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Frist Elected Senate Majority Leader; Year in Review

Aired December 28, 2002 - 19:00   ET



I'm Kate O'Beirne with Robert Novak, Margaret Carlson, and in Austin, leaving very big shoes to fill, Mark Shields.

Joining us later will be America's favorite humorist, Mark Russell.

Senator Bill Frist, a second-term senator from Tennessee and heart surgeon, was elected Senate majority leader. An unprecedented telephone conference call of Republican senators elected Frist unanimously to replace Trent Lott.


SEN. BILL FRIST (R-TN), INCOMING MAJORITY LEADER: Until today, in fact, just moments ago, I've always regarded my most profound professional responsibility in life to be a blessing that I've been given once before, and that blessing, indeed, was to hold in my hands a precious heart in all its glory and all its power.

A few moments ago, my colleagues gave me a responsibility equal to that. And in some ways, many would say even a heavier responsibility.


O'BEIRNE: Frist tried to make the best of Lott's forced resignation.


FRIST: I honestly believe this will transform what has occurred in the last few weeks, what has occurred at the moment in history, into a catalyst, a catalyst for unity and a catalyst for positive change.


O'BEIRNE: No soft landing was arranged for Lott.


SEN. RICK SANTORUM (R), REPUBLICAN CONFERENCE CHAIRMAN: I don't think Senator Lott needs any title to go ahead and have influence in the United States Senate.


O'BEIRNE: Bob, has Bill Frist's election turned a big problem into a big plus for the Republicans?

ROBERT NOVAK, CAPITAL GANG: Well, that's the Republican spin, Kate. They are saying that this is shabby treatment of Trent Lott to be excused, because now it's just a new day for the Republicans. I'm always worried when Republicans are acting like they're kinder and gentler, because I see great capitulations ahead.

But beyond that, I thought Bill Frist, who's a good fellow, gave -- maybe it wasn't the worst speech I ever heard, but it was in the top 10 of the worst speech. It was just terrible. I can't imagine which -- what led him to do that. And I think it does show he has a very steep learning curve.

I think somebody ought to tell him, though, that the job he has was Lyndon Johnson's, not Abraham Lincoln's. I don't think he has to give a Gettysburg Address when he's going to be Senate majority leader.

O'BEIRNE: Margaret -- First, let's get some of the medical metaphors out of the way.


O'BEIRNE: They needed -- Which we're going to get very tired of. They needed a transplant, they came up with Senator Frist. Do you disagree with Bob? Do you think he's what the doctor ordered?

CARLSON: It -- he was wrong to make a life-or-death situation, becoming majority leader. And he's confusing several things there.

On the other hand, I think the Republicans have taken what was a problem and gotten a twofer out of it, which is, they got to reject the Southern strategy the minute it was discovered and exposed to the light, and they got rid of Trent Lott, which they've been wanting to do for awhile but hadn't been able to do, and found the person who could do it, which, in the past, wasn't Don Nickles or Rick Santorum or any of the other people who wanted it.

Bill Frist is the guy who could replace the guy they wanted to get rid of. And so now they're in great shape.

O'BEIRNE: Mark Shields, as talented, extremely talented as Bill Frist clearly is, he is, of course, only a sophomore. Do you think he's going to be able to do a better job running the Senate on behalf of the Republicans than the experienced Trent Lott?

MARK SHIELDS, CAPITAL GANG: I (UNINTELLIGIBLE), well, that, of course, is to be decided, Kate. But I don't think longevity necessarily determines whom a great leader -- who a great leader is and becomes. Lyndon Johnson, you'll recall, probably the dominant Senate figure of the 20th century, was only there for two -- only spent 12 years in the Senate.

But just two things. First of all, the Senate rules, as I recall, are for a secret ballot for -- in choosing the leaders. Now, how do you do that on a conference call? That must have been -- the Republicans are really cleverer than I ever thought they possibly could be.

O'BEIRNE: Maybe, Mark, they must have disguised their voices.

CARLSON: No, they wore hoods.

SHIELDS: That's a -- oh, boy. Ooh.

NOVAK: Ohhh.

SHIELDS: And then secondly...


SHIELDS: ... secondly, I -- Bill Frist is going to decide or going to learn very quickly that he's flying now at a different altitude with more intense scrutiny and greater coverage. The coverage will not be necessarily on his terms, Kate, just as the wonderful heart surgeon who goes and does charitable work in Africa. Now it'll be revealed that in fact Eli Lily, the giant pharmaceutical company, the book he wrote, "Transplant," they bought one-third of all the copies.

If I'm not mistaken, Republicans went after Jim Wright when he was speaker of the House for a similar arrangement, where an outside group was buying copies of a book.

So I think you're gong to see greater scrutiny. And the question is, is Bill Frist ready for that prime time?

O'BEIRNE: Bob, clearly prescription drug benefit for Medicare is on the agenda this year. The Democrats going to try to make political hay out of Bill Frist's connections to the...

NOVAK: Yes, you know, I see mentioning the speech, he mentioned prescription drug benefits, didn't mention tax cuts. That's a new entitlement. It's not a Republican issue, it's a, it's a, it's a defensive issue for the Republicans.

The other thing is, when dear Margaret talks about the Southern strategy being dead, it better not be dead, because if there is no Southern strategy, there's no majority for the Republicans.

CARLSON: Well, I think in the next election we are not going to see Republicans openly showing nostalgia for the Confederate flag.


CARLSON: Oh, yes, they did. Sonny Purdue, in fact...

(CROSSTALK) CARLSON: ... did it, and I do not think we are going to see pilgrimages to Bob Jones University.



O'BEIRNE: Yes, we'll know over...

CARLSON: Yes, we'll see, we'll see.

O'BEIRNE: ... we'll know over the next several months.


O'BEIRNE: And we'll be back, when Mark Russell joins us next for THE CAPITAL GANG's 2002 Awards.


O'BEIRNE: Welcome back.

Joining us now from his annual visit is an American treasure, humorist Mark Russell. Mark will perform at Ford's Theater in Washington January 15 through 19, so get your tickets now.

Thanks for coming in (UNINTELLIGIBLE).

MARK RUSSELL, HUMORIST: Bless you, I wasn't going to ask anybody. Yes, it was a...

O'BEIRNE: Thank you.


RUSSELL: I wrote that (UNINTELLIGIBLE) whatever you want.

O'BEIRNE: A happy New Year's gift.

RUSSELL: Whatever you want. And by the way, let the record show, there's a local story going around here, all the papers are picking it up, but Bob Novak's house is even bigger than Ted Koppel's, so I want you to know that.

O'BEIRNE: Now, CAPITAL GANG's coveted awards for 2002.

First, the year's most valuable performer. Bob Novak.

NOVAK: It's Colin Powell. He has saved President Bush from going in unilaterally into Iraq, went to the Congress, went to the U.N. I don't know if he can avoid war, probably not, but he's going to have a lot more allies than he would have had if it wasn't for Colin Powell.

O'BEIRNE: Huh. Mark Russell. RUSSELL: Well, I take this category literally, valuable player, as I understood it. So it's got to be the lottery winner, Mr. Andrew Whittaker of West Virginia, whose taxes will bring in more riches to that state than Senator Robert Byrd.

O'BEIRNE: Margaret Carlson...


O'BEIRNE: ... Margaret Carlson.

CARLSON: My most valuable player is Karl Rove, who told Bush where to go and when to go, and everywhere he told him to go, it was the right place to be.

O'BEIRNE: Mark Shields, your most valuable player?

SHIELDS: Hey, Kate, it should be pointed out that Mark Russell is the political genius who inspired Senator Trent Lott to host an office Kwaanza party.

Now, beyond that, I think that the most valuable performer of the year has to be the voice of the faithful, the courageous lay men and women of the Boston archdiocese, who confronted the stonewalling of their cardinal about predator priests and the abuse of children and forced a revolt, which has opened up the doors and the windows of the Catholic Church.

O'BEIRNE: My most valuable player is Vice President Cheney. He's too little mentioned with kudos are given for people responsible for the Republican wins in November, and shares all the responsibility for the policy successes that have kept this president so high in the approval ratings.

Worst performer for this past year, Mark Russell?

RUSSELL: OK, let me just isolate it. It's a Trent Lott thing. But relax, Bob. I isolate Trent Lott's performance at Black Entertainment Television, which, by the way, was the biggest white audience that network ever got, reflected in the commercials for mayonnaise, Wonder Bread, and Velveeta Cheese.

But Trent Lott, he clarified it all. He said he was not referring to Strom Thurmond's record as a segregationist, but it was his record as an anticommunist. So in other words, if Strom Thurmond had his way, Lincoln would never have freed the communists.

O'BEIRNE: Makes sense to me.

Margaret, your worst performer.

CARLSON: My worst performance is Terry McAuliffe, who put an awful lot on midterm elections, and as late as election night was saying, It's going to be a great night for Democrats and a terrible night for Republicans.

O'BEIRNE: Mark Shields, your award for the worst performance.

SHIELDS: Kate, it's not the fun couple, Suzy Wetlaufer (ph) and Jack Welch from GE, but it is from the Salt Lake City Winter Olympics, after the Canadian ice skating pair had absolutely dominated the competition, the French judge, who went into the tank for the Russians and gave them the gold medal.

O'BEIRNE: My award for the worst performance goes to Tom Daschle, soon to be former majority leader. He made a major political miscalculation by holding up the Department of Homeland Security at the behest of the labor unions, thereby making the Democrats look like they cared more about job security than our security, and they paid a heavy price in November.


NOVAK: My worst is Andrew Cuomo, who ran for governor of New York. He was way ahead in money, he was ahead in the polls for the Democratic primary. He was just a terrible -- on his way to the White House with a brief stop in Albany. And he ran a terrible campaign, couldn't even make it to the primary. That's the good news. Bad news is, I read he's going to try again in the next election.

RUSSELL: I hope so, because I wrote the song and had to throw it out before he could get in there.

O'BEIRNE: Margaret Carlson, your biggest surprise of the year.

CARLSON: My biggest surprise is not that Jack Welch practically got his own nuclear reactor in the -- in his package leaving GE, but that Robert Torricelli gave one of the longest exist speeches ever, saying that we had all become an unforgiving country, and having to cede the election to his archenemy, Senator Frank Lautenberg.

O'BEIRNE: Mark Shields, your biggest surprise.

SHIELDS: My biggest surprise, Kate, in all candor, was the Republicans picking up both House and Senate seats in the off-year election of 2002, led by President George W. Bush and his amanuensis, his faithful Pancho Sanza, Karl Rove.

O'BEIRNE: My biggest surprise, given the conventional wisdom, was the quick victory in Afghanistan. We were warned that the Russians got bogged down from these fearsome fighters. And in a matter of weeks, the Taliban was collapsed, and Karzai was installed.

CARLSON: And Kate, might I just add that my second-biggest surprise is that Bob is sitting still for a woman hosting CAPITAL GANG.

O'BEIRNE: Well, that is the big surprise of the year, Bob.

CARLSON: And we want to congratulate you. There can be growth in an executive producer.

O'BEIRNE: Now, there, there... NOVAK: I am, I am, I am a very tolerant person.


NOVAK: But anyway...

O'BEIRNE: So your second-biggest surprise.

NOVAK: My biggest surprise is the fall of Trent Lott. Kidding around with old Strom Thurmond, just trying to play a little Mark Russell on the circuit, you know. If he had a piano, he would have (UNINTELLIGIBLE) use that, and I never dreamed that that would cause him to fall. But people are mean in this town.

O'BEIRNE: Mark Russell says, Leave the humor to me, Trent, stick to the politics.


O'BEIRNE: Your biggest surprise, Mark.

RUSSELL: ... I think I can see that (ph). The funny thing, the reporters in there didn't get it, they're all younger than Mr. Novak and myself, and they missed the whole thing.

My -- incidentally, you're not going to mention Jack Welch any more on this show, are you? I mean, that alimony that he...


RUSSELL: ... pays makes the rest of us look bad.

But anyway, my biggest surprise, you know, is the November surprise in Florida this time, a glitch-free election, no problems, everything was fine. And s you wonder, what happened to all those senior citizens in Florida who couldn't figure out the ballot two years ago. Apparently they're dead.

O'BEIRNE: And finally, the rookie of the year in (UNINTELLIGIBLE). You first, Mark Shields.

SHIELDS: The rookie of the year has to be the mother of five, married for 40 years to the same man, blasted by conservatives for lacking family values, and that's the new House Democratic leader after 200 years, a woman, Nancy Pelosi of California.

O'BEIRNE: I have two rookies. When the Democrats needed attractive new faces in races this past November, they tapped two people who represent the future of the Democratic Party, Walter Mondale and Frank Lautenberg are my rookies.

Bob Novak?

NOVAK: Well, that's a little sarcastic. I'm going to give...

O'BEIRNE: But sincere. NOVAK: Sincere. I'm going to give a rookie of the year, it was Norm Coleman, a guy they -- they said, Poor Norm is dead, when Fritz Mondale, an icon in the Democratic Farmer Labor Party in Minnesota came in. And Norm Coleman trumped, trump him, Trounced him, trounced him (UNINTELLIGIBLE).

CARLSON: (UNINTELLIGIBLE), you mean trounced, but he wasn't trounced.

O'BEIRNE: Mark Russell, your rookie.

RUSSELL: Dean Barkley, the interim senator from Minnesota who was sworn in on November 6, and his term expires on January the 7th, which is why he was sworn in on a condensed version of the Bible.

CARLSON: And what a fine job he's done.

O'BEIRNE: Margaret?

CARLSON: My rookie is Senator Bill Frist, having gone from heart surgeon to Senate majority leader in eight years. And as Mark says, it could be downhill from here, but it's been quite a meteoric rise.

O'BEIRNE: OK. Mark Russell and THE GANG will be back with our Fearless Forecasts for 2003.


O'BEIRNE: Welcome back.

And now our predictions for 2003.

First, the biggest crisis next year.

Bob Novak.

NOVAK: Assuming that we are going to attack Iraq, the absolute revulsion in Islam. The whole world, Islamic world all around the globe, what the reaction is against the West and the U.S.

O'BEIRNE: Mark Russell.

RUSSELL: Well, there's this whole thing surrounding Korea, Kate. Now, Bob Novak fought the Korean War to defend South Korea from North Korea, making South Korea what it is today, the country we buy American flags from, because they're cheaper than the ones made in China.

O'BEIRNE: Your prediction for the biggest crisis, Margaret?

CARLSON: Well, I think Iraq and North Korea will be big foreign policy crises. The biggest domestic crisis will be a political one, it will be Al Sharpton running for president. He will be more trouble to Democrats than Trent Lott was to Republicans, and Democrats will not be able to get rid of him, however.

RUSSELL: You know, when he was in India recently, he was the first showboat to go down the Ganges River?

CARLSON: And Democrats would like to keep him there.

O'BEIRNE: In Austin, Texas, Mark Shields, your biggest crisis.

SHIELDS: Biggest crisis, Kate, just to let the record show that Mark Russell, he talked about Korea, Mark Russell dodged the military draft. How did he do it? He did it my joining the United States Marine Corps. That's how clever and true this guy is.

But I do, I do want to say...

RUSSELL: And like Mark Shields, we both saw combat in Tijuana.

SHIELDS: That's right. Hey, thank God for penicillin, Mark.

But let's get one thing straight. The biggest crisis, Bob Novak has put his finger on it, is going to be the Middle East. The Israeli-Palestinian conflict will look like a lovers' spat at the end of this year, I'm fearful.

O'BEIRNE: I predict the biggest crisis next year will be the axis of evil. When George Bush so labeled those three countries in January, his critics thought it was random and overly dramatic, and now we're seeing the triple threat, possibly nuclear, of North Korea, Iran, and Iraq. He was awfully prescient.

Next, what will this prescient president's approval ratings be one year from now, December 2003, Mark?

RUSSELL: OK, what is it now?

O'BEIRNE: Low 60s, mid-60s.

RUSSELL: OK, I really predict that in a year from now, it will be about the same, unless, God forbid, al Qaeda hits us again, at which time Bush's ratings go back to 92.

O'BEIRNE: Margaret Carlson, where will he be?

CARLSON: Yes, I say up to 92, at least higher, if we're in Iraq and it's successful. If, however, it's a quagmire, low 40s.

O'BEIRNE: In Austin, Mark Shields.

SHIELDS: Kate, proving that this prescient president cannot defy the laws of gravity perpetually, his -- the president's job rating December of 2003 will be 49 percent favorable.

O'BEIRNE: Huh. Bob, I am more optimistic on the president's behalf than Mark. I give him a precise 61 a year from now. And what is your prediction?

NOVAK: I'm assuming there'll be a war, and the war will be over and won, and he'll start slipping. He'll be around 53 percent. Third year is a bad year for a president. RUSSELL: Well, if the war's completely successful, it'll be Bush's war. If it is completely unsuccessful, it'll be Clinton's war.

O'BEIRNE: Margaret Carlson, who will lead the Democratic presidential polls one year from now, December 2003?

CARLSON: I predict that Senator Lieberman will get the Gore vote without being Gore. He will have the family values licked against the Republicans. He will have homeland security locked up, given that it was his bill. And he's in the Mideast right now, and I think he will have the Jewish vote.

So I give him the Democratic base and the lead out of the gate.

O'BEIRNE: Joe Lieberman?

In Austin, Mark Shields, who's your pick for the top Democratic in a year?

SHIELDS: Kate, I'll tell you, because we rerun the last election, the premium will be upon who -- which Democrat can emerge as unorthodox, as the John McCain of 2003? And I'm going to predict an unorthodox selection, and that is Dick Gephardt, the House Democratic leader, understands this is his last, best, and only chance, and he better say something bold and do something daring.

O'BEIRNE: I'm going to guess that a year from now, we would have moved beyond name recognition, and one of the president's sharpest critics on foreign and defense policy's going to be John Kerry, and I think that'll be popular with the base. I'll pick John Kerry.


NOVAK: I will, I will too, but for a different reason. I think that he has two people's votes. He has his votes, and he has Bob Kerrey's votes, and you add that up, and he'll be in front.

O'BEIRNE: Mark Russell.

RUSSELL: Well, my prediction, he's ready, he's tanned, he's back in the news, Walter Mondale, who will lead the country into the 1980s.

However, I would like to see Chris Dodd. And as his running mate, John Breaux of Louisiana or possibly -- and I'm serious about this -- running mate dark horse Governor-elect of Arizona, Janet Napolitano.

O'BEIRNE: Oh, we would have heard it here first, Mark. Huh. Very interesting.

RUSSELL: I'm getting on the record, and I'll accept your congratulations a year from now.

O'BEIRNE: We'll keep the tape.

RUSSELL: All right. And finally, who will be "TIME" magazine's Person of the Year for 2003?

In Austin, you're up first, Mark Shields.

SHIELDS: I hope, I hope as a citizen of the world, as well as the United States, it will be Secretary of State Colin Powell.

O'BEIRNE: All right. My prediction is going to be Secretary of Defense Don Rumsfeld. I think the "TIME" magazine Person of the Year will focus on Iraq, what I predict will be a successful military engagement in Iraq. They clearly are not interested in putting George Bush on the cover. They've passed up the past two years, so I think it'll go to Don Rumsfeld.

NOVAK: Since the Person of the Year, I think this is right, Margaret, is the person who has the biggest impact, I think it's going to be General Tommy Franks, who is the leader of the expeditionary force. Now, the question is, will he be on there because he's another Dwight Eisenhower? Or on there because he's another Ian Hamilton?

Who was Ian Hamilton?

O'BEIRNE: I ask the questions, Bob.


O'BEIRNE: You give the answers.

CARLSON: And I would answer it, but I don't want to take your (UNINTELLIGIBLE).

NOVAK: Well, he was the leader of the British disaster at Gallipoli.

RUSSELL: And Bob was there...


RUSSELL: ... by the way.

We don't know his name, but he -- whoever the Iraqi general who successfully overthrows Saddam Hussein in a military coup, he'll be a dictator, but he'll be our dictator, and he will turn all of Saddam's palaces into casinos, and they'll open up Baghdad Country Club, whose golf course will have about 400 holes, unfortunately, all craters.

O'BEIRNE: Will you play those casinos in Baghdad, Mark?

RUSSELL: Me and Wayne Newton, yes.

O'BEIRNE: Margaret Carlson...


O'BEIRNE: ... your prediction, your informed prediction of "TIME" magazine's Person of the Year.

CARLSON: And therefore I don't want to make one because I know how it's done, and it's very hard to predict. I will say this, though, I do think that Iraq is the news story all next year, and it might be somebody coming out of Iraq.

But this year we had three women, I don't know if you can get this. So what I do know is that now it will go back to being man of the year. They don't have to do a woman for a really long time. And so even though she may be quite deserving, it will not be Condi Rice.

O'BEIRNE: All right.

RUSSELL: (UNINTELLIGIBLE) was a person, you know. For awhile there, they were getting into these opaque things...

CARLSON: Things.

RUSSELL: ... like...

O'BEIRNE: Oh, yes, right.

RUSSELL: ... the ozone layer...


O'BEIRNE: Right, inanimate objects, right, right.


O'BEIRNE: We want a living, breathing Person of the Year.


O'BEIRNE: We can agree.

We'll be back with the Outrages of the Year.


O'BEIRNE: And now for the Outrage of the Year.

With the United States squared off against Iraq, Democratic Congressmen McDermott, Bonior, and Thompson paid a sympathetic visit to Baghdad, where they made excuses for Saddam's poor misunderstood regime. These sitting members of Congress disgracefully criticized their own government and comforted the Butcher of Baghdad while in his corrupt capital before, unfortunately, heading home.

Bob Novak.

NOVAK: Defying precedent, the U.S. Senate under Democratic control throttled President Bush's federal judicial nominees thought to oppose abortion. Many, such as the brilliant Washington lawyer Miguel Estrada, were not even given a hearing. Two distinguished nominees, Federal District Judge Charles Pickering of Mississippi and Texas Supreme Court Justice Priscilla Owen, were blocked by Democrats on the Judiciary Committee.

All would have been confirmed on the Senate floor. That outrage can be redeemed if President Bush only resubmits all these nominations.

CARLSON: With its totally tasteless Wellstone memorial service, Democrats killed Walter Mondale's chance of winning that seat and hurt Jean Carnahan in Missouri as well. Why didn't the Clintons, instead of clapping and laughing, send word backstage to tone it down? Why didn't Senator Tom Harkin give a speech that was elegiac, not angry?

If only Wellstone had been in charge, his memorial would have been solemn but happy, like him. The bungled memorial service ironically served to make us miss Wellstone that much more.

O'BEIRNE: Mark Shields.

SHIELDS: Kate, John F. Kennedy, that rare presidential candidate for whom Mr. Novak and I both voted, told the world that Americans, quote, "would pay any price, bear any burden," end quote, to defend freedom.

Today President George W. Bush, on the eve of war against Iraq, guarantees the wealthiest Americans that for them, the war will be ouchless and painless. No sacrifice, no suffering, no service.

A Bush bonus for the best off, their taxes will be cut even more. The richest will pay no price. They will bear no burden. Where is the patriots' outrage against this grave injustice?

O'BEIRNE: Mark Russell, your outrage of the year.

RUSSELL: OK, this is not made up. Earlier this year, some women in Saudi Arabia came running out of a burning building only to be sent back inside by the police to get their proper headwear.

About the same time, Saudi Arabia, in an attempt to continue to get on our good side, actually proposed to make a gift to us of the Saudi-owned racehorse War Emblem, and, I'm not kidding, and I read this in the paper, and it was verified, they wanted to have this ceremony conducted -- are you ready for this? -- at ground zero in New York City, which makes us wonder, maybe we're getting ready to bomb the wrong country.

O'BEIRNE: Thank you, Mark Russell. We're so grateful for your annual gig with THE GANG. Thank you very much.

RUSSELL: Thank you, thank you.

O'BEIRNE: Happy New Year.

RUSSELL: Thank you all. Happy New Year to you.

NOVAK: Happy New Year.

O'BEIRNE: Coming up in the second half of CAPITAL GANG, our Newsmaker of the Week is counselor to the vice president Mary Matalin. Beyond the Beltway looks at the crisis in Korea with former ambassador James Lilly. And our CAPITAL GANG Classic, all after the latest news following these messages.




O'BEIRNE: Welcome back to the second half of THE CAPITAL GANG.

I'm Kate O'Beirne with Robert Novak, Margaret Carlson, and, in Austin, Texas, Mark Shields.

Our Newsmaker of the Week is counselor to the vice president Mary Matalin.

Mary Matalin is 49 years old, her residence Alexandria, Virginia, religion Roman Catholic. Mary is chief of staff to the Republican National -- was chief of staff to Republican national chairman Lee Atwater, was deputy manager of the 1992 Bush campaign, was co-host of CNBC's "Equal Time" and CNN's "CROSSFIRE," co-authored with her husband James Carville "All's Fair: Love, War, and Running for President."

I sat down with Mary Matalin on her last day on the job.


O'BEIRNE: Mary, you've held a rare double designation, assistant to the president and counselor to the vice president. Why both titles?

MARY MATALIN, COUNSELOR TO THE VICE PRESIDENT: Because I thought I had a unique -- (UNINTELLIGIBLE) a unique position. I find it a unique, narrow set of unique skills, which was to integrate the vice president and the president's offices, which -- you've been around town for a long time -- is not typically the case.

So I wanted to have a foot in both camp, and that served its purpose.

O'BEIRNE: What was your biggest surprise when you joined the White House staff?

MATALIN: I didn't expect in a White House, because I had never seen it, the collegiality that exists in this one. And the -- what the press attributes to us as being tight-lipped and nonleaking is really a function of, everybody's there for President Bush.

O'BEIRNE: So that's how President Bush has succeeded in having so many people say so little? MATALIN: Well, what -- I mean, they're all there for him, so they're -- you know, what usually is -- creates leaks are people trying to be big shots, which, you know, nobody there needs to be a big shot, or more typically, have their own agenda, want to, you know, float ideas out there and box the president in. And they're able to be there for the president's agenda.

O'BEIRNE: Having gone through CNN to the White House, what do you see as media misconceptions about how the White House actually operates?

MATALIN: I think they -- the media thinks we're more buttoned- down and more constrained and more orchestrated than is the case, or more political. I think it's -- they tend to continually call it a political White House. And what drives the politics is the policy. George Bush came to town knowing what he wanted to do, in his -- and for the future, knows where he wants to go.

He thinks big, he thinks long. He wants to sell (UNINTELLIGIBLE), but not in the way that they're a detriment in the future.

So that's what drives the White House, and I think the -- not media-bashing at all, but the process stories are easier, and the process stories are political.

O'BEIRNE: Why don't men, with demanding, powerful jobs, ever leave them for family reasons?

MATALIN: Well, maybe, you know, that my family did well with this, they did much better than I thought, (UNINTELLIGIBLE) Dick Cheney and the (UNINTELLIGIBLE) -- and the president made it very accommodating to mothers. I never missed a any Brownies (ph), I never missed any school conferences. But what I did miss is coming their hair, do you know, knowing their favorite clothes, that kind of -- the kind of routine stuff that is how you savor your children.

And there's -- I don't know, maybe women have a higher savor quotient.

O'BEIRNE: When Karen Hughes left, Mary, you were convinced that her influence wouldn't diminish. Has that been the case?

MATALIN: Her influence has not diminished. I think she talks to the president every day, or somebody else every day in the White House. All those big decisions, she's continued to be in. Neither one of us had line jobs, you know, where you'd go in and punch a clock. So what we do can be done from anywhere. And she certainly continues to do it.

O'BEIRNE: Will you now have more time to keep an eye on James so he doesn't cause too much trouble for your Republican friends?

MATALIN: Well, I think that's really -- you're gentle here at CNN. I think he should just be censored and thrown off TV, and then that would -- that would help, that would help that cause a lot. O'BEIRNE: Ultimately, does it become extremely difficult to juggle job and family, even in a self-labeled family-friendly White House?

MATALIN: Yes, at least it did for me. So that can say that I'm inefficient or disorganized. Maybe some can do it better. Mrs. Cheney just does it effortlessly. And I found it -- the first thing that goes is you, in the hot bath, and, you know, reading fiction, you know. You have to read "Saddam's Bombmaker."

And the second thing that goes is attention to the adults in your house, which is always kind of iffy in mine, but the, you know, your significant others, which James is very supportive through that.

O'BEIRNE: So that's your New Year's resolution.



O'BEIRNE: Margaret, did your impression of the Bush White House change based on what Mary told me?

CARLSON: Well, as someone once said of people who work in Washington, sleep is the new sex, since there's no time for anything.

Mary walks a fine line between the White House she serves and people on the outside, whom she has very good relations with. And she was very instrumental in helping me get interviews that I might not otherwise have gotten.

Bob, over here, who's gagging over the she wants to savor her children. But in fact most men who say, I want to spend more time with my children, have just been fired. It's only women who leave genuinely to spend more time with their family.

O'BEIRNE: That does seem to be the case.

Mark Shields, what do you make of Mary's explanation of how they plug all those leaks at the White House?

SHIELDS: Well, Kate, I -- first of all, I had to say, that was as unfair and hard-hitting an interview as I've ever seen.

O'BEIRNE: Thank you, Mark.

SHIELDS: And I'm telling you, I mean, I feel I've seen Mary wounded now and on the defensive.

How they plug leaks at the White House is basically they throw people overboard after they leak.

But the only question that people ask me about Mary Matalin and James Carville is, How do they stay together? And seriously, do you have a hint on that? I mean, I know they both love each other and they're devoted parents. But how do they stay together with such public airing of their disagreement?

O'BEIRNE: Let me ask Bob Novak, who spends as much time with James as Mary does.


O'BEIRNE: Bob, how do they do it?

NOVAK: But not, not in bed, though, so I don't -- I...


NOVAK: I would, I would, I would say that it is one of the great mysteries of America that we all have to ponder as we go into the new year.

O'BEIRNE: We'll leave it at that.


O'BEIRNE: So people will stay tuned.

CARLSON: And I'm sure Bob will be pondering that (UNINTELLIGIBLE).

O'BEIRNE: Next on CAPITAL GANG, Beyond the Beltway looks at the nuclear crisis on the Korean peninsula with former ambassador James Lilley.


O'BEIRNE: Welcome back.

The communist North Korean regime took new steps to reactivate its nuclear weapons program with a plutonium-producing reactor.


MARK GWOZDECKY, IAEA PRESS SPOKESMAN: It can only produce plutonium, and plutonium cannot help the North produce electricity. It can only be used in the context of their fuel cycle for nonpeaceful purposes. And we're simply not any longer in a position to monitor what they do with this material. And that's of great concern for us.


O'BEIRNE: The Bush administration showed no interest in negotiating with North Korea.


PHIL REEKER, STATE DEPARTMENT SPOKESMAN: We will not give in to blackmail. The international community will not enter into dialogue in response to threats or broken commitments, and we're not going to bargain or officer inducements for North Korea to live up to the treaties and agreements that it has signed. DONALD RUMSFELD, SECRETARY OF DEFENSE: We are capable of fighting two major regional conflicts. We're capable of winning decisively in one and swiftly defeating in the case of the other.


O'BEIRNE: North Korea has ordered the expulsion of international weapons inspectors, and the U.S. called on North Korea to scrap its nuclear weapons program.

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

Thanks so much for coming in, James.


O'BEIRNE: Jim, could the actions of North Korea trigger another Korean war?

LILLEY: No, I don't think so. They are trying these very small, nasty measures, kicking out the inspectors, bringing machine guns into the DMZ. This does not change the balance of power at all.

The real question is, are you going to allow this broken-down Stalinist vicious state to have nuclear weapons? This is a Chinese problem, a Russian problem, Japanese, and ourselves. It has to be stopped. And as Jiang Zemin, president of China, said, Nip in the bud.

O'BEIRNE: Bob Novak.

NOVAK: The Russians have said, Jim, that the North Koreans are doing this because we reneged on the 1994 deal to build them light water reactors. I had heard that before. Is there any truth to that?

LILLEY: There's a -- the Russians are playing a dual game in this. You know, on the one hand, Putin comes out and says, No nuclear weapons on the peninsula. He says this with Jiang Zemin of China. I read Roumiantzev's statement. It is full of inaccuracies.

He said there's been no construction work for 10 years. That is definitely wrong. He says the North Koreans are incapable of developing a nuclear weapon. That is wrong. He just is tweaking us. I don't take it all that seriously. It's annoying, it's frustrating, but that's the way they are.

O'BEIRNE: Margaret Carlson.

CARLSON: Mr. Ambassador, I'm wondering if the Bush administration doesn't have to do some negotiating with South Korea, which seems to have started balking recently and, you know, making noises that are not at all friendly to the United States. President- elect Noh and others are exacerbating a bad situation at a moment when the United States needs them.

LILLEY: Well, this was long overdue. You've got to have a nationalistic reaction in South Korea, and this come with the election of President No. Anti-Americanism has been there for a long time. It's worse now. But right now, the North Koreans are fishing in troubled waters. They see a real opportunity to draw the South in with them and make the United States the devil, which is what they're trying to do right now.

But I do think we have to get with the South Koreans very quickly. We have to have the South Koreans take the lead on negotiations with the North, not the way it was done in the '90s when Galucci and Perry took over this thing. They have to do it, we have to support them, as we did in '91-'92.

A high-level emissary, yes. I know we're going to have to start talks at least in early January with (UNINTELLIGIBLE) with Kelly.

O'BEIRNE: Who are we going to send?

LILLEY: Kelly's (ph) going to go over there to South Korea, start talking. But I hear through the grapevine, there is a former secretary of state in the package, maybe.

CARLSON: Is his name Schulz, not Kissinger?

LILLEY: Or Baker or...


O'BEIRNE: Mark Shields, a question for Ambassador Lilley.

SHIELDS: Ambassador Jim Lilley, what does it tell us that two of our long -- most longstanding and dependable allies, Germany and South Korea, have just seen presidential elections won by candidates who emphasized their daylight, their differences, and their independence from United States foreign policy?

LILLEY: Well, Mark, it -- this -- the president -- President- elect Noh was riding a tide. This was coming. He jumped on the tide. It swept him into office by a very narrow margin. There's probably 47, 48 percent of the Koreans who don't like this guy.

But there is a danger in this, but I -- so far he's made all the right noises, and certainly his predecessor and mentor, President Kim Dae Jung, made these today in terms of, We will not tolerate a nuclear weapons program on the peninsula.

Already, No is beginning to find that campaign rhetoric is one thing, the realities of South Korea are another thing. I'd not say he's going to be our boy, I'm saying that he should lead the negotiations with a sharp crack team of Koreans, as they did in '91- '92, and as we supported them.

For us to get out in front and do this forces -- obliges the North Korean to come in with his nonaggression suggestion. This, first of all, demeans the South Koreans. You can't even negotiate for your own country's security. The Americans have to do it.

Second, it leads to what they call the withdrawal of all American troops. We've got to reposition our troops, but I don't think we draw them out yet.

O'BEIRNE: Oh, so some are urging withdrawal of our troops, but you think that would be a mistake, so that they're not held hostage to North Korea.

LILLEY: You've got to get a quid pro quo with North Korea. If we start pulling back, they've got to give us confidence-building measures, where they pull back from the DMZ. Actually their military, conventional military is deteriorating fast. Those hardened sites on the DMZ with all the artillery are beginning to decay.

And so there's something happening there. If Russia, China, cut off the flow of spare parts, they're in deep trouble, or kimchee, as we say in Korea.

NOVAK: Jim, you may remember that several years ago, Dick Allen, the former national security adviser...

LILLEY: I certainly do.

NOVAK: ... had a rather radical solution to the Korean problem, which was, we gave them everything, we gave them recognition, aid, long-term support. In return, they really got out of the nuclear business.

Did that make sense then, and could it make sense now?

LILLEY: In terms of South Korea getting out of the nuclear business?

NOVAK: No, North Korea.

LILLEY: North Korea.


LILLEY: My sense is that the North Korean deal that we made in 1994, the (UNINTELLIGIBLE) framework, didn't work.

NOVAK: But if we had recognized them then?

LILLEY: I don't think it would have worked anyway. They started that uranium enrichment program in 1998 during the Clinton administration.

They are determined to have nuclear weapons, absolutely. But the price has to be sufficiently high or they'll give them up in turn for what they really need is international financial institution support, Asian Development Bank, World Bank, IMF.

NOVAK: Should we give it to them? LILLEY: If they do the right things. If they don't, none of that happens. And it seems to me then you've got a situation you can deal with them.

But I know that North Koreans have said we did not measure up, but I'll just point this out. The last oil shipment was sent to them after they declared their nuclear weapons program. Then we cut it off, with the support of South Korea and Japan.

Other ways, (UNINTELLIGIBLE) diplomatic recognition, my understanding, I was in on the early parts of this, they drove such a bargain we couldn't do it. They couldn't pay for it. I mean, it was a heck of a situation. And they went round and around on this thing, and finally, Well, why don't you deal with us in New York?

O'BEIRNE: Right.

LILLEY: That's...

O'BEIRNE: I'm afraid I have a finally. You've been such a knowledgeable guest. Thank you so much for joining us, James Lilley.

LILLEY: Thank you.

O'BEIRNE: THE GANG will be back with the CAPITAL GANG Classic, Washington confronting North Korea over nuclear arms nine years ago.


O'BEIRNE: Welcome back.

Over nine years ago, President Bill Clinton promised a new relationship with North Korea if it ended its nuclear weapons program. But if it didn't, warned that the communist regime probably would not survive.

THE CAPITAL GANG discussed this on November 27, 1993. Our guest was former Republican congressman Jack Kemp.

(BEGIN VIDEO CLIP, November 27, 1993)

CARLSON: What Clinton has done is really offer some inducements to try to get North Korea to let us at least inspect. It's not much. And the problem here now is that there's been talk, and it hasn't worked, and now Clinton is offering really more talk.

JACK KEMP (R), FORMER CONGRESSMAN: The president's rhetoric is extremely strong and tough, and not very measured, if you come to think of what we're doing to back it by suggesting that we are going to give them trade inducements, international recognition, and we might even cancel our joint exercises.

SHIELDS: He took this tough, sort of almost belligerent stand at the outset, and then since then there's been a diplomatic retreat, but a retreat. (UNINTELLIGIBLE) influenced in large part, let it be known, by South Korea's own wavering. NOVAK: You know, these people in North Korea see that 70 percent of the American people in a poll don't know whether they would protect the United -- the South Korea ally in case of an invasion, their credibility is down. And Mark, what do you do on the question of bombing? What if they bring their million-man army...


NOVAK: ... over the, over the, over the border?

AL HUNT, CAPITAL GANG: It's much tougher. First of all, they're a lot tougher than the Iraqis. Secondly, you have, you have about over a million people on that border. Seoul is only 50 minutes from the DMZ.


O'BEIRNE: Mark, has anything really changed from what you all said nine years ago?

SHIELDS: Well, Kate, I wonder, because it seems the lesson from Iraq is that the United States will throw its weight around when the other side is too small or too limited to throw much weight back. But when it comes to an international pit bull like North Korea's behaving right now, it seems to be, Nice doggie, nice doggie.

O'BEIRNE: Pit bull, Margaret? We talking animal control here, Mark?

CARLSON: Yes, right, yes, I'm going to get out of the animal metaphor, and into Clinton talking. Bush is the opposite, which is, he doesn't want to talk at all, and only carry a big stick. And I think that he needs to talk softly, whisper in the background, because we really do not want, while our troops are right there, to go to the brink with North Korea, which is waving nuclear arms in our face.

O'BEIRNE: Bob Novak?

NOVAK: One thing nobody wants is a second Korean War. And that is the whole problem, it was the problem nine years ago. They know we don't want a war, and they can be very tough. Do you think we're going to put -- position 250,000 troops in South Korea, like we have in Iraq, and say, Boy, we're going to getcha? They know we won't.

So that's -- that limits our options.

O'BEIRNE: OK, we agree on that. CAPITAL GANG doesn't want a war.

This is Kate O'Beirne saying good night for THE CAPITAL GANG.

If you missed any part of this program, you can catch the replay at 11:00 p.m. Eastern and again at 4:00 a.m. Eastern.

Coming up next, "CNN PRESENTS: Carrier at War."


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