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CNN CROSSFIRE

Labor Pains Over Homeland Security; Who's to Blame For Obesity?

Aired July 26, 2002 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala. On the right, Robert Novak and Tucker Carlson. In the CROSSFIRE tonight...

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In a time of war, it's the wrong time to weaken the president's ability to protect the American people.

(END VIDEO CLIP)

ANNOUNCER: Labor pains over homeland security. What the hill is going on?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Potentially, tens of thousands of employees could be prevented from being members of the union.

(END VIDEO CLIP)

ANNOUNCER: Economic second guessing.

(BEGIN VIDEO CLIP)

AL GORE, FORMER VICE PRESIDENT: The best thing they could do is to completely scrap their entire economic plan.

(END VIDEO CLIP)

ANNOUNCER: And the criticism isn't only from the left.

Tonight, another former presidential candidate sounds an alarm about corporate reform.

And who's to blame for obesity? The people who sell fattening food, or the ones who eat it?

Tonight on CROSSFIRE. From the George Washington University, Paul Begala and Robert Novak.

ROBERT NOVAK, CO-HOST: Welcome to CROSSFIRE. Tonight, Steve Forbes takes a swing at something that had only three opponents on Capitol Hill. Also, will some of the country's top fast food chains get fried by new lawsuits?

But first, our daily look at some of the most tempting political stories on anyone's menu -- that CROSSFIRE political alert.

With the lawmakers' August recess just hours away, the House of Representatives suddenly looks like a slot machine that hit the jackpot. Mostly lemons. New legislation is tumbling out of conference committees and spilling onto the House floor for final passage. Before the night's over, a Department of Homeland Security, bankruptcy reform and fast track trade authority should be in the outbox along with corporate reform and a special commission to investigate September 11.

Perhaps, the lawmakers should take more frequent vacations. Not only would they get their work done, the best part is they'd spend less time in session thinking up ways to waste the taxpayers' money.

PAUL BEGALA, CO-HOST: It's rare that I agree with you. But I want to look at the fine print of these bills. I am worried about a lot of them, and I think too much is being given right now.

NOVAK: I like the Texas legislature's 30-day session.

BEGALA: That's what they need to -- every other year, even.

But like Bob said, looks like Congress is about to come to agreement on a lot of bills. One of them, a new bankruptcy bill. And guess what? It screws little people and protects big business. The bill would make it harder for consumers to seek bankruptcy protection and allow big credit card companies to prey on the vulnerable. Even as it seems more power for big corporations over small better, so the Bush administration has no proposal at all to compensate small investors who are ripped off by big companies, like Enron and WorldCom. After all, if they can't help big corporations rip off the little guy, what's the fun in being a Republican?

NOVAK: That's not a bad idea. You know, I admit it's a pretty good idea to crack down on the deadbeats. That's not too bad either.

BEGALA: Yeah, but they're cracking down on the little guy.

NOVAK: Anthony Williams is the elected mayor of Washington, D.C. He isn't exactly popular and isn't exactly confident, but here in the District of Columbia, who cares? Nobody. Not enough for anybody to run against him, either in the Democratic primary or in the general election. But it turns out that the Williams campaign couldn't honestly collect the 2,000 voter signatures, only 2,000 needed to qualify for the ballot. They just made up the names. Now you know -- now you know why I, as a D.C. resident, opposed home rule and today shutter at the very thought of statehood for the District of Columbia.

BEGALA: I got an idea. Novak for mayor. I'll be your campaign manager. The slogan is, "I like taxation without representation."

NOVAK: If I win, I'll demand a recount.

BEGALA: Well, with a second drill attempting to chew through 247 feet of earth and with help from the U.S. Navy, rescue workers in Pennsylvania are continuing their around-the-clock effort to save nine minors who have been trapped since Wednesday. This is another reminder of how dangerous a job mining is. Forty-two coal minors were killed last year. So it's hard to understand why President Bush's budget includes a deep cut in the mine safety and health administration, some of the very folks who are in Pennsylvania racing against time tonight. Well, I guess when you give away $4 trillion to the hyper-rich, you've got to make cuts somewhere.

NOVAK: Paul, you're just amazing. You can put an anti-Bush spin on every single story.

BEGALA: This is the safety of men's lives, and he shouldn't be cutting that.

NOVAK: Oh, those Ivy Leaguers. George W. Bush's Yale versus Don Rumsfeld's Princeton. They don't do very well at football or any sport these days. And to tell the truth, their level of education is vastly overrated. But the Ivy's, it seems, have gotten really good at dirty tricks. Yale complains that admissions officers from Princeton broke into Yale's online admissions notification system and spied on how the opposition was doing. The FBI is investigating. Funny, I thought the feds had some more serious business at hand these days.

BEGALA: See, if the University of Texas would be stealing something important, like Texas A&M's play book, that's what matters. Who cares about the admissions? Football!

According to the "Raleigh News and Observer," President Bush yesterday attacked the parents of a baby who was permanently maimed by medical malpractice. A North Carolina jury had awarded $23 million to a mom and dad whose baby was severely brain damaged and ultimately died because of a medical error. But during a speech yesterday, our president called those parents winners of the, quote, "litigation lottery," unquote, and called for capping all such damages at $250,000. Christopher Griffin (ph), the baby's daddy, was stunned by the presidential attack.

"What I heard," he said, "was in some ways we are considered to be lottery winners. Every time I go to my daughter's grave, it's hard to feel that way." Shame on Bush.

NOVAK: This is part of the whole trial lawyers campaign for the Democratic Party, so you put on your mourning face, but we know it's all about politics.

BEGALA: Shame on Bush. Shame on him.

Well, guess who went up to Capitol Hill a couple hours ago, speaking of our president? He motorcade up to our Capitol to try to figure out how a bill becomes a law. Well, the answer, Mr. President, it's a three-step process. Compromise, compromise, and then compromise. The president is trying to get his way on at least three bills -- homeland security, fast-track trade promotion authority and a change in the bankruptcy code. Members of Congress have their own ideas about how these bills should look, but compromise is in the air, kind of like smog. Are some lawmakers or even President Bush himself compromising their principals? What the hill is going on up there?

Please welcome to tell us, Democratic consultant Peter Fenn and Republican consultant Mike Collins, former spokesmen for the Republican National Committee.

Peter, thank you, sir. Mike, thanks. Good to see you.

NOVAK: Mr. Fenn, I don't know if you watched the House of Representatives today, but it was a really interesting exercise in how a bill becomes a law, because what we had there was the organized labor saying, we don't care about fighting terrorism, we don't care about saving the homeland, what we want to make sure is that these people, when they get in these new departments, they weren't labor union people before when they worked in the other agencies, we want to get them in labor unions. Aren't you ashamed of that?

PETER FENN, DEMOCRATIC CONSULTANT: Bob, when you are wrong, you are really wrong. This is not or should not be a union-busting bill. Let me tell you, this is the president of the United States that went to New York City and stood there with firefighters and with police, with public employee union members, and now what does he want to do? He wants to stick it to those same public employee union members. The fact that he is making this into a union-busting bill is disgraceful, and let's just hope -- let's just hope that the House of Representatives passes this the way it should be passed, and that he doesn't play games with his silly veto.

NOVAK: Peter, as usual, you are behind the curve, because they have already acted, they have...

FENN: Well, I'm talking about the Senate bill. Go ahead.

NOVAK: Should I talk while you interrupt?

FENN: It's your show, I guess.

NOVAK: Yes, thank you. They have already passed the Shays amendment, which says that labor union -- the labor union can't co-opt all these people. And let me tell you why. Ari Fleischer, the White House spokesman explained it. And we'll put it up on the screen. Do you want to read it?

"If a Border Patrol agent is found to be intoxicated and lets a potential terrorist near the country, he or she cannot be fired without a written 30-day notice and must be paid during that notice, period."

Are you more interested in having the labor unions with their control than saving this country?

FENN: If you have a problem with somebody like that, you put them on administrative leave, you take them off the frontlines. It's very easy to do. It has been done many, many times. The key with this is he's using this as an excuse to go after public employee unions, the very people that risked their lives in New York on 9/11, and I think it's a disgrace.

BEGALA: Michael Collins, first, thank you for coming here.

MICHAEL COLLINS, REPUBLICAN CONSULTANT: Pleasure.

BEGALA: I like Ari Fleischer.

COLLINS: So do I.

BEGALA: He is a good guy, he's a decent guy. I'm proud that he's serving our country. So I won't call him a liar. I will say instead that he's fibbing. He got the facts wrong. He stood at the presidential podium and said something completely false. Title V, section 73-52 of the U.S. Code says plainly the president can fire -- or the government can -- the federal government can -- in that situation.

So our ace researcher Josh Cowan (ph) called the head of the federal government's employee's union and got this statement from Bobby Harnage.

This is what he said in response to Ari Fleischer: "Mr. Fleischer is dead wrong. If an employee was drunk on the job and allowed a terrorist into the country he could be fired immediately as a national security risk. Notwithstanding such a circumstance, under current rules an employee drunk at work could be immediately suspended from the job, and then removed entirely from the payroll."

That's Bobby Harnage, National President of the National Federation of Government Employees.

Why does the White House seem to have to falsify their arguments in order to...

COLLINS: I think the real issue here, Paul, is whether or not we're going to give the president some flexibility in a time of war.

Now what we've got here -- we're not talking about firemen and policemen -- we're talking about inspectors -- let me finish -- from the plant inspection service, first of all.

And we're talking about an effort, during a time of war, that would give the administration, during that time of war, the permission to say, OK, you're a GS-5 clerk typist, we're going to make you a filing clerk.

And we need the flexibility to do that without having to go through notice and comment periods and hearings and all the rest. And the president needs to do that. We're in a war, Paul.

BEGALA: If he wants to bust a union, he should be honest about it...

(CROSSTALK)

COLLINS: Listen, if it was union-busting, you know I wouldn't be defending it. My dad was a union organizer.

BEGALA: Here's the question: Why should a bean-counter at the Commerce Department who, while doing important work, does not risk his life, have more protections and more rights than someone in the Homeland Security Department, who is risking her life or his life to save you and me?

COLLINS: This is a typical liberal effort by your part in the House and Senate.

BEGALA: To protect the little guy? Yes, that's what we do.

(CROSSTALK)

COLLINS: ... the typical effort that if we can't put more red tape down, if we can't tie it up and eliminate flexibility, we're not going to do it.

NOVAK: The thing is that Paul looks at belonging to a labor union as a privilege. A lot of people -- the 75 percent of the people going to this department think it's a big pain to be in a labor union.

In fact, I was forced to be a member. I'm a member of a labor union right now. I was forced to be one. And, you know, a lot of people are.

Can you understand that, Peter?

FENN: You know, I think this is crazy.

Listen, the way you do it is you vote. You have a vote and you join, and the majority rules. It's a funny thing in this country; it tends to work, majority rules. I kind of like it.

But, you know -- Bob, if you don't, that's fine. But, you know, there's no deprivation...

(CROSSTALK)

FENN: This is union-busting.

COLLINS: No, it is not union-busting. That's not true and you know it...

(CROSSTALK)

BEGALA: Go ahead Peter.

FENN: What this is all about is it's a fig leaf that George Bush is wearing, and a threatened veto on something which something which he shouldn't be playing -- if you're talking about putting national security at stake, that's exactly what he's doing with this.

And, you know, he's going after unions. There was a vote today, and it failed, but it was very close. Most of Congress...

(CROSSTALK)

NOVAK: That's not close in this...

(CROSSTALK)

NOVAK: Let me turn the corner on this a little bit.

You know, I sit here night after night and I listen to Paul savage our president. I listen to people like you come on. And this is just Attack George W. Bush Week.

And so there is a new poll that came out today -- today, a brand new poll. How is Bush handling his job as president -- not, how do you like him? What do you think of him? Would you like to invite him for a barbecue dinner? No.

How is he doing his job as president?

After all this battering and the falling of the stock market: approve 69 percent, disapprove 24 percent. You guys aren't doing your job.

FENN: Hold it, hold it Bob. I think -- you didn't take -- I want to talk to the poller behind the screen, maybe like "The Wizard of Oz" here.

Sixty percent of the people don't approve of the way he's doing his job on the economy. Why is that? That's because IRAs are becoming IOUs. That's because a 401(k) is becoming a 201(k). And you know...

(CROSSTALK)

COLLINS: What bothers me is, that delights you.

FENN: No it doesn't...

COLLINS: That delights you.

(CROSSTALK)

NOVAK: We'll be back in a minute.

BEGALA: Time out guys. Time out.

NOVAK: In a minute we'll ask our guests about Al Gore's latest unbelievable affront to the president of the United States.

Also, the legal case against junk food. Would you like to super size it?

Our "Quote of the Day" is from the latest politician to join the ranks of "Saturday Night Live" guest host. You'll never guess who it is. (COMMERCIAL BREAK)

NOVAK: This week Bill Clinton and Al Gore -- remember them? -- polished up their halos and stepped in front of TV cameras to say, it's not our fault, don't blame us for the corporate greed and excess that happened while we were in charge of things, blame President Bush.

They sound like Paul Begala.

In the CROSSFIRE, Democratic Consultant Peter Fenn and Republican Consultant Mike Collins.

BEGALA: Well Mike, in fact, President Clinton, the greatest president of my lifetime, and certainly the most successful economic president since Roosevelt, did have some comments that were reported in the "New York Times." Let me read them to you.

He said: "I'm sure that some of the people in Congress that stopped a lot of the reforms that I tried to put through are probably rethinking that now. Arthur Levitt, my Securities Exchange Commissioner, tried to stop the Enron accounting issues, using the same accounting firm being consultant and accountant, the Republicans stopped it. And Harvey Pitt was the leader trying to stop us from ending those kinds of abuses. That is a matter of record."

So sayeth President Clinton, that is simply a set of facts, right? The Republicans did, led by Harvey Pitt, stop Arthur Levitt and Bill Clinton form separating accounting and consulting functions.

COLLINS: Bill Clinton vetoed that legislation.

BEGALA: What are you talking about?

COLLINS: The legislation on accounting standards. The legislation dealing with accountants was vetoed. The securities reform...

BEGALA: No, you're talking about the 1995 Public Securities Litigation Reform Act. This was a move by Harvey Pitt.

(CROSSTALK)

COLLINS: ... that legislation -- the defeat of that was led by a man by the name of Lieberman.

(CROSSTALK)

BEGALA: ... false too.

(CROSSTALK)

COLLINS: And the last time I checked, Senator Lieberman was a Democrat.

BEGALA: Are you saying again that you think President Clinton vetoed legislation separating accounting and consulting? COLLINS: No, in 1995 he vetoed securities reform legislation.

BEGALA: It didn't separate consulting and accounting, Mike. I mean, come on, if you come on our show, you've got to have your facts right.

COLLINS: Legislation separating accounting from auditing was put forth in the House and the Senate two years ago...

BEGALA: And the Republicans opposed it.

COLLINS: And the Republicans opposed...

NOVAK: This is really interesting, but let me go into something else.

You know, one of the interesting -- there's a lot of things bad happening: The stocks are down and people are feeling bad. And when things are going bad, there's nothing you like than (sic) a visit from Al Gore.

Al Gore was on the Hill the other day, and let's listen to what he said.

(BEGIN VIDEO CLIP)

AL GORE, FORMER PRESIDENTIAL CANDIDATE: The best thing they could do is to completely scrap their entire economic plan and start over again from scratch and get rid of their entire economic team and start with a brand new one tomorrow that has some common sense to get our country back on track again.

(END VIDEO CLIP)

NOVAK: That's what -- Peter, that's what we used to call talking down the economy, because what he's talking about is a tax increase.

NOVAK: You think that's a good idea?

FENN: You know, what he's talking about is the plan, economic plan that George W. Bush put in force last year with 300 bucks for all of us for this silly tax cut which has ruined this economy. And, you know, now the chickens are coming home to roost.

NOVAK: Tax cuts are bad, huh?

FENN: In this case, they were because, you know what? We went from a period where we were about to pay off the national debt in 15 years with increasing budget surpluses, to now -- and I thought, gee, it was $100 billion in June. And I thought, boy, you know, it's going to be 150 by September. It's already 170. This economy is in deep trouble because of misguided policies put forth by George W. Bush.

NOVAK: I want to ask you a straight question. If you were running this country right now...

FENN: Right.

NOVAK: ... would you go up to Capitol Hill and say, you know, things are tough, things are going down hill, what we need is more taxes?

FENN: Listen, I'd say that the economic policies are dead wrong.

NOVAK: Yes or no? Yes or no?

FENN: And I say we ought to rescind the tax cut.

(CROSSTALK)

NOVAK: A tax increase.

FENN: No, not more taxes. Just not bankrupting the country. And you know what? Now, they want to put forth the -- and I know I'm going to be out on a limb on this because you're going to really rap me, but, you know, the inheritance tax is a disaster. You guys call it is the death tax. You know what this is the death to? This is the death to Social Security and Medicare and education funding and cleaning up our environment. That's the death.

NOVAK: So, more taxes. Tax, tax, tax, tax, tax.

(CROSSTALK)

BEGALA: Let me ask you about the man who's...

FENN: And even if people are paying it, they'll want it taken away. Bill Gates...

BEGALA: Let me ask about the man who is currently staying in Al Gore's old house and Joe Lieberman's legitimate house, his name is Dick Cheney. And I can't put his picture up there because I haven't seen his picture except on a milk carton. He is in hiding because the administration is so ashamed and embarrassed of the allegations of fraud for when he ran Halliburton that he is now unable to go out and represent the president in public. Isn't it time for Dick Cheney to resign?

COLLINS: Oh...

BEGALA: He's effective? What's he doing?

COLLINS: What are you, "Doonesbury?"

BEGALA: Why not? I think "Doonesbury" has got a good point. Why not?

COLLINS: I think all we have heard...

BEGALA: What's he doing?

COLLINS: ... we just heard. And that is that one of the leading consultants and experts in your party, and I think you share this view, believes that it is not enough that people are working two jobs. It's not enough they are working six days, 12 hours a day. You people want them to work more hours so that they can pay more taxes because...

(CROSSTALK)

BEGALA: Excuse me. The news out of this is that a former spokesman for the Republican National Committee cannot and will not defend Dick Cheney, who is being investigated by the Securities and Exchange Commission. That's stunning.

(CROSSTALK)

NOVAK: All right, that's it. Time is up. It's up. We'll see you again later.

BEGALA: Thank you all very much for coming up.

NOVAK: Thank you very much, Peter Fenn.

FENN: Thank you.

BEGALA: Michael Collins...

COLLINS: Always a...

BEGALA: Thank you very much.

NOVAK: Mike Collins, thank you.

BEGALA: Good job, guys. Thank you.

NOVAK: Coming up, a man who was bribed twice to become president now has a dire warning for both ends of Pennsylvania Avenue.

And later, they made it, he ate it. Now he has filed a big, fat lawsuit.

But next, our "Quote of the Day." He's going from the Senate to "Saturday Night Live." Will you be able to tell the difference? Guess who that is?

(COMMERCIAL BREAK)

NOVAK: Janet Reno did it. So did Rudy Giuliani. Both George Bushes, Al Gore and even George McGovern. Remember him? Now Senator John McCain is going to be on NBC's "Saturday Night Live." McCain has agreed to guest host an episode of the show this October. And he gets our "Quote of the Day" for some straight talk, he says, about the job. "I'm a little nervous. Some say there's a fine line between political theater and theater. But it's going to be fun."

You know, Paul, to me, I know that John McCain is every Democrat's favorite Republican. But in the Senate, a lot of people think he is acting all the time. BEGALA: He's a great guy. This is going to be -- this takes a lot of guts. And by the way, "Saturday Night Live," they make fun of me every week. I want them to make fun of Novak. If you guys are looking, he's the one you ought to be banging on. But I would love to go on there. Put me on with McCain. It would be great. I would love it.

NOVAK: OK. We're going to have to take a break. And next, CNN's Connie Chung has an update on the Pennsylvania mine rescue effort.

And then, finally, Steve Forbes tells us why the push for corporate reform may give the whole country something much worse.

And later, the legal fight against junk food. Is it just a junk lawsuit?

(COMMERCIAL BREAK)

BEGALA: Welcome back to CROSSFIRE, coming to you live from the George Washington University here in downtown Washington, D.C. It was nearly unanimous yesterday when Congress passed a corporate reform bill, 423-3 in the House, 99-0 in the Senate, and President Bush says he will sign it as soon as he gets it. Can all those people be wrong? Well, magazine publisher and two-time presidential candidate Steve Forbes certainly thinks so. He joins us from New York City to tell us why. Mr. Forbes, thank you for joining us.

STEVE FORBES, PRES. & CEO, FORBES INC.: Good to be with you.

NOVAK: Mr. Forbes, Al Hunt and I interviewed the secretary of commerce, Don Evans, on "NOVAK, HUNT & SHIELDS" today. We taped it. The full interview will be on CNN tomorrow evening at 5:30 p.m. Eastern, repeated Sunday morning at 10:30 a.m., if you want to see it, but let's listen to what Don Evans said about CEOs.

(BEGIN VIDEO CLIP)

DON EVANS, COMMERCE SECRETARY: There have been some very disgusting scandals that have been revealed in the last several months that have hurt the character of America. And the focus always goes to the CEO, because he is the one responsible for that organization, and so there are a few that have had really hurt the character of America and hurt and tainted the reputation of thousands of good CEOs all across this land.

(END VIDEO CLIP)

NOVAK: Do you buy that, Mr. Forbes?

FORBES: I think he's right that it's a handful of CEOs that have done the wrong things, and I think everyone agrees that if you have done wrong, committed fraud, you should have to give up ill-gotten gains. You should go to jail if you've broken the law. I don't think that's the issue. What is at issue are the particular things that are being done in the name of coping with corporate fraud. It's one thing to put a CEO in jail for genuine wrong-doing; quite another, which I am afraid Washington and the courts may end up doing, and that is confusing fraud with legitimate risk-taking. When you're in business, you're always taking risks, trying new products, building new facilities, going into new areas. And most of the time, most new businesses don't succeed.

But the way this law is written, if the courts go the wrong way and the regulators go the wrong way, if you make a mistake, you can go to jail, you could be ruined financially for making a legitimate mistake. And so, I think we have got to look at the details of this thing and make sure we don't throw out, as the cliche goes, throw out the baby with the bathwater. Without risk-taking, we don't have a higher standard of living.

BEGALA: Well, I couldn't agree more that we need to punish fraud and reward risk-taking, but maybe it's all in the eye of the beholder, so let me give you a specific fact pattern, one that's been the news a lot lately. President Bush, back when he was a director of the Harken Energy Company, approved a deal in which they sold off a subsidiary, pretended it was sold off to outsiders; really, it was sold to insiders and financed by stock within the company. The SEC later ruled that that was not a legitimate transaction. Shouldn't that be fraud? Doesn't that -- hasn't that done so that investors will put more money into that failing company because of the ruse that the board with Bush on it committed? That's not risk-taking. Isn't that fraud?

FORBES: If fraud is committed, no one argues that you should pay the price for it. And by the way, the SEC and every reporter in America has been over Harken Energy more times than I can count. And I can count pretty high. And the fact of the matter is, the SEC has cleared Bush of any wrongdoing.

But the key thing here, Paul...

(CROSSTALK)

FORBES: ... going back to Bush -- instead of going back to Bush who has been examined many times and has been cleared many times, let's look at the future. The reason why the stock market has been in a slump for the last couple of months is not the fact the economy is starting to show signs of recovery; it's the worry that this recovery may be aborted because of overreaction by Washington and the courts.

Again, fraud is fraud. But if you say -- if the company takes a risk and you are able to drag them to court, as trial lawyers now do if you eat a cheeseburger, you know, you're going to have a segment where the only time you can have a pizza and a cheeseburger perhaps in the future is going outside of a building with the smokers.

NOVAK: Mr. Forbes, I try to serve -- Mr. Forbes, I try to serve as a one-man (UNINTELLIGIBLE) with my friend Paul Begala, and of course we know that -- in fact, I talked to the chief enforcement officer at the SEC, who is not a Republican, who completely cleared Mr. Bush on that Harken transaction. But we don't want to go back and just go over that again and again. The question I have to you is that you believe that this legislation will have an adverse effect on startup companies by making it apparently the -- we're going to end up with a board putting very tight restrictions on stock options, and it will be very much more difficult to get a new company started up. Isn't that a danger?

FORBES: That is a danger. There's no question that stock options have been abused. But that, you know, just because we have had unsafe cars and we have auto accidents doesn't mean we ban automobiles. And the thing with stock options is, when used legitimately, it's a great tool for attracting people who are willing to take a risk on a new company, who realize they're not going to get much on salary now, but if this thing works, they can really make it.

And with stock options, if they so-called have expensing stock options -- it sounds very, very legitimate. But how do you define what a stock is going to be worth five years down the road? You look at the stock market today when they deal with puts and call options; they fluctuate like a roller coaster. And so they do have computer models that try to do these things, but, again, they're not perfect.

So again, putting legitimate reforms on stock options such as demanding that shareholders approve stock option plans, that independent directors approve stock option plans, but don't make them, in effect, a illegal thing through accounting artifices and devices. That, again, is throwing out the baby with the bathwater.

BEGALA: Mr. Forbes, let me ask you -- I want to ask you about one of the other reforms in the bill. But first, I do want it on the record that, in fact, the Securities and Exchange Commission in writing to Bush said nothing, and this exonerates you. That was the words they used. And second, they never interviewed Bush...

FORBES: Well, the bureaucrats never say exonerate. They just dropped the case.

BEGALA: They never interviewed any officers. They never interviewed any directors. The SEC was a toothless hound in the path. That's why we need this bill.

NOVAK: Why don't you call the guy from the SEC and find out...

(CROSSTALK)

BEGALA: Why don't we release the records. That's what we need to do.

NOVAK: Why don't you call the guy from the SEC and they'll you that there was nothing wrong with that transaction.

BEGALA: Just release the records. Just release the records.

(CROSSTALK) Anyway, Mr. Forbes, one of the points in this bill -- one of the points I want to ask you about in this bill is separation of auditing and consulting. It seems to me a built-in conflict of interest. This bill will enforce a separation. Do you think it is a good idea?

FORBES: Oh, I think the concept is, again, a good idea. And I think the final bill, I haven't read the details of it, but allowing auditing firms to do things like tax filings and regulatory filings makes good sense. And, in fact, I think in the future what you may see happen is that, in the future, instead of having companies hire auditing firms where there is a built-in potential conflict of interest, why not, in effect, ask companies to take out insurance policies and have the insurers hire the auditors. So the auditors are working for those or putting their money on the line.

I think you may see that in the future. So, those kinds of reforms requiring genuinely independent directors dominating audit committees and finance committees and the like, those are good things. But, again, what you don't want to do...

BEGALA: So what is it that you're worried about? Why are you worried this is going to tank the economy then? The specifics we raised (UNINTELLIGIBLE) are good ideas. Why are you worried?

FORBES: Two specific things. One is opening up corporate life to depredations from trial lawyers, that if you take a risk and it doesn't go right, remember, most new businesses don't succeed, you end up going to court and you end up being treated in the modern equivalent of debtor's prison.

The second thing is what Bob touched on is, in effect, you throw away stock options as an instrument for start-up companies. Start-up companies can't pay people a lot of money. But they can say if this thing works, you are going to participate in the benefits of taking that risk. And if you throw that out, you are going to enormously harm venture capital in America.

NOVAK: Steve Forbes, thank you very much. We really appreciate it.

BEGALA: Thank you, Mr. Forbes.

FORBES: Thank you.

NOVAK: Coming up, your chance to "Fireback" at us. Our e-mail is full of your comments about President Bush's vacation plans.

But, next, you're waiting for it. Is a lawsuit against fast food anything more than an attempt to make a fast, fat buck?

(COMMERCIAL BREAK)

NOVAK: Some junk food junkies would like to become class action plaintiffs. They filed a lawsuit accusing four fast food chains; McDonald's, Burger King, Wendy's and Kentucky Fried Chicken; of misleading the public into buying greasy, salty, sugary food that causes obesity and disease. Is there a better excuse anywhere for limiting frivolous lawsuits?

Stepping into the CROSSFIRE is George Washington University law professor John Banzhaf.

BEGALA: Professor Banzhaf, thank you very much for joining us. Now, you're an adviser on this case, correct?

JOHN BANZHAF, G.W. UNIVERSITY LAW PROFESSOR: I am going to be advising on the case. It is actually the fifth in a series of cases designed to do to tobacco -- to do to fast food what we've been able to do with tobacco with lawsuits. The first one actually was done by students right here at George Washington University. They sued McDonald's over their french fries. You have a sample of the french fries right there. We won $12.5 million.

BEGALA: For what?

BANZHAF: Because they failed to disclose what was in their french fries, that had had beef fat in it. Now, this new suit is going a step or two further...

BEGALA: Much further.

BANZHAF: ... because we're accusing...

BEGALA: I don't care if it is beef fat or pig fat, I like them. Do you want eat some?

BANZHAF: No thanks.

BEGALA: That's good stuff, man. Now, here's my problem with it. Here's my problem with it.

BANZHAF: The serious issue is this...

BEGALA: I am all for...

BANZHAF: ... it costs an awful lot of money...

BEGALA: I can ask a question before you give an answer, Professor? Before people go running in and file lawsuits like this, such as demagogues like Bush who gave a speech yesterday attacking a family whose baby was brain damaged who had a legitimate suit. It takes every legitimate lawsuit that a little guy has against a big corporation and allows these demagogues to scream about it. That's what bothers me about it.

BANZHAF: So, you're stopping at this lawsuit?

BEGALA: Yes, sir.

BANZHAF: That encourages me. You know why?

BEGALA: Tell me why.

BANZHAF: Because when we got the smokers to sue the tobacco industry, everybody scoffed. When we got the non-smokers to sue the tobacco industry, everybody laughed. When we got the states to sue the tobacco industry, they were rolling out of their beds. We won every single damn suit, and we've just won against McDonald's. So, scoff away, gentlemen. We're winning in the courts.

NOVAK: I'll tell you something else, though, a lot of people, like me...

BANZHAF: Yes, you can applaud. It's all right.

NOVAK: They don't want to applaud that.

BANZHAF: They did. Yes, they did. Listen to them.

NOVAK: A lot of people, like I, resent that. I resent that. Now, I want to tell you why, because Caesar Barber, he's a character who was in this suit.

BANZHAF: He's the plaintiff. We call him plaintiff.

NOVAK: I'll put up on the screen a quote. He said, "they said 100 percent beef. I though they meant it was good for you. I though the food was OK." Now, if the guy is that stupid, that he thinks 100 percent beef means it is 100 percent good for you, should he be suing?

BANZHAF: Well, Bob, the whole point of modern law and warnings is we don't have to protect brilliant people like you who know all these dangers. We have to protect the people who maybe are a little bit slower. And every year, thousands of people win lawsuits for dangers which probably would be pretty obvious to somebody like you.

BEGALA: Let's take a quick poll. Who here doesn't know that this stuff is going to make you fat if you eat it? Who does know that this stuff, while delicious, right, is going to make you fat?

BANZHAF: My poll. My poll. Can anybody in the audience tell me to the nearest 50 percent, when you order a triple bacon cheeseburger, a super-sized fries and a large Coke, what percentage of calories and saturated fat from one day's healthy meal is in that one meal? Anybody, to the nearest 50 percent.

BEGALA: Who cares.

BANZHAF: They don't know.

BEGALA: All of it.

BANZHAF: No, not all of it. That's the whole point.

(CROSSTALK)

When I go into a food store and I look at a food, I can find out the calories and the fat. When I go into a fast food joint, and I see meal five, meal six, meal seven, I have no clue as to how much fat is in that.

BEGALA: It is on the wall at McDonald's.

BANZHAF: In many, it's not. And by the way...

BEGALA: I've been to a lot of McDonald's, man.

BANZHAF: ... how many of you have ever seen people who go to the back to the wall. People don't go to the back...

BEGALA: I used to work for Bill Clinton. I was at every McDonald's in America. It's on the wall.

BANZHAF: ... to the back of the wall. They line up on the wall and they want to go buy it.

NOVAK: John Banzhaf, you and I go back to the early days of CNN, when we were on...

BANZHAF: Early days of radio and television.

NOVAK: That's right, on CNN. And you were a pioneer trying to regiment against -- militate against smoking.

BANZHAF: Right.

NOVAK: Now, don't you think you have really come down on the world? This -- smoking is a really bad thing. It can really destroy you. And now you're just saying, a guy who eats a hamburger -- don't you feel you have really come down on the world for the (UNINTELLIGIBLE)?

BANZHAF: I'm not concerned about one, Bob. Smoking kills 500,000 people a year and cost the American public $140 billion. According to the U.S. Surgeon General, obesity kills 300,000 and costs us over $115 billion, most of which is paid by people like Paul, who is obviously not obese. He pays far more in taxes, far more in health insurance because a small proportion of people are obese and they inflate these costs. The whole purpose of these suits is to switch those costs from people like you, who shouldn't have to bear them...

NOVAK: Wait a minute, wait a minute, wait a minute...

BANZHAF: The both of you are going to go after me? Go ahead. Line up. I don't care.

NOVAK: You can be obese eating spaghetti and pasta at home. I mean, this is...

BANZHAF: That's right. But this guy ate out five times a week. The average American eats out 40 percent of his meals. And every study I've seen says that fast food joints are one of the reasons we suddenly have an epidemic. You know, people have been eating spaghetti for 500 years, Bob, but it's only in the last 20 years we seem to have this epidemic. And every study says it's the fast food restaurants' failure to disclose, these overwhelming ads are a major fact. Not the whole cause, but we're saying shouldn't they bear some responsibility? BEGALA: But isn't there an important distinction between nicotine -- and I salute the work on those lawsuits -- which is an addictive drug. It is a chemical that addicts you physiologically, and fat, which, while tasting and appealing and lovely, ain't addictive. It ain't an addictive chemical.

BANZHAF: Well, you're half right. The answer is it is not chemically addictive in a medical sense. However, there is growing evidence that kids who get lured into...

(CROSSTALK)

BANZHAF: Hang on a second.

NOVAK: No, but I got a quick question for you.

BANZHAF: It can be addictive in kids.

NOVAK: When are you going to go after coffee? Next?

(CROSSTALK)

BEGALA: Thank you very much for being with us.

And coming up, the defenders of Utah and South Dakota fired back at us, and some members of our audience will get a chance to do the same. So don't go away.

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

(COMMERCIAL BREAK)

BEGALA: Welcome back. Time now for "Fireback." We get a lot of e-mail on our segment of the presidential vacation. And here's what Craig Banks of (UNINTELLIGIBLE), Virginia had to say: "I know a lot of liberals get hopping mad that Bush takes so many vacations. I don't begrudge him his vacations. What bugs me is he always come back." Good point, Craig. Excellent point.

NOVAK: Another vacation question from Nancy Seagle of Barefoot Bay, Florida. "Let's debate Daschle and vacation. Not only is Bush going on vacation, but so is the House and Senate. Tired of Bush bashing? A lot more to bash in the Senate." Well, Barefoot Nancy, let me tell you, I wish the Senate and House would take even longer vacations. They're in session too long for my taste.

BEGALA: Well, passing the bankruptcy that we started the show with, I agree with that. Cheryl Henninger in Whitehall, Pennsylvania writes: "Mr. Begala, why do you and other people poke fun at the state of Utah?" See, last night I suggested that all the right-wing white guys could go and live in Utah and leave this country to us. Ms. Henninger didn't like that. She says: "People don't make fun of Utah anymore. But keep it up on showing the public what a rotten President Bush and his administration is doing."

Well, Cheryl, thank you very much. Bush, of course, is more popular in Utah than I am. That's definitely true.

NOVAK: All right, Scott Lien -- I don't know if that's his pseudonym or not -- of Boulder (ph), South Dakota says: "Mr. Novak, Paul saying Senator Daschle is the best thing to happen to South Dakota is equivalent to saying Paul Begala is the best thing to happen to Texas." Scott says: "You truly are a great one-man truth squad." I try, Scott.

I think South Dakota probably deserves Tom Daschle. I really don't think Texas deserves Paul Begala.

BEGALA: Hey, we have got a bunch of fellow Texans in the audience tonight, too, by the way.

NOVAK: Question, go ahead.

BEGALA: Yes, sir, tell us your name and your home town.

JOHN HAWKINS: John Hawkins (ph), Provo, Utah.

BEGALA: Great. That's all I need. OK, I was just kidding! Go ahead, Mr. Hawkins (ph).

HAWKINS: Well, the logical conclusion of a winning junk food case is that I can sue the makers of table salt for my high blood pressure. Shouldn't we, including smokers, take responsibility for our own actions and stop this legal nonsense?

NOVAK: Absolutely. You got it exactly right.

BEGALA: I think it's different with smokers, though, because it's an addictive chemical and the cigarette companies lied to us. They made ads -- with Ronald Reagan -- by the way, telling us how healthful smoking was.

NOVAK: Nobody told you when you were a kid that smoking was going to hurt you? Nobody told you that?

BEGALA: Well, I was a kid after the surgeon general's support of '64. No, they lied to us.

NOVAK: They told me, and I was a kid before there was a surgeon general.

(CROSSTALK)

MIKE KIATI: Yes, sir, Mike Kiati (ph), University of Minnesota in Minneapolis. Sir, stocks go up and stocks go down. It's the business cycle, stupid. Gore should stop scaring people and take an economics class.

NOVAK: You're exactly -- you're exactly right. See the thing is, the liberals in their heart really don't like the capitalist system.

BEGALA: Yes, so we liked it so little that we created 23 million new jobs under Clinton, balanced the budget, greatest surplus in history.

NOVAK: You didn't create one job.

BEGALA: You need to take some economics, young man, because Al Gore and Bill Clinton led us to the greatest economic strength in history.

Yes, sir.

RICHARD PENCHAK: Richard Penchak (ph), from Clifton, New Jersey. You guys were talking before about 401(k)s become 201(k)s, and I was wondering what you thought of a proposal a while back to take -- everybody would take part of their Social Security money and invest it individually in the stock market. It seems like a crazy idea now, looking at what's happened in the last year or so.

BEGALA: Yeah, Bush...

NOVAK: Let me tell you this, if you put your stock market money in the stock market and the Social Security money in the stock market right now, you're going to be better off 10 years from now, if you live that long.

BEGALA: Oh, yeah. What if you put it in Harken Energy or Halliburton or WorldCom or Enron? It's a disaster, and Bush is running away from it.

From the left, I'm Paul Begala. Good night for CROSSFIRE.

NOVAK: From the right, I'm Robert Novak. Join us again next time for another edition of CROSSFIRE. "CONNIE CHUNG TONIGHT" begins immediately after a CNN "News Alert."

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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