep trouble, Arthur Andersen is practically gone, WorldCom could be next, the marketplace is a very strong disciplinary force.


NOVAK: Does the marketplace, in time, really weed out these malefactors?

CONYERS: The marketplace in time can't send the malefactors to jail.

NOVAK: We got laws to deal with that.

DREIER: We have laws to deal with that now. We don't need new laws to deal with the criminal behavior that is taking place now.

CONYERS: Oh, yes, we do. Paul Sarbanes has very a modest bill...

DREIER: That's part of the CAARTER bill. The one that we're working...

CONYERS: Are you supporting the Sarbanes bill?

DREIER: We're working -- I'm not a senator. I'm not a senator. I voted for the CAARTER bill in the House of Representatives.

CONYERS: Wait a minute. You voted against the motion to recommit that the Democrats put forward, and you voted against it. You voted against it.

DREIER: But you know what? We're going to have an opportunity, John, in Congress to deal with both of those issues. We'll have an opportunity to come together.

CARVILLE: We have a new beginning here, a coalition is building. Right here, history is being made.

NOVAK: Don't count on it. CARVILLE: This handshake, right here, where all of America can be proud that you're watching CROSSFIRE, where corporate accountability begins.

NOVAK: All right. Coming up, we'll have the latest details about a mid-air plane collision.

And once upon a time, cigarettes cost a quarter a pack. Not anymore. Especially not in New York. Next, the high price of political correctness. Thank you, Congressman Conyers, Congressman Dreier.


CARVILLE: For years cigarettes have carried a warning that smoking is hazardous to your health. In New York, they'll need an extra one -- it's dangerous -- cigarettes are hazardous to your wallet.

The city is raising cigarettes taxes eight cents a pack, to $1.50. And that goes on top of what's already the nation's highest tax on cigarettes, another $1.50 a pack. According to the "New York Times," new taxes mean some brands of cigarettes will cost $7 a pack. Will smokers pay it, quit lighting up, or start their own black market?

Let's begin with Dr. Joycelyn Elders, she's a former United States surgeon general, and she joins us from Little Rock, and this man in Washington is Stephen Moore of the Cato Institute -- Bob.

NOVAK: Dr. Elders, yesterday morning in New York City, Mayor Bloomberg signed into law this humongous cigarette tax increase. And he said something that I thought was very peculiar and let's listen to Mayor Bloomberg.


MICHAEL BLOOMBERG, NYC MAYOR: This may be most the important measure my administration takes to save people's lives.


NOVAK: Now, the only way this measure can save people's lives is because of the very high tax rates, people stop smoking cigarettes. You are a sophisticated woman of the world, Dr. Elders. Do you really believe that's going to happen?

DR. JOYCELYN ELDERS, FORMER U.S. SURGEON GENERAL: You know, I think we know that certainly with adolescents and young people that as we increase the cost of cigarettes, we decrease smoking in teenagers. I don't know about adults. But I think increasing cigarette costs to $7 a pack is -- that's what it costs the United States already for smoking. It starts to increase health care costs, increase loss related to loss from work, and years of potential lives lost that it costs $7.18 per pack already. So I think the people that smoke should pay. NOVAK: Now Dr. Elders, you've really added a confusing proposal. If people smoking less because of this tax, how does it figure that people -- and it is all in the papers in New York, that this big, huge tax is going to save the fiscal situation of New York City. And in fact, you have said yourself that this provides money to take care of people who have health care problems because of tobacco. You can't have it both ways. You can't have people stopping smoking and increasing taxes. Isn't this a con game that's being played by the people who want this big tax?

ELDERS: Well, obviously what we really want to do, more than anything else, is we want people to stop smoking. You know, lung cancer is a man-made disease, related to cigarette smoking; 450,000 people each year lose their lives related to cigarette smoking. So we aren't trying to just raise money. We've already lost the money on people that are already sick. And we didn't collect it. We made big profits for the cigarette industry.

NOVAK: But you say it's going to raise money to take care of health care costs.

ELDERS: No. That's not what I said. I said that this tax -- it could, but what we want them to do is stop smoking so we don't have that extra $50 billion worth of health care costs.

CARVILLE: Mr. Moore, if you were a state legislator, what would you say would be the ideal tax on a pack of cigarettes?

STEPHEN MOORE, CATO INSTITUTE: Well, the tax is -- raising it to $2 a pack ..

CARVILLE: Give us a number.

MOORE: Oh, I don't know; 25 cents a pack.

CARVILLE: But you would agree...

MOORE: It should be taxed but the problem is, what is going to happen in New York City is nobody is going to buy cigarettes there. Now, that doesn't mean, by the way, Bob, that people aren't going smoke. Guess what? They're going to find other places to get them.

NOVAK: You can get cigarettes on the Internet for free. No taxes.

CARVILLE: You can get a lot of things on the Internet; that don't mean that it's legal. You can do -- What about a national $7? Would you be for a national $7...

MOORE: No, I wouldn't, because the reason is that the liberals are basically trying to tax cigarettes out of existence.

CARVILLE: Exactly. Exactly. You hit it! Guilty! Guilty! They're trying to stop people from smoking cigarettes. What is wrong with that? MOORE: That's like you and Joycelyn Elders, during the Clinton Administration, said it's safe to put anything in your mouth except for a cigarette. And the fact of the matter is, look, my belief is -- my belief is that cigarettes should be taxed, but when you raise taxes as high as they have in states like New York, they are not going to raise revenue. They'll lose revenue.

CARVILLE: Great. What would you rather have, more revenue or more teenagers smoking? What do you think? What do you think is the thing people are worried about? If you lose revenue and you stop teenagers from smoking, isn't that good?

MOORE: What I'm saying to Mayor Bloomberg is, this is a dysfunctional policy, it is not going to prevent people from smoking; they'll get cigarettes elsewhere. And it's not going to raise revenue, because they're going to buy them out of the state or over the Internet.

NOVAK: Dr. Elders, there is another contradiction that I would like you to dwell upon, please. You talk a lot about obesity. There are a lot of things that worry you, but one of the things that worries you is obesity. Now let me give you a little personal testimony. When I was 32, I was exactly the same weight that I was when I was a freshman in high school. At the age of 32, I stopped -- I was a chain smoker, I stopped smoking and I'm a fat guy now. So isn't smoking really a good preventer of obesity?

ELDERS: Well, you know, I've never smoked cigarettes and I'm a fat girl -- you know, a fat lady. But...

NOVAK: That's the problem. That's what I'm trying to tell you.

ELDERS: But I don't -- now the cigarette industry has convinced us that it would make a slim and sexy...

NOVAK: It does!

ELDERS: ... and sophisticated, sociable, all of those things, is what the cigarette industry has sold our teenagers, and they got them addicted. Eighty percent of the people who smoke became addicted as teenagers.

CARVILLE: This may be the best, most novel argument ever offered on television. He's saying it's better to be dead than it is to be fat. I mean, what is...

MOORE: Isn't it true that, James, that -- you see liberals now saying they want to tax everything. Not just cigarettes but now the new thing is French fries. Hamburgers...

CARVILLE: I've never heard a Democratic, liberal Congressman or anything else say they want to tax French fries out of existence.

MOORE: Anything that is bad for you, we're going to tax it out of existence. That's the new line.

CARVILLE: I think they're right. I think people are trying to tax them out of existence. Good riddance.

NOVAK: Well, I'm not saying it's going to be good, better than -- I'm saying that she's the one who's worried about obesity. I'm not. All right. The last question to you is, if you don't like cigarettes, if you think they're really bad, why don't you just do it straight: go to Congress and say, let's have prohibition. No more cigarettes. Why not?

ELDERS: Well, now, I think that that would create a black market. If we say prohibition. But if we're saying we're going to increase them to $7, that says if you want to buy them, pay the $7 and you can get them. I think many teenagers would never start smoking.

MOORE: There already is a black market in New York on cigarettes. It's one of the biggest in...

NOVAK: That has to be the last word. Thank you very much, Steve Moore. Thank you, Joycelyn Elders.

ELDERS: Thank you.

NOVAK: Still ahead, we'll update you on the midair collision of two airplanes in southern Germany; plus one of our viewers has e- mailed a question to all Al Gore fans. All seven of them. Stay tuned for "FireBack."

ANNOUNCER: If you'd like to fire back at CROSSFIRE, e-mail us at Make sure to include your name and home town.


NOVAK: Time for "FireBack," when viewers "FireBack" at us.

The first is from Patrick of Mequon, Wisconsin.

He asks: "Why does Al Gore still speak? Al Gore is not from this world, and I do not know why people love him so much. Will someone please name one thing that he actually DID, that made a positive difference in the country in the eight years he was in office."

Yes, I'll name one thing. He left office.

CARVILLE: He did many good things. He did governmental reorganization, he passed a deciding vote on the most successful piece of economic legislation in the last 50 year. He has a distinguished man, a great American, he wasn't that good of a political candidate. This is Rob Russell of Pittsburgh, California.

Let's see what Rob's got to say: "I have been depressed for several years. Your program creates so much energy, that I temporarily feel like I am normal again. Is it considered good therapy to always argue?"

Only if you have sex after. But not with you, Bob.

NOVAK: I would say, James, you cannot practice psychiatry without a license anymore.

CARVILLE: We are the Viagra of television.

NOVAK: Next question. Question...

UNIDENTIFIED MALE: Yes, during the campaign...

NOVAK: Give me your name and town.

UNIDENTIFIED MALE: My name's John Tulson (ph), I'm from Minnetonka, Minnesota. And during the campaign two years ago, Al Gore tried to stay away from President Clinton. And so with Gore possibly back in the race, how will Clinton affect his success?

NOVAK: Well, I would say since Al Gore always does things in a half backwards way, since he stayed away from him when he should have embraced him, he'll probably embrace him in the next campaign, when he should stay away from him.

CARVILLE: I think that the vice president has -- I think he's been an incredible public servant with a lot to say. I don't think attacking his consultants is one of the things that the country wants to hear about, and I look forward to hearing what he's got to say in the future, and let's see what happens. He might be the first man since President Clinton to actually win two presidential elections in a row.

NOVAK: Question.

UNIDENTIFIED MALE: My name is Andrew Cullen (ph) from Detroit, Michigan. I'm an incoming freshman here at George Washington. I don't smoke, and I really enjoy French fries and this legislation -- this legislation is clearly designed to cut down the number of American smokers and I'm wondering, I think that's sort of a violation of our right to make our own health decisions. I think the government should know their role. How do you feel guys about that?

NOVAK: I agree with you a hundred percent. I'll tell you one thing else, that -- this is something that ought to appeal to James -- the rich people whether it's seven bucks or 70 bucks, doesn't matter, they can afford their cigarettes. Most of the people that smoke now are lower-income people, and this is really very hard on them. It takes away a little pleasure they have.

CARVILLE: But the reason that they want people to stop smoking is the more teenagers that smoke, the sooner they'll die and the more money they'll have for their big tax cut for the wealthy. And that's the whole thing. They want all you teenagers -- we need more teenagers smoking out there, that's the conservative message. I'm James Carville.

NOVAK: Maybe the conservative message is having a little freedom. And you wouldn't appreciate that. Great. I'm Robert Novak. I didn't know it was the end. Join us again tomorrow night for another edition of CROSSFIRE and stay tuned tonight for the latest in the plane crash over Germany. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT

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