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[07/23/1997 - 08/04/1997]
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[07/23/1997 - 08/04/1997]
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Presidential Electronic Mail from the Automated Records Management System (ARMS)
Automated Records Management System (ARMS) Email from the White House Office (WHO) Bucket
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26444785-20190568F-007-005-2021
[Sperling, Contract with America]
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RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Dag Vega@EOP@LNGTWY@LNGTWY (Dag Vega@EOP@LNGTWY@LNGTWY [ WHO 1)
CREATION DATE/TIME:23-JUL-1997 10:58:23.00
SUBJECT:- PBS: News Hour with Jim Lehrer, 7/22/97
TO: [email protected]@INET@LNGTWY ([email protected]@INET@LNGTWY [ OSTP ])
READ:UNKNOWN
TO: Lorraine A. Voles@ovp@eop ( Lorraine A. Voles@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Virginia M. Terzano@ovp@eop ( Virginia M. Terzano@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Gene B. Sperling@eop ( Gene B. Sperling@eop [OPD])
READ:UNKNOWN
TO: Laura D. Schwartz@eop ( Laura D. Schwartz@eop [ WHO ])
READ:UNKNOWN
TO: Christa T. Robinson@eop ( Christa T. Robinson@eop [ UNKNOWN D
READ:UNKNOWN
TO: Kevin Moran@eop ( Kevin Moran@eop [ WHO ])
READ:UNKNOWN
TO: Lorraine L. Wytkind@eop ( Lorraine L. Wytkind@eop [ WHO ])
READ:UNKNOWN
TO: GN. Lattimore@eop (GN. Lattimore@eop [ WHO ])
READ:UNKNOWN
TO: Angus S. King@eop ( Angus S. King@eop [ WHO ])
READ:UNKNOWN
TO: Daniel J. Gunia@eop ( Daniel J. Gunia@eop [ OA ])
READ:UNKNOWN
TO: Jason S. Goldberg@EOP ( Jason S. Goldberg@EOP [ WHO ])
READ:UNKNOWN
TO: Karen E. Finney@eop (Karen E. Finney@eop [ WHO ])
READ:UNKNOWN
TO: Rahm Emanuel@eop ( Rahm Emanuel@eop [ WHO ])
READ:UNKNOWN
TO: Michelle Crisci@eop ( Michelle Crisci@eop [WHO])
READ:UNKNOWN
TO: Jill M. Blickstein@eop ( Jill M. Blickstein@eop [ OMB ])
READ:UNKNOWN
TO: Michael Waldman@eop (Michael Waldman@eop [ WHO ])
READ:UNKNOWN
TO: Barry J. Toiv@EOP ( Barry J. Toiv@EOP [ WHO ])
READ:UNKNOWN
TO: Darby E. Stott@eop ( Darby E. Stott@eop [ WHO ])
READ:UNKNOWN
TO: Joshua Silverman@EOP (Joshua Silverman@EOP [ WHO ])
READ:UNKNOWN
TO: Stuart Schear@eop ( Stuart Schear@eop [ WHO ])
READ:UNKNOWN
TO: Alison Muscatine@eop ( Alison Muscatine@eop [ WHO ])
READ:UNKNOWN
TO: April Mellody@eop ( April Mellody@eop [ WHO ])
READ:UNKNOWN
TO: Julie E. Mason@eop (Julie E. Mason@eop [ WHO ])
READ:UNKNOWN
TO: Heidi Kukis@OVP@EOP ( Heidi Kukis@OVP@EOP [ UNKNOWN ])
READ:UNKNOWN
TO: Russell W. Horwitz@eop (Russell W. Horwitz@eop [ OPD 1)
READ:UNKNOWN
TO: Julia R. Green@eop (Julia R. Green@eop [ WHO ])
READ:UNKNOWN
TO: Jeremy M. Gaines@eop ( Jeremy M. Gaines@eop [ WHO ])
READ:UNKNOWN
TO: Paul K. Engskov@eop ( Paul K. Engskov@eop [ WHO ])
READ:UNKNOWN
TO: Anne M. Edwards@eop ( Anne M. Edwards@eop [ WHO D
READ:UNKNOWN
TO: Steven A. Cohen@eop ( Steven A. Cohen@eop [ WHO ])
READ:UNKNOWN
TO: Lori Anderson@eop ( Lori Anderson@eop [ WHO ])
READ:UNKNOWN
TEXT:
Message Creation Date was at 23-JUL-1997 10:39:00
News Hour with Jim Lehrer:
"BORDERING ON CANNIBALISM"?
Aired on JULY 22, 1997
Since Speaker Newt Gingrich's ethical problems at the beginning of
the
105th
Congress, a group of conservative Republicans have been working to
oust the
Speaker. Last week, their efforts resulted in a failed "coup" and led
to
the
resignation of the chairman of the Republican Leadership, Rep. Bill
Paxon
(R-NY). Following a background report on the "coup," Margaret Warner
talks
with three Republicans about the state of their party.
SPOKESMAN: The gentleman is recognized for one
hour.
KWAME HOLMAN: Last April, Speaker Newt
Gingrich stood in the well of the House and explained
at length his decision to borrow money from Bob
Dole in order to pay a $300,000 penalty for violating
House ethics rules.
REP. NEWT GINGRICH,
Speaker of the House: This
House is at the center of
freedom, and it deserves
from all of us a commitment
to be worthy of that honor.
Today, I am doing what I can
to personally live up to that
calling and that standard. I hope my colleagues will
join me in that quest. May God bless this House and
may God bless America. Thank you. (applause)
KWAME HOLMAN: After barely surviving the fall
elections with the Republican House Majority in
place, Gingrich was moving to rebuild his legendary
reputation born of the Republican revolution he
engineered in 1994. But on a handful of occasions in
the months to come a small but vocal group of
dissidents in the ranks variously vexed, criticized, and
even publicly challenged Gingrich!,s leadership.
The loose affiliation of
independent-minded
dissidents contains at
least these members,
all two- or three-term
conservatives, both
from the South and
West, and with strong approval ratings in their home
districts. They voice the concern of other
conservatives that Gingrich has become too much of a
moderate, too willing to capitulate to President
Clinton and the Democrats in budget negotiations and
policy matters. But through the dust up with the
dissident group, Gingrich maintains the public support
of his leadership team.
REP. DICK ARMEY,
Majority Leader: The
speaker is running the House.
The speaker is the speaker,
and he has the respect and
the admiration and support of
a majority and many people in the minority.
REP. JOHN BOEHNER, Conference Chairman:
Certainly, we!, ve had our share of disagreements, but the family is
getting along fine.
REP. TOM DELAY, Majority Whip: The speaker is the speaker. He will
continue to
be the speaker, and those opponents of Speaker Gingrich, too bad;
he!,s
going to
continue to be speaker.
REP. NEWT GINGRICH: We believe we!,re very close to having it worked
out
and
hope in the next few hours to be able to announce and then move a
supplemental
appropriations bill to provide the flood aid.
KWAME HOLMAN: But then came Gingrich!,s
decision
last month to give in to the President in a
high-profile
public relations battle over Midwestern flood
aid. A
few
weeks later, according to a story in last
Wednesday!,s
edition of The Hill newspaper some of the
dissidents
met
with some or all of Gingrich!,s lieutenants
and
discussed
ousting Gingrich as speaker. The plan was
abandoned,
but reportedly involved Dick Armey, the elected
majority
leader; Tom Delay, the majority whip; John Boehner, the conference
chairman; and Bill
Paxon, appointed by Gingrich to chair leadership meetings and
reported to
be the
dissidents!, first choice to replace Gingrich. He resigned that post
last
Thursday. All four
men have denied backing Gingrich!,s overthrow. Paxon did so Sunday
on
NBC!,s
"Meet the Press."
REP. BILL PAXON, (R) New York: At no time have I ever been involved
in
effort to
overthrow the speaker that I worked so hard to elect. Tim, the
speaker
appointed me
to serve in the leadership to help solve problems. Last week, I
tried to work to defuse a problem that you!, ve noted. Mistakes
were made. I made mistakes in the way I tried to handle the
defusing of this problem, specifically, didn!,t inform the speaker
of the problem early enough and certainly didn!,t anticipate
when it blew up that it would have the impact that it did on our
agenda and on our conference.
KWAME HOLMAN: On ABC!,s "This Week" two of the leading dissidents
said they
were willing to wait, but Gingrich!,s lieutenants advocated his
immediate
ouster.
Representative Matt Salmon said conference Chairman Tom Delay
promised to
support a floor vote against Gingrich.
REP. MATT SALMON, (R) Arizona: There were 17 of us
in
that meeting, including Tom Delay, and I can tell
you
unequivocally that the 17 members that were in
that
room with
Tom Delay had that impression; that we walked out
believing
completely that that was Tom Delay!,s intent.
KWAME HOLMAN: Now that it appears to be over for
now, the speaker!,s office said today Gingrich
plans no
action
against Delay or the other remaining members of the
leadership. For his part, Gingrich said yesterday, at a meeting of
business leaders in his
suburban Atlanta home district, "You know I don!,t quit. We are
doing
fine. We have
to calmly keep our eye on the ball." A group that includes many of
the
rebels
reportedly will meet tonight. The full House GOP Conference has its
regular meeting
tomorrow morning.
MARGARET WARNER: Now, three Republicans
assess all this. As we just saw, Rep. Matt Salmon
was one of the dissidents seeking the ouster of
Speaker Gingrich. He!,s a second-term congressman
from Arizona. Rep. Marge Roukema of New Jersey
is serving her ninth term in Congress, and former
Congressman Bob Walker of Pennsylvania, who
retired last year, is a long-time friend and adviser of
the speaker. He is now president of the Wexler
Group, a Washington lobbying firm. And
Congressman Salmon, starting with you, what brought
all this to a head now?
REP. MATT SALMON, (R)
Arizona: Well, I think what
brought it all to a head
now--and call I can say is
what I learned from my
involvement in this
process--on Thursday night one of my colleagues,
who had been part of the 11-the group of 11 that
was kind of spawned out of our unhappiness about
the willingness of the leadership to raise committee
funding, that was a long, long time ago, but one of
those colleagues came up to me on the floor and said
that a member of leadership had requested that we
get together that night to decide about decisive action.
I might say--I!,d point out it wasn!,t my time frame,
because, frankly, I was in more of a "wait and see"
mode to see exactly how things were going to play
out.
MARGARET WARNER: But--and the substance of
it--I mean, is this--is this a philosophical dispute that
you have with the speaker? What is the issue, the No.
I issue?
REP. MATT SALMON: I don!,t think it!,s so much of
a philosophical dispute as much as it getting back to
the things that we!, ve promised that we would do
three years ago on the Capitol steps. We simply want
to get back to the things that are important for the
Republican Party, and that is balancing the budget,
cutting taxes, getting the federal government off of our
backs, and returning power back to the states. That!,s
all we ever wanted. It!,s not a personality dispute. It!,s
not in my mind that he has so-called become a
moderate. It!,s just about keeping promises. And
frankly, I think that last week!,s efforts may have been
the shadow talked about that was required to get the
speaker to take this very seriously, sit down with all
interested parties, because, frankly, we understand as
well. We can!,t always have our way, but we would
like to have a clear leadership strategy communicated,
and we would all like to stick to the same plan.
MARGARET WARNER:
Congressman, what!,s your
take on this, on why your Republican majority!,s
come
to this
passage right now?
REP. MARGE ROUKEMA, (R) New Jersey: I don!,t quite
know how to answer that. First, I!, ve got to say that I was
completely out
of the loop,
surprised, astounded, and more than a little ashamed to see how this
whole
so-called
coup hit the press and hit the public. I can!,t speak for my
colleague
here. He has to
explain his own thought process. But for me looking at the outside,
I!,m
saying to one
extent I agree with him--and that is that our party--and I!,ve been
saying
this for a long
time--that if we!, re going to be a majority party, that we!, ve got
to get
all the elements,
the different caucuses within our party, whether it!,s the right
conservative or the more
moderate element, such as myself, to pull together, to have
communications, to have
alliances, and to form consensus. We can!,t be a minority regional
party.
But the real problem, as I see it, is the fact that this erupted the
way it did at a time when the public is looking to ask, to carry
out that agenda that my colleague talked about, and right now
we have the budget agreement and the tax bill that are going
through negotiations And that was our commitment; that we
would behave like a majority party in a professional and
businesslike way, and get the legislation that belongs to the people
passed and signed
into law. How can we do this to ourselves? A civil war has erupted
and is
bordering on
cannibalism.
MARGARET WARNER: Congressman Salmon, what!,s your answer to that? I
mean,
did you all think about the timing, given what!,s on the table in
terms of
your
negotiations with the White House and the agenda?
REP. MATT SALMON: Again, I completely agree with what she has said. I
don!,t
believe the timing was good. And frankly, my timing all along has
kind of
been wait and
see through the August recess, see if we can get our act together,
see if
our leaders will
lead, and stop appearing to bow down to the pressures exerted by Bill
Clinton and the
media. I was in a "wait and see" mode, and frankly, as I mentioned
earlier
in this
conversation, that was not my time frame.
MARGARET WARNER: All right. Former Congressman Walker, you!, ve been
through a lot of battles, I!,m sure, on the Hill, but have you ever
seen
anything like this,
and why do you think this is happening?
FORMER REP. BOB WALKER, (R) Pennsylvania: Well, we
haven!,t seen anything quite like this for a
long, long
time in the
Congress, probably going back into the early part
of the
century, but I think what!,s happening here is
that you
have a
period of time in which people are not seeing it
all
come
together in exactly the same way. I believe that
the
agenda
outlined by Matt Salmon a minute ago is exactly what the speaker!,s
attempting to do.
He!,s attempting to get a tax cut. He!,s attempting to get spending
cuts.
He!,s attempting
to get entitlement reform. He!,s attempting to balance the budget,
why we d
o all that,
but he also recognizes you have to negotiate in a way that brings the
Senate on board
and ultimately the best way to get all that done is to have the
President
sign it. That
means making some compromises along the way, and it has not been
clear all
the time
that people were prepared to do some of the compromising that was
necessary to get
the job done.
MARGARET WARNER: Congresswoman, when you heard your colleague, Mr.
Salmon, Congressman Salmon, outline his view of what he wants and the
way
he wants
Gingrich, Speaker Gingrich to lead, and he talked about standing on
the
steps back
before the !+94 election, the Contract with America, is that
compatible
with what you!, re
looking for and moderates, if I can call you that, like yourself?
REP. MARGE ROUKEMA: Well, yes and no, I guess.
Perhaps his precise interpretation of what the Contract with
America meant is a little different from mine, but, in general,
we all agreed to that, or at least we agreed to have a full and
open debate on all these issues, and I think that has been
done. It doesn !,t mean that we can be successful in every
particular. For example, I voted against a couple of them: the
line-item
veto for one.
But we did have a full and open debate.
But I think we !,ve got to move away from that right now and focus on
what
our job is
now and maybe use the example of this disaster relief bill and then
the
NEA, for
example, the National Endowment for the Arts, and the way that was
handled.
I think
we !,ve got to be very careful from the leadership on down where we
draw
the line in
the sand. By that I mean for the general public to understand
politicians
always want to
draw lines in the sand and say this is our last offer; we !,re not
going to
compromise
beyond this. We !,ve got to be careful when we draw that line in the
sand.
I think the
disaster relief bill was totally mishandled. No way that I could
agree
with drawing that
line in the sand, and yet, there are wide disagreements within the
conference, but in the
end, we could not turn our backs on those poor people that are out
there
suffering.
That !,s an example of what I mean, but I think that the
responsibility is
with the
leadership to bring us together to have communication. They
haven !,t;
they !,ve been
playing us against each other, I !,m afraid.
MARGARET WARNER: Congressman, what are you looking for now? I mean,
is this
over, is it over for now? What are you looking for from the
leadership?
REP. MATT SALMON: It !,s never over. We always have
responsibility to keep on fighting for the things
that
we believe.
But I do believe that most of us--myself
included--are
in a
mode of let !,s try to heal; let !,s take what
happened
last week;
let !,s try to make the best of it. I use the old
adage
when life
deals you a lemon, try to make lemonade. I think
that !,s where
we !,re at right now. We have to make something positive come of
this.
What !,s at stake
here is not just some political game of chess. The future of our
country
is at stake here.
We can !,t afford to let petty differences get in the way.
MARGARET WARNER: All right. But are you open to the kind of
pragmatism that
Mr. Walker and the congresswoman are talking about in terms of
negotiating
with the
White House and so on?
REP. MATT SALMON: You know something. I hear what you !,re saying,
but
frankly,
we !,11 never know if we would have been able to win the fight if we
keep
taking a dive
in the first round. And that !,s the way I see it. That !,s the
problem with
the last six or
seven months, is that we have not carried through a fight to its
fruition.
And, frankly, I
look back at one of the greatest leaders in my mind of this
century, and that !,s Ronald Reagan. If when he went to
negotiate with Gorbachev on the nuclear disarmament, when
Gorbachev said, okay, you do away with SDI and then we !,11
talk about nuclear disarmament, if President Reagan would
have said, okay, well, I guess pragmatism should kick in now
and maybe to get something I should give that up, the Berlin Wall
would
still be up.
MARGARET WARNER: Mr. Walker, do you think--David Broder, The
Washington Post columnist, had a column this morning saying, given
the
narrow
governing majority, it !,s very hard to bridge this gap that we just
heard
from these two
members. What !,s your assessment of that?
FORMER REP. BOB WALKER: It !,s hard to bridge the gap because, I
mean,
people
want to get as much as they can, and really within the caucuses you
fight
for that. I was
always one of the people in--among the conservatives on the Hill who
fough
t for getting
as much as we could of the conservative agenda. The question is
whether or
not you
move in the right way all the time, and it seems to me when you !,re
getting tax cuts,
when you !,re getting a balanced budget, when you !,re getting
spending
cuts, when
you !,re getting the entitlement reforms, that !,s moving in the
right
direction, and you need
to keep the majority in order to do that. And the one thing that
Republicans seem to
agree on is the fact that they need to be doing those things that
ultimately allow them to
keep the majority and expand the majority so that they can continue
down
the path.
The only real pressure on Bill Clinton and Democrats is the fact that
there are
Republican majorities in both the House and Senate, that set the
agenda
and force the
country to move in more conservative directions. And hopefully, all
Republi
cans can
agree that that !,s a plus.
MARGARET WARNER: Let me ask you something else,
because I know you still talk to the speaker. How
does
he
personally see this? Does he feel betrayed, and
how
does he
feel it !,s affecting his ability to negotiate
with the
White House?
FORMER REP. BOB WALKER: Well, I think he !,s hurt
because of some of the personal relationships on
it,
but he is
very much focused on getting deals done that he thinks will define
the
long-term
prospects for the party. If we get the tax cut for the American
people,
if, in fact, we
manage to do all those things, he thinks that that !,s what they will
end
up focusing on
and that those will be the right things to have done.
MARGARET WARNER: But do you think this weakens him and his
negotiating?
FORMER REP. BOB WALKER: No. It !,s strengthening.
In
fact, he !,s strengthened by what took place here
because it
becomes clear that some of the rest of the
leadership
wasn !,t
ready for prime time and that the only people that
the
White
House could really deal with are Lott and Gingrich
at
this point
in hopes of getting the deal. So I think for the
moment
that he !,s
strengthened by all of this and that the White House will see him as
the
player that they
have to deal with.
MARGARET WARNER: Congressman, you have a meeting, you and your fellow
sophomores, tonight at 8, and there !,s also a Republican conference,
all
Republican
House members tomorrow. What are you looking for in both of those
meetings?
REP. MATT SALMON: I think we need to have a lot of
open dialogue and we need to get beyond the good-sounding
happy-faced rhetoric; we need to cut down between all the
muck and the mud; and we need to talk to one another. We
need to stand one another, and we need to realize that at the
end of the day we !,re friends. And we need to realize that at
the end of the day we have the same objectives, and we need to fight
side
by side,
instead of at one another !,s throats.
MARGARET WARNER: And, Congresswoman, briefly, do you see that
happening?
REP. MARGE ROUKEMA: I certainly will do everything I can to urge that
that
happened. I think that we have got to tell the leadership that
we !,ve all
got--that they
have got to by their own example show us how we can pull together and
get
this
agenda accomplished. And I must say that I think the budget and the
tax
program that
we !;re working on is a powerful agenda, and it !,s a powerful
message back
home, and
it !,s something that we should be proud of. I don !,t see how we
caved in
on that. I think
it !,s an accomplishment. And it !,s about time that we report back
to the
American
people in that vein.
MARGARET WARNER: Okay. Thank you both very much. Mr. Walker, thank
you.
FORMER REP. BOB WALKER: Thank you.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Dag Vega@EOP@LNGTWY@LNGTWY (Dag Vega@EOP@LNGTWY@LNGTWY [ WHO 1)
CREATION DATE/TIME:28-JUL-1997 09:04:09.00
SUBJECT: CNN: Late Edition, 7/27/97
TO: Michael Waldman@eop (Michael Waldman@eop [ WHO ])
READ:UNKNOWN
TO: Barry J. Toiv@EOP ( Barry J. Toiv@EOP [ WHO 1)
READ:UNKNOWN
TO: Darby E. Stott@eop ( Darby E. Stott@eop [ WHO ])
READ:UNKNOWN
TO: Joshua Silverman@EOP (Joshua Silverman@EOP [ WHO ])
READ:UNKNOWN
TO: Stuart Schear@eop ( Stuart Schear@eop [ WHO ])
READ:UNKNOWN
TO: steven j. naplan@eop (steven j. naplan@eop [ NSC ])
READ:UNKNOWN
TO: Kevin Moran@eop ( Kevin Moran@eop [ WHO ])
READ:UNKNOWN
TO: Lorraine L. Wytkind@eop (Lorraine L. Wytkind@eop [ WHO )
READ:UNKNOWN
TO: GN. Lattimore@eop (GN. Lattimore@eop [ WHO ])
READ:UNKNOWN
TO: Angus S. King@eop ( Angus S. King@eop [ WHO ])
READ:UNKNOWN
TO: Daniel J. Gunia@eop ( Daniel J. Gunia@eop [OA])
READ:UNKNOWN
TO: Jason S. Goldberg@EOP ( Jason S. Goldberg@EOP [ WHO 1)
READ:UNKNOWN
TO: Karen E. Finney@eop (Karen E. Finney@eop [ WHO ])
READ:UNKNOWN
TO: Rahm Emanuel@eop (Rahm Emanuel@eop [ WHO )
READ:UNKNOWN
TO: Michelle Crisci@eop (Michelle Crisci@eop [ WHO ])
READ:UNKNOWN
TO: Jill M. Blickstein@eop ( Jill M. Blickstein@eop [ OMB ])
READ:UNKNOWN
TO: [email protected]@INET@LNGTWY ([email protected]@INET@LNGTWY [ OSTP ])
READ:UNKNOWN
TO: Lorraine A. Voles@ovp@eop ( Lorraine A. Voles@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Virginia M. Terzano@ovp@eop ( Virginia M. Terzano@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Gene B. Sperling@eop ( Gene B. Sperling@eop [ OPD ])
READ:UNKNOWN
TO: Laura D. Schwartz@eop ( Laura D. Schwartz@eop [ WHO ])
READ:UNKNOWN
TO: Christa T. Robinson@eop ( Christa T. Robinson@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Alison Muscatine@eop ( Alison Muscatine@eop [ WHO ])
READ:UNKNOWN
TO: April Mellody@eop ( April Mellody@eop [ WHO ])
READ:UNKNOWN
TO: Julie E. Mason@eop (Julie E. Mason@eop [ WHO ])
READ:UNKNOWN
TO: Heidi Kukis@OVP@EOP (Heidi Kukis@OVP@EOP [ UNKNOWN ])
READ:UNKNOWN
TO: Russell W. Horwitz@eop (Russell W. Horwitz@eop [ OPD ])
READ:UNKNOWN
TO: Julia R. Green@eop (Julia R. Green@eop [ WHO ])
READ:UNKNOWN
TO: Jeremy M. Gaines@eop ( Jeremy M. Gaines@eop [ WHO ])
READ:UNKNOWN
TO: Paul K. Engskov@eop ( Paul K. Engskov@eop [ WHO ])
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Message Creation Date was at 28-JUL-1997 08:49:00
Late Edition with Frank Sesno:
LATE EDITION With Frank Sesno For July 27, 1997
Aired July 27, 1997 - 12:00 a.m. ET
ANNOUNCER: Live, from CNN in Washington, this is LATE
EDITION, with Frank Sesno.
SESNO: It's Sunday, July 27, 1997. Welcome to LATE
EDITION, seen live every week at this time across the
United
States and around the world.
Week Three of the money trail hearings on Capitol Hill
here
in
Washington, the spotlight focusing on Republicans,
including
Haley
Barbour, former chairman of the Republican National
Committee.
The big question: was overseas money used to fund GOP
campaigns back in '94? We'll get the inside view from
two who
were very much in the hearing room.
Then, a roaring economy in the U.S. as the stock market
hits
yet
another high. That and the ongoing budget talks in
Washington. Will
they get a deal, and what will it mean for the
pocketbooks
of U.S.
taxpayers? Q&A with Gene Sperling, chairman of the
president's
National Economic Council.
Later, round the table with Roberts, Page and Blankley.
And Bruce Morton has the "Last Word" on Newt Gingrich
and the
vision thing.
(NEWS BREAK)
SESNO: Following the money trail this week, allegations
that
the
Republican Party funneled money from overseas into their
congressional races back in '94. Those allegations took
center stage
in the hearing room. Former Republican Party chief
Haley
Barbour
was on the defense. In a minute, we will talk to two
key
players
who are on that committee. First, some background.
(BEGIN VIDEOTAPE)
SESNO: Barbour went before the committee and insisted
that he
did not know that a loan guarantee to his tax-exempt
National
Policy Forum came from a company in Hong Kong. And he
denied
that the money eventually made its way into
congressional
campaigns in the 1994 elections, the critical elections
that
put the
Republicans in power on Capitol Hill.
HALEY BARBOUR, FORMER CHAIRMAN, REPUBLICAN
NATIONAL COMMITTEE: The first and most important fact is
that the national -- is that everything the National
Policy
Forum did
was legal and proper, everything, and everything about
the
Republican National Committee's relationship with the
National
Policy Forum was legal and proper.
Two weeks ago, in these hearings, it was said repayment
this
repayment -- allowed the RNC to finance the Contract
With
America campaign in 1994. A news magazine said the
repayment
allowed the RNC to pay for its late advertising blitz
to win
control of
Congress. Those statements are both wrong.
It was said yesterday that foreign money went to
congressional
candidates. That statement is also wrong.
SESNO: But at the end of the week, former GOP chairman
Rich
Richards said otherwise.
BARON: Did you advise Mr. Barbour at this time in the
course
of
describing the transaction where the ultimate source of
the
money
would come from that would be posted as collateral with
the
bank?
RICHARD RICHARDS: Well, the only thing I told is the
money
would be transferred from Young Brothers Hong Kong to
Young
Brothers USA for that purpose. Frankly, I never thought
I
would
see the time in my lifetime that Republicans won the
House
majority.
But he told me that was the case and said we have a
problem.
We
at the national committee have loaned the Forum three
million --
$3.3 million, some amount in excess of $3 million, of
money
that we
can use in the campaign. But we've got a problem. We
need to
be
able to take it out of the Forum for our purposes.
SESNO: Well, joining us now, two watching the hearings
on the
inside and participating -- Republican Senator Bob
Bennett
from
Utah, a member of the Government Affairs Committee, and
Alan
Baron, chief Democratic counsel to the committee. You
saw him
questioning a witness just a moment ago.
Gentlemen, welcome to you both. Thanks very much for
coming
in.
BENNETT: Thank you.
BARON: Nice to be here.
MORE XXX to be here.
SESNO: Mr. Baron, let me start with you. Everything the
National
Policy Forum did was legal and proper, said Haley
Barbour.
That's
what we heard him just say. That's what you heard him
say,
both of
you, all week long. Do you have a problem with that?
BARON: Well, if you accept the premise that, as Mr.
Baroody
said
in his testimony, that it was a fiction that there was
a
separation
between the NPF and the RNC, and if you accept the
proposition
that the RNC can't accept foreign monéy, which seems
clear
that's
where the money ultimately arose, it raises serious
questions as to
whether this was legal and proper.
SESNO: And he says common sense would dictate that I
wouldn't
do something as dumb as this. He's a smart man, and he
laid
it out
there, acknowledging that his nephew wrote -- poorly
wrote a
memo, but presenting what would have seemed to many a
fairly
credible case.
BARON: Well, Mr. Baroody I thought was probably one of
the
most impressive witnesses I've ever heard. He was the
president of
this organization right from the start.
SESNO: Of the National Policy Forum?
BARON: The National Policy Forum. And he felt he had to
resign
after a year because he felt it was a fiction that
there was
a
separation between the RNC and the National Policy
Forum. I
think
that's a pretty powerful indication that something was
wrong.
SESNO: Senator Bennett, does this cause you heartburn?
BENNETT: No, it doesn't. The National Policy Forum was a
mistake. I said that in the hearings. It was not one of
Haley's better
ideas.
But you've started this out with follow the money
trail. If
you follow
the money trail, the money goes from the RNC to the
National
Policy Forum. Now, the National Policy Forum becomes,
as
Haley
said, a siphon of money out of the RNC. The money comes
from
the Young Brothers organization, back to the National
Policy
Forum, and some of it comes back to the RNC.
But when you get at the bottom line and balance the
books,
this
whole activity at the National Policy Forum cost the
Republican
National Committee well over $2 1/2 million.
SESNO: The whole
BENNETT: That doesn't sound to me like a very smart way
to
get
foreign money into congressional campaigns.
SESNO: The whole question here is did that money from
overseas
come into congressional campaigns here.
BENNETT: The answer is clearly no.
SESNO: The answer is clearly no?
BENNETT: Clearly no.
SESNO: Clearly no?
BARON: I'm afraid I have to disagree. It's very clear
that
the
money in the last couple of weeks before the election,
$1.6
million,
was freed up, made available to the RNSEC. They put it
into
the
state parties, and they were able to use that money,
even if
it was
only as soft money. But they can get out the vote, they
can
do a lot
of work on behalf of candidates generally, even though
they
might
not be able to use it for a specific campaign.
BENNETT: And that's the key. They cannot use it for a
congressional campaign.
The money must be separated into two very clear
accounts. If
you
take any money from the account that's a state account
and
allow
one dollar of that to leak into the account that's for
federal accounts,
the entire second account is tainted. And everybody who
is
involved
in raising and handling political funds know that. The
deposit slips,
the money trail, if you follow it carefully, will make
that
very clear.
And I raised that issue directly with Dick Richards.
And I
said to
him, do you have any personal knowledge that would
cause you
to
doubt what Haley Barbour said about the separation of
these
funds.
And he said no.
SESNO: We're going to talk
BENNETT: I said, do you think Haley Barbour perjured
himself
when he said it didn't happen. And he said no, under
oath.
SESNO: You asked about perjury. So let's talk about
credibility for
a moment. Haley Barbour said -- testified that -- I'm
sorry,
Rich
Richards did testify that Barbour told him that this
loan
was urgent.
Let's talk about Barbour's credibility.
BENNETT: Yes.
SESNO: Michael Baroody testified that the separation
between
the
National Policy Forum and the RNC was a fiction.
SESNO: Haley Barbour says, sure, I was on a ship off
the
coast. I
was talking to Ambrous Young. I didn't know his
business was
from
Hong Kong. Is this credible? Is he credible?
BENNETT: That's not what he said. I think he said he
was not
aware
SESNO: He also thought that Ambrous Young was a U.S.
citizen,
didn't he?
BENNETT: Which I think he was at the time they first
met. He
Ambrous Young gave up his U.S. citizenship during this
whole
process. But at the time that contributions had been
made
from the
Young Brothers previously to the Republican National
Committee,
Ambrous Young was a U.S. citizen as were his children.
SESNO: Ambrous Young also told him, according to
testimony,
that if there was -- that he was going to have to check
this
thing out
with his Hong Kong board of directors.
BENNETT: That's correct.
SESNO: And when it was default time, it needed to be in
conjunction with Hong Kong laws and regulations in
terms of
what
was happening to that money. How could he not have
known?
BARON: One thing's clear. Ambrous Young gave up his
citizenship
around the end of '93, and the discussions began
sometime in
the
summer of '94. So I think that by the time the
discussions
were
under way, he had given up his citizenship.
I took Ambrous Young's deposition in London. And I can
tell
you
that Ambrous Young speaks very good English. I had no
problem.
If you read the transcript of the deposition, it's very
easy
to
understand.
I spent two days, one day interviewing the man in the
company of
majority counsel also. He speaks very good English.
It's very
difficult to believe anybody couldn't understand him.
SESNO: To the Democrats now and next week. This coming
week
in the hearings the committee starts to look at a man
by the
name of
Charlie Trie. Who is he? What is the committee going to
get
at?
Senator.
BENNETT: Well, Charlie Trie is a restaurant operator
out of
Arkansas, Little Rock, who befriended the Clintons when
Bill
Clinton was governor, and then ended up either giving
himself in his
own name or shepherding hundreds of thousands of
dollars,
which is
clearly beyond what he had the ability to give out his
own
pocket.
SESNO: Illegality here, do you believe?
BENNETT: Well, we're just going to have to look at it.
There, I
think, is certainly some clear irregularities. Whether
they
became
illegal or not, we'll have to find out.
SESNO: Mr. Baron, is this giving you heartburn?
BARON: Well, I wish I knew a little bit more about what
was
coming up. We've gotten a witness list of about a dozen
witnesses.
We're not clear who's coming up at what time.
But I think there are going to be some -- there's going
to be
evidence of impropriety, things that are going to raise
serious
questions about what went on. And it should be raising
serious
questions in everybody's mind about what are we going
to do
about
it.
The ultimate end game in this whole process ought to be
campaign
finance reform. It's not enough to just point to this
and
just say, gee,
that's a terrible thing. Maybe some people ought to be
prosec
uted.
SESNO: Today in The Washington Post, "Donor Contradicts
White
House," talking to the L.A. Times as well, another man
caught up in
the Clinton and the fundraising controversies -- Johnny
Chung. Now
he says that contradicting accounts by the Clinton
administration --
I'm reading from The Washington Post today -- one of the
Democratic Party's biggest campaign donors said he gave
$50,000
check to the first lady's chief of staff in direct
response
to
solicitations.
This is a quote from Johnny Chung: "I see the White
House as
like a
subway. You have to put in coins to open the gates."
Senator, what
do you make of this?
BENNETT: That's a great sound bite for the Republicans.
I
think
this is part of the whole pattern that we're looking at
here. And
I've said right from the beginning I see a dichotomy
between
that
which is strictly legal, but frankly, inappropriate and
offensive but
nonetheless legal.
And it may be that this is in that category. I think
the
selling of the
Lincoln Bedroom is in that category. I think it's
probably
legal, but
to me, it's very offensive. And I don't think we've see
n
anything
approaching that in American politics in the past.
Then you get to the other section, which is that which
is
clearly
illegal, and how far does that go. And that, of course,
is
what
bothers me about some of the things that some of the
Democrats are
saying that says we must get beyond this and get to
campaign
finance reform.
Let's not get beyond it if there are clear illegalities
that
have gone
beyond anything we've had in the past, and let's not
paper
over
those and say, well, let's rush to pass a law and not
pay
attention to
that. And that's the question we need to decide, which
side
of the
line this kind of thing falls on.
BARON: Well, I certainly am not suggesting that we rush
past
the
illegalities and go on to reform without exploring
them. I
think that
absolutely has to be done. It's certainly been Senator
Glenn's
position throughout this. But to see that as the end
game, I
think, is a
mistake.
The Department of Justice will take care of the
illegalities. I firmly
believe that.
BARON: I think we're going to see a whole raft of
indictments
coming out this fall.
SESNO: Mr. Baron, wouldn't you acknowledge, though,
that
while
the Haley Barbour show this past week was interesting
and
maybe
have been insightful into one particular practice or
one
particular
incident, that the Johnny Chung, Charlie Tries, John
Huangs
-- the
picture that is painted is predominantly a picture that
is
painted on
the Democratic side, that the problems principally are
on the
Democratic side, and when are the Democrats -- when
will you,
Mr. Counsel -- step up and say, OK, there are problems,
illegalities, and we've got to pay the consequences?
BARON: I think the Democrats have said that. They have
said
that.
And I...
SESNO: You're still talking about politics. You're
talking
about
non-cooperation from the Justice Department. There are
a lot
of
things that people say here are distractions from that
fundamental
message.
BARON: No, I don't really agree with that. I think
Senator
Glenn
and the other Democrats recognize that there may be
greater
abuses
coming out on the Democrat side. They have to be
addressed.
They
have to be looked at very, very carefully. And if there
are
people
who have committed illegalities, they should be
prosecuted.
SESNO: Is Johnny Chung going to testify?
BENNETT: I don't know. I don't have the witness list in
front me
any more than counsel does. We gather the night before
and
sit
down and talk the thing through. And Chairman Thompson
says
to
us this is where we are. And frankly, I leave him alone
until that
happens. He doesn't need any badgering from me.
SESNO: All right, gentlemen. Thank you very much. Alan
Baron,
Senator Bennett, I appreciate your time today.
Well, when we come back, we shift gears and turn to the
latest on
the budget negotiations. There may be a tax cut for
U.S.
taxpayers
somewhere in there. And we'll have Q&A with the
president's
economic policy chief, Gene Sperling.
And later, we'll go round the table with Blankley, Page
and
Roberts.
Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
WILLIAM J. CLINTON, PRESIDENT OF THE UNITED
STATES: Even though there are differences which are
clearly
and
publicly stated between the White House and the
Republican
leaders and, to some extent, also clearly stated
between the
Democrats and Congress and others, I think we're going
to
get this
agreement.
(END VIDEO CLIP)
SESNO: Welcome back to LATE EDITION. Budget negotiators
here in Washington in the trenches all day yesterday
emerging with a
promise that they were inches away from a final deal on
how
much
they'll spend, how much they'll cut Americans' taxes
and
spending.
Joining us now to discuss the budget negotiations, the
director of the
-- the president's national economic adviser -- I'm
sorry,
let me get
that right, Gene Sperling. Have I got it right?
SPERLING: That sounds fine.
SESNO: OK, just fine. Joining me in the questioning,
Susan
Page,
USA Today. We want to tell you that we'll be taking
your
calls and
questions for Gene Sperling in just a few minutes.
We'll
also be
talking to him about the stock market. So if you've got
some
questions or thoughts, jot down our phone number and
try to
give us
a call.
SESNO: Mr. Sperling, let's start with the budget
negotiations. You
met all day yesterday. How close to a deal is to
balance the
budget?
SPERLING: I think on the spending side, on the spending
cut
side,
on the important issues of welfare, Medicaid, Medicare,
I
think a
significant amount of progress has been made. A lot of
issues have
been narrowed or closed. There are still some tough
issues
like
children's health care that are out there that are not
resolved yet.
On the tax side, there has been a lot of discussion,
some
progress,
but we're not quite there yet. So I can't give you a
prediction on
timing. We want a good deal.
SESNO: Days, weeks, months?
SPERLING: Our goal is a good deal, a true balanced
budget
plan
that is good to the middle class, strong for education
and
health
care. When we have that good deal, we're ready to sign
on the
dotted line.
SESNO: A shot across your bow earlier today from Senate
Majority Leader Trent Lott. You've been negotiating
with
him. He
was out on one of the programs, talked this morning.
Take a
look at
what he had to say.
(BEGIN VIDEO CLIP)
U.S. SENATOR TRENT LOTT (R-MS), SENATE MAJORITY
LEADER: I think right now what we need is the president
to
engage
some. He has got to be prepared to make some
concessions to
get
some.
I realize that he's on the West Coast, but we're at a
point
after our
meeting ended last night about 6:30 where the president
needs to
step in and say, yes, this is important. We're not
going to
use this for
political positioning.
(END VIDEO CLIP)
SESNO: All right, the president needs to engage some,
some
more
presumably. Will he do it?
SPERLING: The president is fully engaged
SESNO: No, he's out on the West Coast now, says Senator
Lott.
SPERLING: Oh
SESNO: That's not good enough.
SPERLING: Frank, the president is fully engaged. We are
in
constant conversation with the president. He has
delegated to
Erskine Bowles, his chief of staff and the rest of us
who
are on the
negotiating team, to do the actual negotiation. But we
are
there
speaking for the president with specific instructions
from
him on
what we can do and what we can't do.
SESNO: Will the president come rushing back to get a
deal if
that's
what it took?
SPERLING: That really should be unnecessary. But I'm
sure
this
president will do whatever he needs to. He's the one
who got
this
process started. He's the one who created the
atmosphere for
bipartisan negotiation -- as you know, made the first
gestures on
Medicare to break the log jam, got the first
negotiations
started
initially and has been there every step of the way.
Now, the president sometimes delegates to his secretary
of
state or
his chief of staff to do actual negotiations because he
is
the president
of the United States. But he is fully engaged. We spent
pr
obably
two hours with him Friday night going over every little
thing. When
we went back Saturday, we were there speaking for the
president.
SUSAN PAGE, USA TODAY CORRESPONDENT: Let's go to
some of the specifics that Republicans say are now
settled
in these
negotiations. One is the issue of capital gains. The
Republicans are
signaling that the issue of -- they're willing to give
up
indexing of
capital gains if the president is willing to sign on to
a 20
percent
capital gains tax rate. Is that the deal?
SPERLING: Well, Susan, I'm not going to sit here and
talk
about
exactly where we are. I think what is the case is that
the
president
has made very clear what are the things he has to have
in an
agreement. And he has to have the higher education tax
cuts
PAGE: The Republicans say they understand that the
president
has
a bottom line, but that they have a bottom line, too,
and
that their
bottom line is the 20 percent tax rate. Is that an
acceptable rate on
the president's part?
SPERLING: I think we have to see what the whole deal
looks
like.
I think the president understands that that is probably
the
single-
most important thing to them, and he will take that
into
account. But
we need to make sure first of all that there is no
explosion
in the
out-years.
You know, as we get to that second 10 years, that's
when we
need
all the revenues we can for Medicare and Social
Security. So
we
have to look at the whole package, and make sure when
you
look
at the things that they've been fighting for in terms
of
capital gains or
estate tax and other things, that the whole package as
a
whole does
not explode in the out years.
SESNO: Mr. Sperling, though, isn't...
SPERLING: some of the good, the great good that
we're
going
to do with this agreement.
SESNO: Isn't it true though that the president has
accepted
a 20
percent capital gains for the top income earners in
this
country
presuming he gets some of these other things that
you've
laid out?
SPERLING: Frank, nothing is agreed to until everything
is
agreed
to.
SESNO: Hasn't he agreed to that in principle with you
and his
advisers?
SPERLING: Frank, I've spoken.
SESNO: Turn to Medicare. You've taken the long-term fix
off
the
table of Medicare, so-called means testing. If you make
more,
you're
a senior citizen in this country, you pay more for your
health care
coverage.
Go ahead.
SPERLING: Frank, we have not taken that off the table.
And
I'll
say right now, today, here, we want to do high-income
premium
proposal. We think it's the right thing to do.
SESNO: As part of the budget deal?
SPERLING: We would like to do it as part of the budget
deal.
If it
can't get done, if it cannot be accepted by folks in
the
House, that's
too bad. But I want to make clear, we not only think
it's OK,
we
not only would accept it, we support it, we're
advocating
for it. We
think it's a good reform.
What it does is it helps keep Medicare together with
this
overall
package on a long-term sustainable path.
SPERLING: And it says that just our higher-income
Americans
should have less of a subsidy so that we can keep the
deficit down
and keep the overall Medicare program solvent for the
tens of
millions of older Americans who rely on it.
SESNO: How about raising the age of eligibility?
SPERLING: Raising the age of eligibility is a serious
issue
that
unquestionably has to be looked at, I think, for the
long
term. I think
the proposals put on the table so far have fallen
short,
because they
have no plan to ensure we don't lose coverage.
We don't want to increase the number of older Americans
who
lose
coverage. That's a step backwards. Maybe at some point
in the
future there's a way that they can deal with an older
retirement age
that makes sure that people 65 and 66 still have health
care
coverage.
But until the president is sure of that or have
hearings
that make sure
that that's going to work out, we shouldn't take any
risks
in that
area.
PAGE: The Senate budget chairman, Pete Domenici, said
this
morning that a cigarette tax is part of the deal. Is
that
correct?
SPERLING: We are certainly pressing in every way for a
cigarette
tax as part of this deal. There is no question. As you
know,
3,000
kids a day start smoking; 1,000 of them will die a
premature
death.
A cigarette tax has its best effect on young children.
They're the
ones where the extra 20 cents might deter them from
buying
that
extra pack.
PAGE: Will the money go to the children's health
initiative?
SPERLING: Let me just put it this way. We are pressing
for a
cigarette tax, and we are pressing hard for the 24
billion
to cover up
to five million in children's health care. I don't care
how
-- whether
you say they're connected or they're just both in
there. We
should
have a cigarette tax to 20 cents to deter smoking of
young
children, and we should have a children's health care
package of up
to 24 billion so we can try to cover five million of
our
young children
who go without needed medical care.
SESNO: Mr. Sperling, isn't it the case that the White
House
is
feeling the pressure to reach a budget deal if you're
going
to do it,
and to do it this week, because if not, there's concern
about the
signals to the markets and losing momentum, even as
your own
budget estimates show that the deficit is coming down
of its
own
free will because of this economy?
SPERLING: I agree with part of that.
We're not in any hurry at -- in terms of this. Today,
tomorrow, this
week, we're not going anywhere. We're here. We want to
get a
good deal.
If we can get that good deal, then soon, fine. If it
takes a
little
longer, that's also fine with us.
But you make a very important longer-term point. There
are
some
out there who are saying that because the 1993
deficit-reduction
plan the president passed has been so successful in
strengthening
this economy and because we've seen the deficit fall so
much, that
now we should say to the market and everybody, we're
complacent, let's go back and hope for rosy scenarios,
maybe
the
budget will balance on its own.
But what you're saying is exactly right. If we sent
that
message, we
would be saying to the markets that we're going to have
two
years
of gridlock. That would, I think, hurt investment, hurt
interest rates,
and I think that would start to undo this economy.
Our belief is that without this plan, the deficit will
go up
significantly
in later years.
SESNO: OK. On that point, we'll come back, and when we
come
back, you'll be interested in this one. Just in Time
with
Adam
Zagorin on the Wall Street doomsday scenario. And more
questions
with the president's national economic adviser. He'll
take
your calls.
We'll be right back.
(COMMERCIAL BREAK)
SESNO: And welcome back to LATE EDITION. The president's
national economic adviser is still with us, but he'll
want
to hear this
first. It has to do with that raging bull market on
Wall
Street, and
actually on markets around the world.
But this week, Just in Time with correspondent Adam
Zagorin,
from
our sister publication Time magazine.
Adam, the Dow's over 8,000, but you were reporting in
this
week's
issue of Time magazine some anxious planning going on.
What's
going on here in Washington?
ADAM ZAGORIN, TIME MAGAZINE CORRESPONDENT:
Well, around town, very quietly, people are planning
for the
worst
and hoping for the best. They don't like to talk about
it
very much,
but some of the most senior officials in the
government,
Treasury
Secretary Bob Rubin, Alan Greenspan, and others, heads
of the
SEC and CFDC, the Commodities Future Trading
Commission, are
quietly laying the groundwork in case markets should
become
disorderly for whatever reason.
No one wants to talk about it. No one wants a
self-fulfilling
prophecy. But they're getting ready. And they have been
getting
ready for months now.
SESNO: What does it mean? What does that entail,
getting
ready?
What would they do?
ZAGORIN: Well, they don't know precisely what they
would do,
because they always say that each financial crisis has
its
own unique
qualities.
ZAGORIN: But essentially, if there were a major break
in the
stock
market, one could expect the Federal Reserve perhaps to
raise
interest rates. What they'd mostly
SESNO: Raise interest rates or
ZAGORIN: Excuse me, lower interest rates, and zero in
particularly
on any financial institutions that were experiencing
liquidity
problems. And they might perhaps be prepared to make
emergency
loans or funds available to those institutions, keep
the
flow of money
going, keep markets open, reduce panic and allow the
market
to
recover of its own natural equilibrium.
SESNO: Finally, two points and very briefly, Adam, if
you
would.
First, is there any real anticipation that something
terrible or some
kind of a doomsday scenario is imminent? And secondly
or
even
in the immediate future? And secondly, what about the
circuit
breakers that would control this out of the '87 crash?
ZAGORIN: Well, there's nothing on the horizon that
anyone can
see. But crises of this nature are by definition almost
unpredictable.
The circuit breakers can -- the market falls a certain
several hundred
points, the market will stop trading for a half-hour or
hour.
That can essentially only slow the pace of a decline.
If
investors are
intent on selling, the market will go down.
SESNO: OK, Adam Zagorin, thank you very much. Appreciate
your time.
Back to the National Economic Adviser. You just heard
what
correspondent Zagorin had to say.
Talk about this behind-the-scenes planning. As the
national
economic adviser to the president of the United States,
are
you
watching Wall Street and worrying?
SPERLING: Well, first of all, as a result of the 1987
problem, there
were, as you say, circuit breakers and other mechanisms
in
place.
There is a financial markets committee that Chairman
Greenspan is
on, Secretary Rubin, myself as the national economic
adviser
are on.
Certainly, we talk about a whole lot of things, and of
course, try to
make sure that you're prepared for anything that happ
ens.
But that is an ongoing process that happens
periodically.
Those
meetings happen periodically. That has nothing to do --
there's no
urgency or anything new going on because the market's
been
strong.
And quite honestly, I think you could have had the same
conversation when the market was at 5000, 6000, 7000. So
obviously, every investor out there has to make their
best
prediction
on whether they think this bull market would continue.
SESNO: Some say the prettier that Cinderella looks, the
more
you
worry about her turning into a pumpkin.
(LAUGHTER)
Let's go to the phone calls. Susan, we'll let you jump
in
here in just a
minute. But first, a call that seems relevant to both
the
markets and
the budget deal that you're negotiating.
Monterey, California, thanks for calling. Go ahead with
your
question.
QUESTION: Good morning. Despite the economy's
performance,
could a cut in capital gains taxes affect the market's
performance on
Wall Street?
SPERLING: Well, it's hard to know how the market could
do a
whole lot better than it did. I mean, it was at around
3200
in
January, 1993, when we took office. It's over 8,000
now. I
think it's
the first time it ever doubled in a single presidential
term
in the
SESNO: You're not going to take credit for that here,
are
you?
SPERLING: What's that?
SESNO: Are you claiming credit for that?
SPERLING: Well, you know, it's interesting..
SESNO: I don't want to get you off on that. I'm sorry.
Why
don't
you go ahead back to the question.
SPERLING: I think that our view is that the capital
gains
tax cut will
not have a major impact on the economy to the extent
that we
are
going along with it as mostly as part of a bipartisan
budget
deal. If
we thought it was going to have a major positive
impact, we
would
have been proposing it long ago.
PAGE: Let's talk about another proposal for tax
linkage,
which is
the child tax credit, one of the issues under
negotiation
now in these
budget talks. The Republicans would like this child tax
credit
to be available to people of higher income than the
White
House
would like. Are you willing to give on that?
SPERLING: As you know, we have been pressing very hard
for a
child tax credit. The president proposed it in his '92
campaign. He
talked about it in the '96 campaign -- actually in 1994
proposed it.
So certainly we want a children's tax credit.
Ours phased out at $75,000. They would like it to go
higher,
cover
families who are making 80,000, 90,000, in that area.
I'm
willing to
say right here that we would support that, absolutely.
That's not a
matter of theology. That's a matter of finding the
money.
But in covering those children for more upper
middle-class
families,
we are going to absolutely insist that lower-income
families
families making 22,000, 23,000, nurses, first-year
police
officers
and teachers with two kids -- they have to be covered,
too.
They
work hard. They pay payroll taxes. Their employers pay
payroll
taxes for them. They pay federal excise taxes.
SESNO: So can you say that as a result of
SPERLING: They need tax relief, too.
SESNO: But can you say that as a result of these talks,
then, the
administration has gone up in the income range that
you'd
cover, the
Republicans have come down, and you've got an
understanding
now that this is what this child tax credit will cover,
these incomes?
SPERLING: Frank, I think that's a good place for us to
end
up. I
think that way -- the way we're ending up is we're
covering
more
children.
SESNO: Are you there?
SPERLING: I hope we're going to get there.
SESNO: OK. Well, that's going to be a good place for us
to
end up
right here and right now.
MORE XXX and right now.
SESNO: Gene Sperling, thanks very much for coming in.
As
these
negotiations continue, we hope you'll stay in touch
with us
and keep
our viewers informed as to what's happening.
SPERLING: Well, thanks for having me, Frank.
SESNO: Appreciate it. Well, up next, our political
roundtable of
Blankley, Roberts and Ms. Susan Page will take apart
some of
this.
Stay with us.
(COMMERCIAL BREAK)
SESNO: And welcome back to LATE EDITION. Time now to go
round the table with Susan Page, still with us, White
House
correspondent for USA Today; Steve Roberts, columnist
for the
New York Daily News; and Tony Blankley, CNN contributor,
contributing editor for George Magazine as well.
OK, well, we heard the budget discussion here, that
they're
on the
threshold; maybe, kind of, sort of; they're going to
keep
talking
about it. But they've started to move in this way or
the
other. But the
question really is to who wins out of this and who
needs how
much.
I am told, for example, that the Republican rebels who
revolted
against Newt Gingrich a few weeks ago said that they
were
livid
over this indexation thing that Blankley and others
were
about to
give away and that the 20 percent -- what did I say?
BLANKLEY: You said Blankley and others.
(LAUGHTER)
SESNO: Isn't that awful? I meant Newt Gingrich.
BLANKLEY: I'd never give it away.
(LAUGHTER)
SESNO: You'd never give it away. But that their bottom
line
now
with Newt Gingrich -- sorry, Tony -- with Newt Gingrich
was
that
they had to have a 20 percent maximum capital gains on
top-income
earners. Looks like they're going to get it.
ROBERTS: I think they will get it. Look, the winners
here are
everybody who's an incumbent who signs on to this deal.
The
White
House wins. The congressional leadership wins. One of
the
things
that is amazing to me is these Republican dissidents
who you
talk
about.
They can't take yes for an answer. It's basically a
Republican bill. It
is basically Republican principles embedded in this,
and
they keep
complaining that they haven't gotten everything. But
they've
gotten a
lot of what they've wanted. Clinton's playing on their
turf.
I think
they get a lot of credit for it.
PAGE: They not only need a deal, want a deal, but they
need
it
now. I think they need this to come. together this week
before the
Congress goes out on recess, the momentum goes away.
And they
come out with this mid-term deficit forecast in the
middle
of August
that's going to be so low that it's going to prompt a
lot of
people to
say why make a deal.
SESNO: But Tony, we heard Gene Sperling here saying,
well,
you
know, we're not so anxious for this. We'll take it now
if we
can.
BLANKLEY: Let me tell you. I mean, as you know, on this
show
a
couple months ago, I anticipated the president would
eventually veto
the tax bill. I'm still not convinced I'm wrong on
that. The
one group
that doesn't want a deal are the congressional
Democrats.
Now, Clinton doesn't care about Gephardt. I think
that's
pretty
clear. He cares about Daschle. From what I'm hearing,
Daschle is in
a very go slow mood in the negotiations because he
doesn't
want to
have a tax cut, because in fact, for Democrats, they
want to
be able
to challenge the Republican Congress next election.
So
ROBERTS: If you remember, when you said that, I said
you were
wrong. And I still say you're wrong, because
BLANKLEY: And I hope I'm wrong.
ROBERTS: because I think that it's in very much in
the
president's interest to get a deal for three reasons,
Frank.
First of all,
the bill does have some things that he cares about,
like tax
credits on
education. He gets to send a signal to the market. Gene
Sperling
made an important point in your discussion that this
keeps
things
going, you know.
They're saying we're not going to be budget busters.
We're
going to
keep the interest rates low.
And third, he gets to inoculate the Democrats against
the
charge that
they're tax and spenders, which -- I had a conversation
with
the
president about this recently. He said that the
congressional
Democrats are wrong to take the line they're doing.
He's
right by
saying we need a deal that's politically better.
PAGE: But he inoculates himself and he inoculates Al
Gore
SESNO: Al Gore.
PAGE: but he does not -- the degree to which the
president
cares about protecting congressional Democrats, I mean,
I
think
we've already learned that lesson in so have they.
They're
not even
allowed into these negotiations at this point.
BLANKLEY: Well, Daschle's got a voice in that,
absolutely.
But if
you listen closely to the previous guest, while he was
saying, yes, the
deal's set on the spending side, he was leaving a lot
of wigg
le room
when it came to the tax deal.
He said, well, we have to wait for the right deal.
We'll be
around
this week, this month. I didn't sense -- and if I were
a
Republican
negotiator now, I wouldn't take any comfort from the
language
coming out of the administration.
SESNO: Well, Tony, I think you're right. I think that's
exactly what
is motivating Trent Lott to say we're not there yet. We
need
to hear
more from the president. The president needs to engage.
He's
out
on the West Coast, but -- and of course, you heard
Sperling
say,
well, you know, we're
BLANKLEY: Yes, I'm here in the White House.
(LAUGHTER)
ROBERTS: I think this is all negotiating tactics. I
think
this is all to
say we're not in a hurry. That's a way of trying to
push the
ball a
little bit farther to their side. I say within a week th
e
bill is going to
be passed, and the president's going to sign it
happily.
SESNO: Steve Roberts, you wrote something very
interesting
focusing back on the congressional types again. And you
wrote:
"Why are so many people in the caucus" -- the Republican
Congress -- "upset with Newt Gingrich is moving
forward. The
real
unhappiness is about their own reelection prospects in
1998.
Despite the displays of unity this week, they look at
the
year ahead
and see Gingrich as an albatross they can't afford to
carry."
ROBERTS: Well, that's a column that my wife and I wrote
together,
and we talked to a lot of people
SESNO: Who's your wife?
ROBERTS: She's well-known. Actually a little-known TV
performer.
(LAUGHTER)
BLANKLEY: Working for another network.
ROBERTS: Yes, working for another network. And we did
this
column together. We talked to a lot of Republicans on
the
Hill, and
there is a concern. Gingrich's poll numbers are still
low.
They can
write the ads right now. They can see those ads, you
know,
this guy
is a Gingrich clone, try to link them together.
The irony here is that the president needs Newt
Gingrich. At
the
very same time the Democrats are talking about running
against him,
the fact is he needs him. He needs him strong, not
weak. And
he
needs him to make a deal.
SESNO: Tony says -- and let me tell you what one
congressional
Republican told me. He said that at a meeting with the
leadership
last week, the day before that big, you know, mea culpa
session
where Newt read from the Bible, but he thundered that
no one
-- if
anybody tries to vacate the chair again or pull a move
like
that, I will
see that they are defeated with our money.
BLANKLEY: Well, look, I've always thought that Newt was
more
of an eagle than an albatross. And in the end, Newt's
not
popular
around the country.
(LAUGHTER)
But keep in mind, the Democrats tried that in the last
election cycle.
They morphed Newt into every Republican candidate
challenger.
Republicans still won, still got the Congress, over 50
percent of the
vote. Yes, Newt would, I'm sure, love to be vastly
popular.
SESNO: But realistically, what's the albatross
quotient?
BLANKLEY: I see nothing, but eagle feathers.
PAGE: What animal do you think Newt Gingrich is like?
(LAUGHTER)
SESNO: I'm not getting into this. Forget it.
(LAUGHTER)
Is there a reality to this?
PAGE: There's a historical kind of irony to this, which
is
this is going
to be the sixth year of a presidential term. Every time
that's come up
in modern times, the party that holds the White House
has
lost big in
the Congress, especially in the House.
And it's interesting that this doesn't seem to be in
the
works this
time. I mean, we seem to be looking at a situation
where it's
possible that the Republicans could lose their
BLANKLEY: Wait, you say it's not in the works. Now,
while we
don't know what's going to happen
PAGE: Do you think big Republican gains are in the
works for
'98?
BLANKLEY: Well, wait a second. While we don't know
what's in
the future, we can't look that far in advance. So far,
you're seeing
the same pattern you saw in the last elections where
the
Republicans
are doing better in recruiting. They've already got 34
opponents for
the 46 key Democratic target districts. Democrats are
doing
bad in
recruiting. They don't have good candidates. They don't
have
as
many of them. Republicans are raising more money.
All the normal indicators is that the Republicans are
moving
towards
a good election cycle.
SESNO: OK, I've got to jump in. We've got to take a
very
quick
break. We will come back, one more trip around the
table,
after
this.
(COMMERCIAL)
SESNO: And welcome back. One more trip around the table
here
with Blankley, Page and Roberts.
Now, to talk about William Weld, a governor from the
state of
Massachusetts, a Republican -- or so he says. He says
certain
things about the medicinal use of marijuana. And then,
the
president
says why don't you be my ambassador to Mexico.
Well, Jesse Helms has a little problem with that.
Today,
Trent Lott
said this thing is in big trouble, that Weld has shot
himself on the
foot, comments he made not helpful.
Daschle says, on the Democratic side, we're going to
fight
for this.
ROBERTS: Well, of course, Daschle wants to fight for
it,
because
as Tony points out, the Republicans have been
successful in
recruiting in recent years. They've run good
congressional
campaigns. But one of their biggest potential problems
is
being
labelled the party of right wing conservatives in the
same
way the
Democrats were labelled the McGovernite liberals for so
long.
And when Jesse Helms says to Bill Weld, Republican, good
standing from Massachusetts, he's not my kind of
Republican.
There
are a lot of Republicans, including a lot of women, who
look
at that
and say Jesse Helms is not my kind of Republican.
That's a
big
potential problem for the Republicans.
BLANKLEY: You know, I think this Weld business is
fascinating,
because I don't think he's a fool. I think he
understood
what he was
doing when he was -- when he spoke up.
My hunch is -- I don't know this -- my hunch is that
he's
playing a
very long-term game. He's a young man. He may be
looking for
2004, because he can't get the nomination of the
president
with the
current structure of the party. But if the current
structure
delivers a
loser for the third time in a row in 2000, then they
may
start looking
at what do we need to win, and that would be the moment
for
Weld. So he may playing a much longer-term game than we
think.
PAGE: That is pretty long-term. This is sort of a
dilemma for
President Clinton, frankly, who -- the White House is
not
inclined to
expend a lot of political capital to make sure that
Bill
Weld gets to
be ambassador to Mexico.
But Weld put some steel in the president's back by
publicly
insisting
that the nomination go forward. And in -- but Clinton
is not
inclined
to do recess appointments, to bypass Chairman Helms. I
mean,
it'll
be interesting to see.
SESNO: What are they saying? What are they going to do
over
there? What are they saying? What are they telling you
right
now?
PAGE: Well, I don't know what they're going to do, but
what
they're not going to do is make this their number-one
cause
on
Capitol Hill.
BLANKLEY: I mean, Weld's not going to get it. Everybody
knows
that
ROBERTS: They want Helms out there, speaking in sort of
anti-
Weld terms. They like that politically. But they have
other
fish to fry
with Jesse Helms. He could hold up a lot of other
nominations that
they really do want.
SESNO: And there are a lot of.
ROBERTS: And they've got to be careful about.
SESNO: And there are a lot of other nominations out
there.
And with that, I will thank Steve Roberts, Susan Page
and
Tony
Blankley. Great to see you, as always.
When we come back, Bruce Morton has his Last Word.
(BEGIN VIDEO CLIP)
U.S. REPRESENTATIVE RICHARD GEPHARDT (D-MO),
HOUSE MINORITY LEADER: Our new speaker, the gentleman
from Georgia, Newt Gingrich.
(APPLAUSE)
(END VIDEO CLIP)
SESNO: The gavel won by Newt Gingrich in 1994 weighs
heavy in
his hands three years later. We'll take a look.
(COMMERCIAL BREAK)
SESNO: And welcome back to LATE EDITION. Bruce Morton
joins us now with his Last Word, as always. Bruce.
MORTON: Well, Frank, the most analyzed man in town, I
guess,
is
Newt Gingrich. Now it's my turn.
(BEGIN VIDEOTAPE)
Newt's in trouble, the town buzzed. Plots thicken. Et
tu,
Armey. Et
tu, too, DeLay. Well, what a week it was.
But amid all the involved explanations of who did what
to
whom,
you may missed the simplest reason why Gingrich, once
loved
by his
Republican colleagues, got to be so unloved. The fact
is his
job
changed.
The Newt House Republicans loved was the Newt who had a
vision, the minority leader who came up with a
poll-tested
winner in
the Contract With America and saw his troops become the
majority
in the 1994 elections.
That kind of leadership demanded one set of skills:
articulate a goal,
fire up the troops, storm the castle, and watch the
walls
come
tumbling down.
Being speaker with a tiny majority is a very different
job.
It involves
doing something nice for Fred because half a dozen
members
will
vote with him and something nice for Janet because she
has
three or
four votes, too.
It involves teaching firebrand conservatives that they
can't
have 100
percent of everything right now, because politics
doesn't
work that
way. It involves being kind to moderates, because the
party n
eeds
to grow in the North and East. It involves not getting
outmaneuvered
by the wily Democratic politician in the White House.
It
involves
networking, details.
Tip O'Neill, for instance, was very good at that and
left
the vision
stuff to others. Maybe Gingrich is more like Ronald
Reagan,
who
could preach wonderfully and would then leave the
details to
somebody else.
Early in his first term as speaker, Gingrich remarked
that
he often
didn't know just what the House was taking up on a
given
day. Then
Senate leader Bob Dole, who was with Gingrich, looked
shocked.
Dole, like O'Neill, was Mr. Inside, adept at making the
place work.
Gingrich, like Reagan, may be best as Mr. Outside,
firing up
the
troops. They are two quite different jobs, and being
good at
one
doesn't guarantee success in the other.
(END VIDEOTAPE)
SESNO: Bruce, Susan turned to me -- Susan Page turned
to me
in
the last discussion and said, "What animal do you think
Newt
Gingrich is?" It's not exactly an animal, but what
about a
phoenix,
rising again?
MORTON: Well, I think his problem is that he really is
impatient
with minutiae of running the House. You know, that's
very
local
politics, a favor for so and so, a favor for so and so.
And
I think he
wants to get out there and lead a grand charge again.
What
they
need to do now is find a couple of issues around which
that
charge
can be led.
SESNO: Out of power, he was a bomb-thrower. In power,
he's
got
to do something different. So does his membership.
MORTON: Well, that's exactly right. You can't just be
Oliver
Cromwell's army and say, you know, we win it all right
now.
It
doesn't work that way. It never has.
SESNO: How do you see him fighting back and regaining
some
public stature?
MORTON: I think if there is a budget deal, then
everybody
can go
home and campaign as Mr. Tax Cut. And a rising tide
will
re-elect a
lot of congressmen.
SESNO: And Newt rides back into town triumphant. We'll
see.
(LAUGHTER)
Bruce Morton, thanks very much.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
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CREATION DATE/TIME:28-JUL-1997 09:04:06.00
SUBJECT: CNN: Inside Politics, 7/26/97
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Message Creation Date was at 28-JUL-1997 08:52:00
Inside Politics Weekend:
INSIDE POLITICS WEEKEND Welcomes Senators Robert Torricelli ,
Thad Cochran and Senior Adviser to the President Rahm Emanuel
Aired July 26, 1997 - 7:30 p.m. ET
WOLF BLITZER, CNN HOST: Thanks for joining us for our
weekend look inside politics -- the events, the issues,
the
battles, the
bytes. If you're looking for the program "PINNACLE," it
can
be
seen at 6:30 p.m., Eastern on Sunday this week with
George
Plimpton.
It was a busy week on Capitol Hill. The Republicans had
their turn
in the hot seat at the Senate campaign fund-raising
hearings. The
target -- former RNC Chairman Haley Barbour. The goal
-- to
show Republicans raised money the same way the
Democrats did
from overseas sources. Did the strategy succeed?
We'll ask two members of the Governmental Affairs
Committee,
Senators Robert Torricelli of New Jersey and Thad
Cochran of
Mississippi. Then we'll look at the latest budget
developments from
capital gains to estate taxes. How do you spell relief?
We'll talk with
senior adviser to the president Rahm Emanuel.
Later, Bill Schneider joins us with the story behind
the
story. And
finally, we'll hear from Political Humorist Mark
Russell.
But first, did Democrats call their first truly high
profile
witness of the
hearings, Haley Barbour? Here's how Senator John Glenn
laid
out
the Democrats' case when the hearing started in early
July.
(BEGIN VIDEO CLIP)
JOHN GLENN, SENATOR, (D) GOVERNMENT AFFAIRS
COMMITTEE: The National Policy Forum was established in
1993
as a think tank to develop Republican ideas and
policies.
Republican officials claimed that it was independent of
the
party
and, thus, would not be subject to the laws and
regulations
that
apply to the Republican National Committee and other
political
organizations.
In fact, the National Policy Forum was an arm of the
Republican
National Committee. It was a subsidiary in the words of
a top
Republican official. One way the Republicans used their
subsidiary
was for what can only be described as a laundering of
illegal foreign
money.
(END VIDEO CLIP)
BLITZER: At issue, a loan guarantee from the U.S.
subsidiary
of a
Hong Kong company to the National Policy Forum. The
Forum
used the money to guarantee other money that it owed
the
National
Republican Party. And that in turn, say the Democrats,
allowed the
RNC to spend more money on advertising just before the
1994
Congressional elections.
Barbour emphatically denies he did anything wrong.
(BEGIN VIDEO CLIP)
HALEY BARBOUR, FORMER RNC CHAIRMAN: The fact of
the matter is everything that the Republican National
Committee did
and everything the National Policy Forum did was
perfectly
legal
and proper, whether or not I knew the money had come to
Hong
Kong.
(END VIDEO CLIP)
BLITZER: And joining me now, Senator Robert Torricelli
of New
Jersey who joins us from our New York Bureau, and
Senator
Thad
Cochran, Republican of Mississippi who joins us here in
Washington. Senators, thank you so much for joining us
on
INSIDE
POLITICS WEEKEND.
Senator Cochran, knowing what you know today, do you
think
Haley Barbour did the right thing in organizing this
loan
guarantee to
this Republican Party Forum?
THAD COCHRAN, SENATOR, (R) GOVERNMENT
AFFAIRS COMMITTEE: Well, it seems that he was absolutely
right in what he told the committee. The facts do not
support the
charges that were made by Senator Glenn at the
beginning of
these
hearings that the National Policy Forum was established
to
launder
foreign money. That was not the purpose.
The purpose was to conduct meetings around the country,
to
get
feedback from citizens about the issues they were
concerned
about,
and what they thought that that would determine what
they
ought to
do about it. That was clearly established by the
evidence,
and it was
not a subsidiary. It was not an arm of the RNC for the
purpose of
raising money or funneling foreign money anywhere.
BLITZER: But when it repaid that money that it owed to
the
RNC,
didn't that allow in effect money to be used in that
1994
campaign
that otherwise, had that Hong Kong money not gone to
the
National
Policy Forum, that money would not have been available?
COCHRAN: That was the charge that was made by the
Democrats. But it was not supported by the evidence. It
was
clear
that there were ample funds for the Republican National
Committee
to spend in the closing weeks of the campaign in 1994
whether that
loan was repaid or not.
BLITZER: All right, let's hear from Senator Torricelli.
Was
all this as
kosher as Senator Cochran and Haley Barbour insist?
ROBERT TORRICELLI, U.S. SENATOR, (D-NJ): Well, Wolf, it
may or may not have been legal. But I don't think
anybody
could
believe it's proper. When you have the chairman of the
Republican
Party sitting on a yacht in Hong Kong Harbor talking to
a
foreign
national about having his board of directors approve
$2.5
million to
be sent to an arm of the Republican National Committee,
something
is wrong.
My hope for these hearings is that Democratic and
Republican
leaders would both come forward, admit what was wrong.
We get
all
this out in the open so we can change the laws and fine
those who
are responsible and make sure it never happens again.
I've been urging leaders of the Democratic Party to do
so. I
think
Haley Barbour made a real mistake coming forward and
trying
to
defend these activities. They are not defendable. This
is
$2.5 million
of foreign money that only weeks before the 1994
elections
made a
real difference in these campaigns.
The filings of the Republican National Committee in
October
20th,
1994 indicate they only had $700,000 left 19 days
before an
election. They were in financial trouble, and this
money
bailed them
out.
BLITZER: But Senator Torricelli, the money, as far as
you
can tell,
all this was legal with this loan guarantee going to
the
National Policy
Forum.
TORRICELLI: I don't think it's for me to say ultimately
whether or
not it was legal. That's a question for the Justice
Department. It is, I
think, my role and others in the Congress to say this
isn't
how we
want to run national elections. We cannot be having
money
funnel
into the Democratic and Republican parties that are so
decisively
controlling some of our own elections.
BLITZER: All right, Senator Cochran, some of that money
that
the
Hong Kong businessman, Ambrous T. Young lent --
guaranteed to
the National Policy Forum, which was affiliated with
the
Republican
Party -- that was not repaid. It was defaulted. He lost
$800,000.
Does the Republican Party in your opinion, Senator
Cochran,
does
the Republican Party have an obligation -- a moral
obligation to
repay Ambrous T. Young that $800,000?
COCHRAN: Well, you'll have to remember that the
Republican
National Committee was not actually a party to that
loan. It
was a
guarantee of a loan that was extended to the National
Policy
Forum
by a bank.
The guarantee came from a Florida corporation, and
lawyers
said
that this was a legal arrangement. There was nothing
wrong
with it.
And Haley Barbour indicated that he made no commitment.
There
was no guarantee. There was no security put up to
protect
Young
Brothers of the Florida corporation who guaranteed the
loan.
The eventual outcome was a settlement -- a compromise.
And
that's
the way it stands now. One of the lawyers who testified
represents
Young Brothers, and he wanted the loan repaid because
he had
assured them it was a no-risk loan.
BLITZER: But morally, do you feel comfortable with the
Republican
-- at least Republican activists defaulting on $800,000
to
this Mr.
Young?
COCHRAN: This was a National Policy Forum obligation.
It was
not paid back. They didn't pay back the RNC over $2
million
that
was loaned to it. To say that somehow the RNC benefited
financially from this arrangement is just an outrageous
distortion of
the facts.
BLITZER: All right. Senator Torricelli, an outrageous
distortion of
the facts that the RNC benefited at all from this $2.1
million loan
guarantee. Did the Republican Party -- the RNC benefit
at
all from
this foreign money?
TORRICELLI: Well, I think, Wolf, you have to remember
the
circumstances. You're 19 days away from the 1994
elections.
The
entire Congress is now at stake. A decisive national
election. The
Republican Party had $700,000 in the bank. Some days in
late
October, it actually had a negative balance.
It was out of cash. It arranged to get $1.6 million
from the
National
Policy Forum which was Mr. Young's money, and that
money went
to 21 different states, influenced 26 Congressional
elections. Some
of those Democratic members of Congress lost by 3,000,
5,000
and 10,000 votes. You'd have a hard time telling those
defeated
members of Congress that this money wasn't decisive and
made
all
the difference.
BLITZER: Well, Senator Cochran, didn't the Democrats
succeed
in
what clearly was their strategy -- to show that
everyone
does it. The
Democrats do it. The Republicans do it. In effect,
playing
down the
obvious impact of these hearings which goes against the
Clinton
Administration's efforts to raise money from overseas
sources.
COCHRAN: Well, if this were a baseball game, Wolf, and
you
said
the Democrats were now up at bat to present the case
against
the
Republicans, you'd have to conclude that they struck
out.
BLITZER: Why did they strike out if
COCHRAN: There was no evidence of any illegal acts.
BLITZER: But the former
COCHRAN: No illegal transaction whatsoever was
identified in
the
evidence that was presented this week. There was
absolutely
no
evidence of wrong doing. They can charge this as long
as
they want
to and say these things. Some senators are saying over
and
over
again, but it doesn't make it true.
BLITZER: So there you are, Senator Torricelli, no net
gain
politically for the Democrats this week?
TORRICELLI: Well, you know the facts just out, Wolf.
Yesterday,
you had Mr. Richards, a former chairman of the
Republican
National Committee saying Haley Barbour was told this
was
foreign
money. He knew where this was coming from. The money was
requested because they were getting close to the 1994
elections.
They have a former chairman of the Republican National
Committee
basically contradicting what my friend, Senator
Cochran, is
saying
and totally contradicting Haley Barbour. My regret in
all of
this is if
the difference where we are right now is we had leaders
of
the
Democratic Party come forward. I hope they're going to
admit
what
was wrong, hold those who were responsible and move on.
I
think
the Republicans
COCHRAN: Nobody had come forward voluntarily to testify
like
Haley Barbour did, and you're criticizing him and
saying
that he
made a mistake by doing so. There are 50 people taking
the
Fifth
Amendment or disappearing from the country who won't
talk
about
the presidential election campaign.
BLITZER: Okay, Senator Cochran, that has to be the last
word.
Senator Torricelli, thanks to both of you for joining
us.
TORRICELLI: Thank you, Wolf.
BLITZER: The subject is not going away. Both of you
will be
back.
And when we come back, we'll talk with Rahm Emanuel,
Presidential Senior Policy Adviser, and we'll get the
White
House
view on the budget negotiations. Stay with us.
(COMMERCIAL BREAK)
BLITZER: Welcome back to INSIDE POLITICS WEEKEND.
White House and Congressional budget negotiators have
been
meeting this weekend trying to work out several tough
issues,
including budget tax cuts.
Rahm Emanuel, senior adviser to President Clinton,
joins me
now
with the White House view. Mr. Emanuel, thanks so much
for
joining this weekend. Is there going to be an agreement
this
week?
RAHM EMANUEL, WHITE HOUSE SENIOR POLICY
ADVISER: Well, the timing is not so much important as
what
is in
the agreement. That's what we're working towards
meeting the
president's objective for a balanced budget agreement.
BLITZER: If you had to place a bet, would you say that
they're this
close that within the next 24 to 48 hours that there
will be
an
agreement at least in principle?
EMANUEL: You know betting's illegal Wolf. I'm not going
to
place
a bet. I think what's important is not the timing so
much as
what we
get done. The president laid out some very specific
objectives. He
wants to see health insurance for children. He wants to
see
the
largest increase in education in thirty five years. He
wants
to see the
life span of Medicare extended for another ten years. He
want
S to
see a middle class tax cut.
BLITZER: Well, let's get to the Medicare question.
(OFF-MIKE)
Medicare recipients to pay higher premiums. Will that
be
included in
this deal?
EMANUEL: Well, it's been clear that he wants it in the
deal.
He
thinks it's very important to be part of this deal, and
he
thinks it's
also important that as we move forward, if it's not
that
this will be
something in the future as we look to entitlement
reform
that it be
part of.
BLITZER: So it sounds like there's some flexibility as
part
of this
deal on that issue.
EMANUEL: Let me be clear. As he said the other day, I
can't
say it
any clearer than the president. He thinks it belongs in
this
deal. It's
important. That we have accomplished a number of things
in
Medicare, one is $400 billion in savings, new
preventive
measures,
new choices for senior citizens.
BLITZER: All right, let's move on to the next
contentious
issue -- a
cigarette tax. Twenty cent per pack -- do you think
that
will be in
this deal?
EMANUEL: Again, let me be clear. The president said it
should be
part of this. He said it just the other day. It
accomplishes
two very
important goals. One, it helps us in our efforts to cut
teen
smoking.
Two, it will help go for children's health and other
children's needs.
That's very important.
BLITZER: But if you include that $15 billion in a 20
cent
per pack
cigarette tax, you're not going to get $85 billion in
net
tax cuts.
You're going to get $70 billion.
EMANUEL: I think the president said it just the other
day,
and I
need not expand on it. He wants it as part of this
agreement. He
thinks it's important
BLITZER: So what about the $85 billion commitment? You
committed to the Republicans there would be $85 billion
in
net tax
cuts? Are you willing to move away from that
commitment?
EMANUEL: No. We have a commitment toward $85 billion. We
have a commitment towards a tax cut that represents the
needs of
middle class families, and that's one of our clear
objectives. We
want a tax cut that works within the boundaries of a
balanced
budget agreement, represents the needs of middle class
families
BLITZER: But will the cigarette tax be outside that $85
billion?
EMANUEL: Wolf, as you know, they're negotiating right
now.
And
they're negotiating on what the president wants in this
balanced
budget agreement. It's an historic time to accomplish
our
goals. And
as they negotiate, they're going to be very clear that
we
want this
part of the agreement because of what it accomplishes
for the
country.
BLITZER: All right, what about the capital gains tax
cut?
Does the
president support a broad based capital gains tax cut?
The
Republicans want to reduce it from 28 percent to 20
percent.
EMANUEL: Right. The president, as you know, on June 30th
proposed his entire
BLITZER: Which was a modest reduction -- very modest.
EMANUEL: He proposed his capital gains tax cut. But in
the
context of his entire tax package, that tax package
represented his
objectives in a tax plan for higher education and
helping
middle class
families raise their children.
We had one. We had a gesture. It's clear it's part of
their
priorities
and one of the things they're fighting very hard for.
We
recognize
that. But one of our priorities is making sure in the
bottom
line that a
tax cut represents middle class family needs, and that
is
helping them
raise children and send them to college.
BLITZER: If they're willing to eliminate indexation for
inflation,
would you be willing to meet them halfway on the
percentage
that
you'll go for a broad based capital gains tax cut?
EMANUEL: That's for the negotiators to handle, and I'm
not
going
to negotiate
BLITZER: Is indexation going to be in this agreement?
EMANUEL: The president's been clear about what he --
his
views
of indexation. He wants a balanced budget
BLITZER: Will he veto if it's in there?
EMANUEL: A tax cut has to be
BLITZER: Will he veto if it's in there?
EMANUEL: Wolf, the tax cut has to live within the
boundaries
of
the balanced budget agreement. Indexing makes that very
difficult.
BLITZER: So he will veto if there's indexing?
EMANUEL: He makes the judgment on vetoing -- not me.
BLITZER: The Republicans have been insistent that the
$500
per
child tax credit should not go to those families where
the
families pay
no federal income tax. You want those people to get
that,
and the
Republicans say that's simply more welfare. Where's the
room
for a
compromise on the $500 per child tax credit?
EMANUEL: Well, there's a number of places. First of
all,
let's go
back to a little history on
BLITZER: We don't have much time. We only have less
than a
minute.
EMANUEL: We believe the law enforcement officers and the
nurses and teachers who earn in the area of $18,000 to
$28,000
deserve a family tax cut. They have children. They need
the
support
from this tax cut. They have worked hard. They
BLITZER: But don't they already get it under the earned
income tax
credit? They don't pay any federal income tax?
EMANUEL: Well, it was also in the Contract With
America. And
as other Republicans have said, these are people who
are hard
pressed, and if we're going to have a tax cut the hard
pressed
working families of this country deserve it.
BLITZER: So where is the compromise on the $500 per
child.tax
rate?
EMANUEL: Our principles are clear that we think the
middle
class
families and those middle class families deserve a tax
break, and
they deserve a per child tax cut.
BLITZER: Do you think the Republicans will cave on that
issue?
EMANUEL: Well, I'm not going to tell you what I think
they're
going to do. I can tell you what I think is our
objective,
and that's
what we're going to seek through in this tax plan.
BLITZER: OK, Rahm Emanuel, good luck in these
negotiations.
EMANUEL: Thank you.
BLITZER: Thanks again for joining us. We'll see you at
the
White
House during the week.
And up next, Bill Schneider has the "Story Behind the
Story." Let's
hear it for the rational exuberance mode. Stay with us!
(COMMERCIAL BREAK)
BLITZER: Welcome back to INSIDE POLITICS WEEKEND.
Joining us now as he does every weekend, our favorite
political
analyst, Bill Schneider.
Is Haley Barbour in any trouble because his testimony
was
contradicted the next day by another Republican?
WILLIAM SCHNEIDER, POLITICAL ANALYST: Well, the
word is, the Justice Department may be looking into
whether
he
deliberately misled Congress. Contempt of Congress, you
may
be
surprised to hear, is a federal crime.
BLITZER: And speaking of Republicans in trouble, what
about
Newt Gingrich? He had a problem a week ago. Has he put
that
problem to bed?
SCHNEIDER: Well, the Republicans had a revival meeting,
and
his
position as leader is apparently secure for the time
being.
And those
are a lot of conditions he's got to deliver to his
fellow
Republicans,
and that's why he wants to deliver their cherished tax
cut.
BLITZER: All right, let's take a look at the economy
for a
second.
The president wants credit for the booming economy. The
Republicans want credit, but Alan Greenspan deserves
some
credit
too, doesn't he?
SCHNEIDER: Well, remember last December when Greenspan
played "The Grinch Who Stole Christmas." He talked
about the
irrational exuberance of the stock market and stock
prices
promptly
took a tumble.
Well, this week, he testified before the House and
Senate
Banking
Committee's, and he sang a new tune. Let's look at the
"Story
Behind the Story."
(BEGIN VIDEOTAPE)
ALLEN GREENSPAN, FEDERAL RESERVE CHAIRMAN:
The recent performance of the American economy,
characterized by
strong growth and low inflation, has been exceptional.
And
better
than most anticipated.
SCHNEIDER (voice-over): Sounds like rational
exuberance. In
December, it was widely believed Greenspan was trying
to
send a
message: Cool it! What's Greenspan's message now?
Remember back in early May, when the White House and
Republican Congressional leaders struck a balanced
budget
deal?
That deal happened because the Congressional Budget
Office
announced $225 billion in extra revenues as a result of
stronger than
expected economic growth.
Well, now the White House and Congress are putting
together
the
details of that budget deal. Once again, rosy economic
scenarios are
making it much easier.
Suppose Greenspan had stuck with his irrational
exuberance
line, or
called for higher interests rates to slow down the
economy.
That would not only have shaken up the stock market, it
would have
endangered the budget deal in its delicate, final
stages.
And one
thing Greenspan does not want to do, is endanger a
budget
deal.
GREENSPAN: A fiscal policy oriented toward limited
growth in
government expenditures, producing smaller budget
deficits,
and
even budget surpluses would tend to lower real interest
rates even
further, also promoting capital investment.
SCHNEIDER: Sure enough, Greenspan's remarks propelled
the
stock market to a new record high as if to say, "yeah,
we
got the
message."
Congressional negotiators got the message too.
NEWT GINGRICH, HOUSE SPEAKER: I think we're on the
verge of getting the balanced budget agreement.
(END VIDEOTAPE)
SCHNEIDER: But, some people are asking if the economy
is so
strong, why not do nothing. Why do we need a budget
deal at
all.
The deficit will disappear on its own as the revenues
come
rolling in.
Well, the White House says a budget deal would be, "an
insurance
policy," just in case the economy slows down.
That's a long way from the argument we've been hearing
for
years.
If we don't get a budget deal, they've been saying,
then
we're all
going to go to hell.
BLITZER: Thanks, Bill Schneider, we'll see you again
next
weekend. And coming up next, Mark Russell's view of
politics.
Here's a preview.
MARK RUSSELL, POLITICAL HUMORIST: The movie
"Contact" is all about a network's attempt to contact
an
audience.
(COMMERCIAL BREAK)
BLITZER: And now time for Mark Russell.
RUSSELL: And we're back at the Monocle. You know there
are a
lot of motion pictures filmed in Washington in the past
few
years,
and in none of them does the city come off well at all.
Remember Independence Day last year, big box office
smash.
Why? Because Washington, New York City and Los Angeles
were
totally obliterated.
You give the people what they want and they'll turn out
for
it. Right
now, there's a Steven Spielberg thriller being filmed
here
in town
called, "Deep Impact." As I understand it, it has
something
to do
with a comet plowing into Washington, D.C., doing
almost as
much
damage as the mayor.
And, then there's the movie "Contact," starring Jodie
Foster
and 13
CNN correspondents causing the critics to yell,
unethical.
Yes,
indeed, the critics are stuck for a word. And so, the
CNN
management has ordered all CNN correspondents not to
appear
in
any more movies, which is really a disappointment to
all of
us who
kind of looked upon John Sununu as the next Jimmy
Stewart.
And, do you remember the Jodie Foster movie, Silence
The
Lambs,
and that sinister character Hannibal the Cannibal was
played
by
Anthony Hopkins. That's because my friend Bob Novak was
unavailable.
(LAUGHTER)
So the president, the president of CNN says that he
thought
it was a
good idea at the time to put his people in the movie as
sort
of a
promotion opportunity here in the summer when the news
audiences
are, well, a little bit down.
How down are they? Well, the Senate Committee on
Fund-Raising
may have to go door to door.
(LAUGHTER)
BLITZER: OK, Mark Russell, thanks again. That's all the
time
we
have for this edition of INSIDE POLITICS WEEKEND.
Sunday at
noon, "LATE EDITION WITH FRANK SESNO" looks at the
latest on the budget deal.
That's Sunday at noon. For now, thanks very much for
watching.
Enjoy the rest of your weekend. I'm Wolf Blitzer in
Washington.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Dag Vega@EOP@LNGTWY@LNGTWY (Dag Vega@EOP@LNGTWY@LNGTWY [ WHO )
CREATION DATE/TIME:28-JUL-1997 09:04:10.00
SUBJECT: CNN: Evans & Novak, 7/26/97
TO: Michael Waldman@eop (Michael Waldman@eop [ WHO ])
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READ:UNKNOWN
TO: Joshua Silverman@EOP (Joshua Silverman@EOP [.WHO])
READ:UNKNOWN
TO: Stuart Schear@eop ( Stuart Schear@eop [ WHO 1)
READ:UNKNOWN
TO: steven j. naplan@eop ( steven j. naplan@eop [ NSC )
READ:UNKNOWN
TO: Kevin Moran@eop ( Kevin Moran@eop [ WHO 1)
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TO: Lorraine L. Wytkind@eop (Lorraine L. Wytkind@eop [ WHO ])
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TO: Daniel J. Gunia@eop (Daniel J. Gunia@eop [OA])
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TO: Jason S. Goldberg@EOP ( Jason S. Goldberg@EOP [ WHO ])
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TO: Karen E. Finney@eop (Karen E. Finney@eop [ WHO 1)
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TO: Rahm Emanuel@eop ( Rahm Emanuel@eop [ WHO ])
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TO: Michelle Crisci@eop ( Michelle Crisci@eop [ WHO ])
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TO: Jill M. Blickstein@eop (Jill M. Blickstein@eop [ OMB ])
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TO: [email protected]@INET@LNGTWY ([email protected]@INET@LNGTWY [ OSTP )
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TO: Lorraine A. Voles@ovp@eop ( Lorraine A. Voles@ovp@eop [ UNKNOWN ])
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TO: Virginia M. Terzano@ovp@eop (Virginia M. Terzano@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Gene B. Sperling@eop ( Gene B. Sperling@eop [OPD])
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TO: Laura D. Schwartz@eop ( Laura D. Schwartz@eop [ WHO ])
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TO: Christa T. Robinson@eop ( Christa T. Robinson@eop [ UNKNOWN ])
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TO: Alison Muscatine@eop ( Alison Muscatine@eop [ WHO ])
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TO: April Mellody@eop ( April Mellody@eop [WHO])
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TO: Julie E. Mason@eop (Julie E. Mason@eop [ WHO ])
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TO: Heidi Kukis@OVP@EOP ( (Heidi Kukis@OVP@EOP [ UNKNOWN D
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TO: Russell W. Horwitz@eop ( Russell W. Horwitz@eop [ OPD ])
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TO: Julia R. Green@eop (Julia R. Green@eop [ WHO ])
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TO: Jeremy M. Gaines@eop ( Jeremy M. Gaines@eop [ WHO ])
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TO: Paul K. Engskov@eop (Paul K. Engskov@eop [ WHO ])
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TO: Anne M. Edwards@eop ( Anne M. Edwards@eop [ WHO ])
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TO: Steven A. Cohen@eop ( Steven A. Cohen@eop [ WHO ])
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TO: Lori Anderson@eop ( Lori Anderson@eop [ WHO ])
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TEXT:
Message Creation Date was at 28-JUL-1997 08:48:00
Evans & Novak:
EVANS & NOVAK Speak With Former Republican
National Chairman Haley Barbour
Aired July 26, 1997 - 5:30 p.m. ET
ROBERT NOVAK, HOST: I'm Robert Novak. Rowland Evans
and I will question a major Republican figure in the
campaign
fundraising investigation.
ROWLAND EVANS, HOST: He is former Republican National
Chairman Haley Barbour.
(BEGIN VIDEO CLIP)
EVANS: Political sparks flew as the minority Democrats
controlled
three days of hearings in the Senate problem of alleged
campaign
fundraising illegalities.
A top Republican swore there was nothing illegal about
a 1994
Hong Kong loan to a Republican think tank called the
National
Policy Forum.
HALEY BARBOUR, FORMER RNC CHAIRMAN: The first and
most important fact is that the National -- is that
everything the
National Policy Forum did, was legal and proper.
EVANS: The senior committee Democrat was having none of
that.
JOHN GLENN, SENATOR, (D-OHIO): We can dance on the
technicalities of this, but it came in. It was foreign
money
and that's
it.
EVANS: That angered Republicans, one of whom attacked
Senator
Glenn.
PETE DOMENICI, SENATE BUDGET COMMITTEE
CHAIRMAN: You muddled up as if this was illegal when
you know
it wasn't illegal.
EVANS: But Barbour's denial, that he knew the loan
would come
from Hong Kong, was contradicted by the very Republican
who
arranged.
UNKNOWN: The only thing I told him is the money would be
transferred from Young Brothers, Hong Kong, to Young
Brothers.
U.S.A.
EVANS: And even Chairman Thompson, referring to the
close
relationship between the think tank and the Republican
National
Committee, was skeptical.
FRED THOMPSON, SENATOR, (R-TN): And the fact that you
provided the seed money would make any appearances of
any
foreign involvement that much more radioactive.
(END VIDEO CLIP)
EVANS: Mr. Chairman, the Washington Times, not known as
a
Clinton liberal apologist, had a headline on Saturday
morning this
"Haley Barbour sought use of foreign funds for the
GOP,"
unquote.
In retrospect, sir, don't you regret just a little bit,
going to Hong
Kong for that money for the NPF?
BARBOUR: Rowlie at the time the loan was made to the
National
Policy Forum by Signet Bank and it was guaranteed by
Young
Brothers Development, Florida. Young Brothers
Development,
Florida, had been a contributor to the Republican
National
Committee for years, long before I was chairman of the
RNC.
At the time, my understanding was that they were
allowed,
that they
were eligible as an American company to make
contributions
to the
RNC. I said that at the time. That was the fact that we
thought --
you know all the witnesses that the Democrats chose,
not to
call
yesterday -- during this week, all told them the same
thing,
that
that's what they thought, that's how we proceeded.
Mr. Denning, Mr. Reed, Mr. Fierce, all whose names were
mentioned, they all said the same thing I said. The
fact of
the matter,
though Rowlie, either way, it was perfectly legal.
Either
way it was
perfectly legal. If it had come from Hong Kong or not
come
from
Hong Kong, it was legal. That was not the point. The
point
is what
did I know. I just had to tell the truth.
EVANS: So, no regrets?
BARBOUR: Oh, look
EVANS: OK, that's all
BARBOUR: You never like to be on television -- people
chasing
you around, trying to get people to contradict you. But
the
fact of
the matter is, everything that the Republican National
Committee did
and everything did the National Policy Forum did, was
perfectly
legal and proper. Whether or not I knew the money had
come
from
Hong Kong, which is something I actually learned this
year,
that's
irrelevant but the fact is I didn't learn it until this
year.
EVANS: Mr. Chairman, the man you appointed to head the
National Policy Forum, Mr. Michael Baroody, testified
this
week.
He had a slightly different view than you have. Let's
take a
look at
that.
(BEGIN VIDEO CLIP)
MICHAEL BAROODY, FORMER PRESIDENT OF NFP: I
thought using foreign money to fund NPF would be wrong.
And
two, I thought the lines between NPF and RNC were not
sharply
enough drawn and made separation between the two seem a
fiction
(END VIDEO CLIP)
EVANS: Now that's your own appointee sir. Michael
Baroody is
a
well-known figure in town. Is he crazy?
BARBOUR: No, and he's a fine guy and he also said later
in
his
testimony, more than once, that raising foreign money
was
legal, that
he disagreed with it, that he didn't think it was a
good
idea. Nobody
ever asked Mike, but the fact is while he was President
of
the
National Policy Forum, no foreign money was ever
raised, even
though it was legal and as Mike said, it was legal.
The other thing that Mike said about "seemed a
fiction," he
testified
under oath that this was a separate organization,
separate
function,
separate operations, separate management, that at times
he d
id not
like the fact that the RNC, which was the biggest
creditor,
the sole
creditor, to the National Policy Forum, that the
management
of the
RNC pushed hard on the management of NPF to do certain t
hings,
so they could pay back the money that the RNC had
loaned
them,
but he said himself that it is a separate organization.
And
let me just
say Rowlie, it is, was and at every time, a separate
orga
nization
from the RNC.
NOVAK: Mr. Barbour, as you are well aware, the Democrats
claim that you used this money from the Young
organization,
as a
conduit for money to win control of the House of
Representatives in
1994.
Sir, their point is to make this winning of the House of
Representatives look illegal. Now, it's one thing for
the
Democrats
to say this, but the president of Ambrous Young in
Florida,
who
arranged this, a former chairman of the Republican,
National
Committee, Richard Richards, had this to say at the
Senate
Committee hearings. Let's take a look at it.
(BEGIN VIDEO CLIP)
RICHARD RICHARDS, FORMER RNC CHAIRMAN: Frankly,
I never thought I would see the time in my lifetime
that
Republicans
won the House majority, but he told me that was the
case and
said
we have a problem. We at the national committee have
loaned
the
forum $3 million, $3.3 million -- some amount in excess
of $3
million -- of money that we can use in the campaign.
But
we've got a
problem. We need to be able to take it out of the forum
for
our
purposes
(END VIDEO CLIP)
NOVAK: That's pretty incriminating. You're a good
lawyer,
besides
being a politician. That's, that's kind of a smoking
gun,
isn't it sir?
BARBOUR: Bob, let me just say to you, first of all,
Dick
says in his
testimony, that as you just played, that the Republican
National
Committee had loaned the National Policy Forum $3.3
million
or
something. Now the fact is if you go back and look at
the
books,
which were filed with the Federal Election Commission
on a
monthly
basis, that's not even close to being true. The one
fact in
the
statement that you just played, how much did the RNC
lend the
National Policy Forum? He's not even -- it's not even
half
way
close. It was about half as much as he said.
The fact of the matter is that the Republican National
Committee
could not by law, did not and you can see it from our
books,
and
we've made those books available to this committee, did
not
do that
at all. And you noticed that the Democrats chose not to
put
on
anybody from the accounting department, chose not to
put on
anybody who could validate and just confirm exactly
what I
said.
Instead they put on a witness who said himself in his
testimony, he
didn't know what happened to the money.
Dick Richards contradicted himself from his letter,
from his
deposition, from his affidavit from his testimony. I
mean,
the real --
yesterday was really about Dick Richards versus Dick
Richards.
But the Democrats want to put on anybody who
contradicts me,
because they've given up on the idea of saying the
Republicans did
something wrong. Now they just want to make it personal
and
try to
smear me personally.
NOVAK: Just briefly, Mr. Barbour, you're not under oath
here, but
you are on television, and you're talking to two
reporters
(LAUGHTER)
let me just ask this, you mean when you made this
deal
with
Young Brothers, you never had in your mind the idea
that
this would
be money that would enable you to finance indirectly,
the '94
campaign?
BARBOUR: Bob, as you know, under the federal law, all
the
money that we spend for federal elections, has to be
non-federal
money. It can't come from a corporation. It can't come
from
a loan
repayment by the National Policy Forum or corporate
money. I
said
in my testimony and the records are right there, in
black
and white.
Time Magazine said this money went to pay for the late
advertising
blitz. The fact of the matter is not one penny of it
did. It
all came out
of our federal account by law.
They said this paid for Contract with America. That is
simply not
true. John Glenn said that in his opening statement.
Just
simply not
true. Not one penny of this money went to that --
couldn't
and
didn't. And the other thing that I said that the
Democrats
hated to
hear, because they want to have this phony, baloney
game that
somehow the Republican control of the House is tainted,
which is
not tainted, is that they said that the RNC had to have
this
money
for the campaign. We didn't. If we had not gotten this
money, we
had millions to spare. And I showed that in my
testimony on
Thursday.
EVANS: Mr. Chairman, we just have a minute before we
take a
break. Mr. Richards told Mr. Young that you as a debtor
would be
safe as the church -- all that money would be paid
back. I
believe
debt still is $600,000, which has not been paid. And
the
chairman of
the Senate committee, Senator Thompson had this to say
about
that.
(BEGIN VIDEO CLIP)
THOMPSON: When you step back from it, this gentleman
Ambrous Young, it looks to me like we owe him some
money. I
say
we, I mean, the Republican National Committee
(END VIDEO CLIP)
EVANS: Mr. Chairman, is that money going to be paid
back and
when?
BARBOUR: The Republican National Committee doesn't owe
Young Brothers anything. But in fact what I did do as
chairman,
Young Brothers, because the National Policy Forum was
unable
to
pay and defaulted on the loan, Young Brothers lost a
$1.5
million.
After the election, I reached out to them and said, I
told
you I'd try
to help. We've already put in more than a million, but
I
will ask the
Republican National Committee and the Republican Nationa
1
Committee will lend the Policy Forum half of what you
lost.
They
said, fine. We settled it. Their lawyer testified
Wednesday
that it had
been settled. The Republican National Committee lost
$2.5
million
EVANS: So, you're not going to pay it back
BARBOUR: $700,000 and something thousand of it
because we
chose to say, look, we don't want you to be left out
totally
like this.
And we'll lend the Policy Forum the money to split the
difference. I
think I've gone way above and beyond what should have
been
done.
NOVAK: OK, I get the answer. We're going to have to
take a
break and when we come back, we'll talk about what John
Glenn
thinks of Haley Barbour and maybe what Haley Barbour
thinks
of
John Glenn.
(COMMERCIAL BREAK)
EVANS: I covered that campaign, Haley. And I must say
you
look
a lot better today than you did then. Back to the
business
at hand.
Do you think, sir -- don't you think that you have
really
undercut
your party's campaign on this issue of Asian money and
the
Bill
Clinton/China connection by this Hong Kong loan to the
Forum?
BARBOUR: Well, there's no question that the Democrats,
who
got
caught with their hand in the cookie jar and had no
defense,
have
said, well, this is the only thing that we Democrats
can do
to try to
distract attention from the campaign finance scandals
of
1996 which
were totally Democrat scandals -- totally Democrat
scandals.
So you're right that the Democrats are trying to use
this to
say
everybody does it, or, yes, you caught me with my hand
in the
cookie jar; look over there.
The fact of the matter is, though, I believe they've
about
given up on
saying the Republicans did anything illegal, saying
that
this was
illegal. They used to say that the National Policy
Forum was
a sham
organization. They've thrown in the towel. And now
they're
reduced
to nothing more, Rowlie, than trying to smear me
personally
by
saying Haley's not telling the truth because this
witness or
that
witness said something difference. But they don't call
any
of the
witnesses that say exactly what I said.
EVANS: Mr. Chairman, as you said this week in your
testimony,
appearances are everything in politics. And your great
friend,
Richard Richards, isn't he right when he said to you,
"I
think we run
the risk of some very adverse publicity." Isn't that
what
you did in
your party today, sir?
BARBOUR: First of all, I don't know that Dick Richards
ever
told
me that. If he said he told me that, I don't doubt him.
I
don't know if
there's any reason for me to remember it. But look, no
matter what
happened here, the Democrats have no defense. So no
matter
what
it was going to be, they were going to find something
to say
that the
Republicans did something wrong.
Of course, what they're doing here is that this is like
the
Republicans
there accused of jay walking when the Democrats are up
for
armed
robbery. But the fact is if the press plays along and
tries
to say these
are equivalent, then that helps the Democrats.
The truth is, Rowlie, this is not equivalent. There is
nothing illegal or
improper about what the Republicans did. And what we
have
here
is what the country demands of bipartisan
investigation. I
think
they're getting it. But the investigation is showing
this is
not a
bipartisan scandal.
NOVAK: Mr. Barbour, when these hearings began three
weeks
ago, the ranking Democrat on the committee made a
remarkable
statement. And let's take a look at it.
(BEGIN VIDEO CLIP)
SENATOR JOHN GLENN (D-OHIO): It's a story of greed and
of trust betrayed, as I see it, of the national
chairman who
betrayed
the trust of a wealthy foreign donor, his own party and
the
American
people when he tried to circumvent the campaign finance
laws
of
this country.
(END VIDEO CLIP)
NOVAK: Sir, how do you feel when a hero, an astronaut, a
Korean War ace, great test pilot, long time senator,
presidential
candidate says you've betrayed your party? What's your
reaction?
What's your personal feeling about that?
BARBOUR: Well, you know, Rowlie
NOVAK: Bob.
BARBOUR: I mean, Bob, I'm sorry because I can't see you
all.
When Senator Glenn was being investigated for the
Keating
Five
scandal, he said on one of the Sunday shows that his
integrity was
all he had, and if people were trying to say he had
done
something
wrong in this, that it was flat wrong, and that he
resented
it with
every fiber in his body.
And for somebody who said that under those
circumstances to
turn
around and make those sort of reckless, baseless,
untrue,
personal,
nasty smearing comments, you better believe I resent
it. And
I noted
in the hearing on Thursday Senator Glenn never asked me
a
question.
NOVAK: How do you feel, sir, about Chairman Thompson's
handling of these hearings? He has obviously tried to
be
bipartisan.
He's critical of you. Would you have wished that he
were more
supportive of the former national chairman of his party
that
presided
over the great Republican victory of 1994?
BARBOUR: I think Fred Thompson feels like he has an
obligation
to the country to be bipartisan. I just said a moment
ago
this ought
to be a bipartisan investigation. I think Fred Thompson
is
bending
over backwards to try to make it a bipartisan
investigation.
And, yes, I think to do that sometimes, he did it at my
expense. But
I don't take any issue with it. I think Senator
Thompson
feels like
I'm a big boy, and I can take care of myself. And I
think
that that, in
fact, is the case because Senator Thompson knows that
nothing
done by the National Policy Forum or the Republican
National
Committee was illegal or improper, that everything was
legal
and
proper.
So I don't have any ill feelings toward Senator
Thompson. In
fact, I
respect the way the Republicans are trying to make this
a
bipartisan
investigation, and all the Democrats are trying to do
is fuzz
it up to
try to make it look like something it's not. They're
trying
to make it
look like a bipartisan scandal when they know full well
it's
not one.
EVANS: Mr. Chairman, there's been a mess over in the
Republican
side of the House for the last several months starting
with
the
speaker's trouble with ethics. Last week and the week
before, as
you know, there was a move to remove him as speaker.
Has this
party mess really damaged in terms of the 1998
Congressional
election and presidential election 2000 your party?
BARBOUR: Well, I think the likelihood is the
Republicans will
make gains in the 1998 elections, Rowlie. I mean,
nobody
likes the
fact that there's -- this is going on over in the House
side. But I think
it probably is blown out of proportion. I think it is a
lot
less there
than meets the eye.
The truth is that this Congress is about to pass a
balanced
budget
with a fair sized tax cut. Now, you and I both know
that in
1995 the
first Republican Congress in 40 years passed a balanced
budget and
a much bigger tax cut, a much better budget that
Clinton
vetoed.
And this time we're having to not get as much as we
ought to
because we're having to do something in the hopes that
Clinton will
veto it.
NOVAK: We have to take another break. And when we come
back, we will have that big question for Haley Barbour.
Mr.
Barbour, you heard Senator Thompson say the other day
in the
hearings that campaign finance reform is a total mess.
Based
on
what has been coming out for months, don't you think it
was
time
now finally for the Republicans to get behind campaign
finance
reform?
BARBOUR: Well, I think the Republicans ought to be for
good
campaign finance reform, Bob. But the biggest problem
we
have in
campaign finance today is the way the unions can take
the
dues
money
of their members which the members are forced to pay by
law,
compelled to pay, and then the unions use that dues
money for
political purposes all to help Democrats even though 40
percent of
the unions members vote Republican.
NOVAK: If that is correct, then would you be for a
total
elimination
of soft money?
BARBOUR: I think soft money should not be allowed to be
used
in
federal campaigns. And what the Democrats don't like to
tell
you is
that's the law today. That is the law today. Soft money
cannot be
used in federal campaigns.
That's another red herring. This union thing is for
real.
And the other
thing that is a serious problem -- it's got First
Amendment
connotations is the use of issue advocacy advertising
in the
last
campaign by both parties and the unions in a much more
political
way than anybody ever envisioned.
This is something new.
ROWLAND: Sir
BARBOUR: I don't know what's going to come of it.
ROWLAND: We just have 30 -- we have 20 seconds. Give me
a
prediction. Will there be a serious new campaign reform
law
in this
or the next Congress?
BARBOUR: I don't anticipate this Congress passing a
bill
because
the Democrats will never accept limiting the unions to
the
rules that
everybody else is certainly under.
ROWLAND: All right, we have to take a break. And when we
come back after these messages, my partner and I will
have a
comment. In a moment.
(COMMERCIAL BREAK)
NOVAK: I'm Robert Novak.
EVANS: I'm Rowland Evans.
NOVAK: Just ahead at 10:30 a.m., "RELIABLE SOURCES"
media coverage of the Cunanan story. And if you haven't
had
enough of me, I'll join the panel to talk about the
state of
conservative journalism.
And at noon Eastern on "LATE EDITION," Frank Sesno
interviews the President's Economic Policy Chief Gene
Sperling for
the latest on budget negotiations.
EVANS: And that's all for now. Thanks for watching.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Dag Vega@EOP@LNGTWY@LNGTWY (Dag Vega@EOP@LNGTWY@LNGTWY [ WHO ])
CREATION DATE/TIME:30-JUL-1997 10:16:54.00
SUBJECT: PBS: News Hour with Jim Lehrer, 7/29/97
TO: [email protected]@INET@LNGTWY ([email protected]@INET@LNGTWY [ OSTP ])
READ:UNKNOWN
TO: Lorraine A. Voles@ovp@eop ( Lorraine A. Voles@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Virginia M. Terzano@ovp@eop (Virginia M. Terzano@ovp@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Gene B. Sperling@eop ( Gene B. Sperling@eop [OPD])
READ:UNKNOWN
TO: Laura D. Schwartz@eop (Laura D. Schwartz@eop [WHO])
READ:UNKNOWN
TO: steven j. naplan@eop ( steven j. naplan@eop [NSC])
READ:UNKNOWN
TO: Kevin Moran@eop (Kevin Moran@eop [ WHO ])
READ:UNKNOWN
TO: Lorraine L. Wytkind@eop (Lorraine L. Wytkind@eop [ WHO ])
READ:UNKNOWN
TO: G N. Lattimore@eop (GN. Lattimore@eop [WHO])
READ:UNKNOWN
TO: Angus S. King@eop ( Angus S. King@eop [ WHO ])
READ:UNKNOWN
TO: Daniel J. Gunia@eop ( Daniel J. Gunia@eop [OA])
READ:UNKNOWN
TO: Jason S. Goldberg@EOP (Jason S. Goldberg@EOP [ WHO ])
READ:UNKNOWN
TO: Karen E. Finney@eop (Karen E. Finney@eop [ WHO ])
READ:UNKNOWN
TO: Rahm Emanuel@eop ( Rahm Emanuel@eop [ WHO ])
READ:UNKNOWN
TO: Michelle Crisci@eop (Michelle Crisci@eop [WHO])
READ:UNKNOWN
TO: Jill M. Blickstein@eop ( Jill M. Blickstein@eop [ OMB ])
READ:UNKNOWN
TO: Michael Waldman@eop (Michael Waldman@eop [ WHO ])
READ:UNKNOWN
TO: Barry J. Toiv@EOP ( Barry J. Toiv@EOP [ WHO 1)
READ:UNKNOWN
TO: Darby E. Stott@eop ( Darby E. Stott@eop [ WHO ])
READ:UNKNOWN
TO: Joshua Silverman@EOP (Joshua Silverman@EOP [ WHO ])
READ:UNKNOWN
TO: Christa T. Robinson@eop ( Christa T. Robinson@eop [ UNKNOWN ])
READ:UNKNOWN
TO: Alison Muscatine@eop ( Alison Muscatine@eop [ WHO ])
READ:UNKNOWN
TO: April Mellody@eop ( April Mellody@eop [ WHO ])
READ:UNKNOWN
TO: Julie E. Mason@eop (Julie E. Mason@eop [ WHO ])
READ:UNKNOWN
TO: Heidi Kukis@OVP@EOP (Heidi Kukis@OVP@EOP [ UNKNOWN ])
READ:UNKNOWN
TO: Russell W. Horwitz@eop ( (Russell W. Horwitz@eop [ OPD ])
READ:UNKNOWN
TO: Julia R. Green@eop (Julia R. Green@eop [ WHO ])
READ:UNKNOWN
TO: Jeremy M. Gaines@eop ( Jeremy M. Gaines@eop [ WHO D
READ:UNKNOWN
TO: Paul K. Engskov@eop ( Paul K. Engskov@eop [ WHO ])
READ:UNKNOWN
TO: Anne M. Edwards@eop ( Anne M. Edwards@eop [ WHO ])
READ:UNKNOWN
TO: Steven A. Cohen@eop ( Steven A. Cohen@eop [ WHO )
READ:UNKNOWN
TO: Lori Anderson@eop (Lori Anderson@eop [ WHO ])
READ:UNKNOWN
TEXT:
Message Creation Date was at 30-JUL-1997 10:00:00
News Hour with Jim Lehrer:
ANALYZING THE BUDGET DEAL
Aired on JULY 29, 1997
Balance the budget in 5 years, give $91 billion in net tax breaks and
change
Medicare. The Congress and the White House appear to have a deal.
Following a
background report, John Kasich (R-OH), House Budget Committee
Chairman,
and Gene Sperling, the White House National Economic Advisor, discuss
the
merits of the plan. Economists then scrutinize their analysis, after
which
Kasich
and Sperling return to rebut criticisms.
CHARLES KRAUSE: Last night!,s deal was the
culmination of seven months of tough negotiating
between the White House and Republicans on
Capitol Hill.
SEN. TRENT LOTT, Majority
Leader: We have reached a
tentative agreement with the
administration on the Balanced
Budget Act and the tax relief
package.
CHARLES KRAUSE: The agreement contains a plan
to balance the federal budget by the year 2002. It
also promises the first major tax cuts in sixteen
years--a total of $91 billion over the next five years.
The agreement comes amid a booming economy and
increased tax revenues that have driven the deficit
down in recent years.
There are some observers who!, ve argued that with
the economy growing, a balanced budget isn!,t
necessary and could even be counterproductive. The
White House and Congress, however, felt the budget
plan was needed. Today, Congressional Democrats
traveled to the White House to hear President Clinton
praise the deal.
PRESIDENT CLINTON: This
agreement meets my goal of
balancing the budget in a way
that honors our values, invests
in our people, and prepares
America for the 21st century. It
is very, very good for our country. It's a victory for
every parent who wants a good education for their
children, for every child in a poor household who
needs health care, for every immigrant struggling to
make it here, for every family working to build a
secure future. It is the best investment we can make in
America's future.
CHARLES KRAUSE: On
Capitol Hill, the GOP
leadership also claimed
victory.
SEN. TRENT LOTT: Today we celebrate the
beginning of a new era of freedom. We have joined
the President, and we have come to an agreement that
will lead us to less Washington spending, to tax relief
for working Americans, to security for our senior
citizens, and less dependency on the government,
more responsibility, and
opportunity for individuals,
communities, and states.
This truly is a great moment.
We made a decision earlier this
year that we! re going to work together to get this
victory for the American people. And that!,s what it!,s
really about. It!,s not about partisan politics. It!,s not
about who!,s President or who!,s in the Congress. It!,s
about returning the government to the people.
CHARLES KRAUSE: There were only a few
dissenting voices, among them liberal Democrats, who
say the plan favors the wealthy.
DEFAZIO: It seems too
good to be true and you
know what, it is, it is. This is
not a new day in
Washington, DC. This is
business is usual, cutting up a
fat hog, make wildly optimistic assumptions about the
economy and revenues, cut social programs a little,
don't take a penny out of the Pentagon, and give a host of generous
tax
cuts slanted
toward the most wealthy in America and the largest corporations.
CHARLES KRAUSE: And at least one tobacco state Republican tempered
his
overall
support for the play by objecting to a proposed increase in cigarette
taxes.
COBLE: The inevitable tobacco tax, that, as you know,
this
has
been discussed on this Hill for several weeks now.
And we
from
the tobacco belt were waiting for the other shoe to
drop,
and it!,s
dropped.
CHARLES KRAUSE: Both the House and Senate are expected
to debate the budget agreement before leaving
Washington
for the
August recess.
JIM LEHRER: Two key players in all of this are with us now. Gene
Sperling
is
President Clinton!,s national economic adviser, and Republican
Congressman
John
Kasich of Ohio chairs the House Budget Committee. Gentlemen, let!,s
go
through the
main parts of this one at a time. First: tax credits for children,
$500 per child under age 17, $110,000 income limit for couples,
low-income families qualify. Mr. Sperling, what is this designed to
accomplish?
GENE SPERLING, National Economic Adviser: Well, this is
designed to help average working families who I think both Chairman
Kasich
and I
would both agree have not seen their after-tax incomes go up as much
as
any of us
would like over the last ten or fifteen years.
A family making $40,000 with two kids, this is giving them $1,000
more in
after-tax,
disposable incomes. That means a lot to a family. And it also says
that
after we balance
this budget and get the deficit reduction down,
we!,re
giving a
bit of dividend, and giving a bit of that dividend
back
to the
American people in terms of the tax relief, but
most
importantly
in continuing the lower interest rates and the
strong
investment
level expansion that we!, ve had in this economy
since
1993,
when the President decided to take some leadership
and
bring
this deficit down, and in the last year when we!, ve been able to
work
together with
Republicans to do it in a bipartisan fashion.
JIM LEHRER: Congressman Kasich, on the low income families being able
to
qualify,
now that was a compromise. You didn!,t want that in there at the
beginning, did you?
REP. JOHN KASICH, Budget Committee Chairman: Well, it was actually in
our
Contract with America, and the problem was we had limited amounts of
tax
cuts to
give. Fortunately, the package actually increased the amount of
tax relief that Americans would give. I, myself, am personally
very happy that this has worked out this way because I think
we!,re always interested in helping working Americans. And those
people who are at the lower income levels, you know, they can
go one of two ways, really. They can fall off the curve and find
themselves on welfare, which we do not want, or they can have a dream
of
being able
to get ahead.
And so I think that all working families being able to benefit under
$110,000 in income,
with this child credit, is wonderful. It was part of the Contract
with
America. I put it in.
the first budget in 1993, and it!,s designed to help families.
It!,s
designed to send some
power into people!,s pockets and is a shift away from Washington and
a
shift of some
influence and money back home. It!,s a good provision.
JIM LEHRER: Now, the capital gains tax cut. The
current rate is 28 percent. The deal under the
new
rate is
20 percent for assets held one to five years,
18
percent
for assets held more than five; 8 to 10 percent
for
incomes below $41,200. Now, Congressman Kasich,
this has been something you Republicans have
wanted
for
a long time. Why was it so important, and is
this
exactly
what you wanted?
REP. JOHN KASICH: Well, we wrote it in 1993, again, Jim, and we were
also--had
it in the Contract with America, and we!,re glad this is being
enacted for
a couple of
reasons. One is for the--a lot of Americans now are involved in
investment
income. In
fact, they estimate up to 50 percent of all households. And it!,s
risk-taking. It!,s
designed to say that if you take a risk, you ought to get a reward.
If we
make the
rewards of risk taking too high, it!,s common sense. People won!,t
take
risks.
We believe this will result in more investment and better job
creation. And, frankly, if you have a pension that is at all
dependent on mutual funds, for example, it!,s going to increase the
value of your pension. So there!,s no panacea--any single magic
bullet--but we think that it!,s something that!,s good for
virtually all
Americans.
JIM LEHRER: Now, Mr. Sperling, the President and other Democrats have
opposed
this for as long as the Republicans have been pushing it. And yet you
agreed to it.
Why?
GENE SPERLING: Well, we are clearly pushing our priorities in the tax
cut
bill. Our
priorities were a $1500 tuition tax credit for higher education, a 20
percent tuition tax
credit, a $500 per child tax credit. Those were the core tax credits
that
help middle
class and working families. Those were our priorities, but this is a
bipartisan budget
agreement. And they made very clear from the start that this was a
priority they had to
have; that they were going to go along with the increases in
education
spending and the
coverage of children!,s health care that we wanted very much.
I do think if we were going to do it, which,
again,
it wasn!,t
our priority, but if we were, I think putting a
focus
on more
patient capital, more longer-term investment, is
prob
ably a
sensible way to do it. And, in fact, I think
this is
going to
consider having the holding period for 18
months,
which in
many ways could promote longer-term investment
and
give
less of an incentive for more churning and
speculation.
JIM LEHRER: So in order to get what you want to get, you had to give
them
this.
That!,s the bottom line, right?
GENE SPERLING: You know, if you!, doing a bipartisan
budget agreement, you have to give the other side some wins, if
you want to get the things that are important to you.
JIM LEHRER: All right. Another one was the estate tax. Sec.
Rubin said on this program right after all of this began that this
was also something the administration did not support, and, yet, here
it
is. Why?
GENE SPERLING: Well, I think that we supported--
JIM LEHRER: Let me point out what this says.
GENE SPERLING: Yes.
JIM LEHRER: Let me make sure that people understand.
The
current exemption of estate taxes is $600,000. That
would
increase to $1.3 million for farms and businesses
right
now, and it
would increase to $1 million--the exemption
would--for all
estates
over the next 10 years. Okay. Go ahead. Why did you
go for
this?
GENE SPERLING: Well, we always favored some form of estate tax cut
relief.
Nobody believes that somebody who owns a family-owned business, a
small
business,
a family farm, should be forced to sell it to pay taxes. Everybody
agrees
that!,s wrong.
We had a more limited way of doing it initially, but we understood
that
that
principle--what we were most concerned about however, was not having
an
overall tax
cut that was going to have exploding costs in the second ten years.
That!,s the 10 years
when all of us should agree that we should be
focusing on
long-term entitlement reform. We don!,t want to be
draining
money away from the Treasury when we need that to
shore up
long-term Medicare and Social Security. What Sec.
Rubin
and
others of us who were negotiating focused on was
making
sure
the overall package was stable and kept the deficit
in
good shape
by dropping the capital gains indexing and by having some more
reasonable
restraints
on the IRS. We felt the overall package was good. The estate tax
relief
was probably a
bit more than we would have preferred.
JIM LEHRER: Then you, Republicans, Congressman Kasich--some--
REP. JOHN KASICH: Can I say one thing about that?
JIM LEHRER: Sure.
REP. JOHN KASICH: Because that!,s really a blow to liberalism
because when
you
die today and you!, ve spent a lifetime building something, you
don!,t just
visit the
undertaker, but you visit the IRS at the same time. And I think
this is an idea that when you work a lifetime, you ought to be
able to pass some of what you !,ve built onto your children. So
it !,s almost a cultural thing in a way, Jim. But all of these tax
cuts really represent a shift from the power of government.
And we have reduced the size of government and let people keep more
of
what they
earn. And that !,s what this is all about--the best example of us
entering
an era now
where we can begin to recognize the limits of government and the
importance
of
people.
JIM LEHRER: But some of you Republicans wanted the estate tax
eliminated
altogether. This is also--this also represents a compromise on both
of
your parts,
correct?
REP. JOHN KASICH: I think so, look. But, Jim, this is what we were
searching for,
and we !,re very pleased about it. Our people feel good, and it !,s
not just
the estate and
it !,s not just the capital gains. We !,re very happy with the pr
ogram the
President brought
to us to provide for help for education, for moms
and
dads, single
moms can educate their kids easier if, you know, mom
doesn !,t
have to go out and work as hard to send their kid to
college to
help her husband educate the kids. We love that. We
love
the
child tax credit. It !,s a balanced package. The
most
important
thing is it !,s paid for and it !,s part of an
overall
balanced budget.
JIM LEHRER: Now, the cigarette tax was one of the taxes you raised.
That
was easy,
right, Congressman?
REP. JOHN KASICH: Well, I personally am not happy with it not because
I !,m
for the
cigarettes. I just don !,t want any more revenue coming into the
government, but this
cigarette tax passed in the United States Senate, and it is part of t
his
package and, you
know, that !,s just part of it.
JIM LEHRER: Yes.
REP. JOHN KASICH: But our next cuts are $91 billion, which is,
obviously,
$6 billion
above the $85 where we started.
JIM LEHRER: It !,s now 24 cents a pack. That !,11 go to 10 cents--or
it will
increase 10
cents in the year 2000 and 5 cents more in the year 2002. Now, the
President wanted
that, Mr. Sperling, right?
GENE SPERLING: You bet he did. We wanted it to be 20
cents. And I !,11 tell you why. It !,s not just because it raises
revenue that can be used to provide up to 5 million children or
help to provide up to 5 million children more health care. It !,s
because 3,000 children a day start smoking, and 1,000 of them
will die prematurely because of tobacco. And the best deterrent
effect that a tobacco tax has is on preventing young children, young
teenagers, from
starting to smoke.
So we think that it was the revenues it took in for children !,s
health
care were positive,
but the deterrent effect it has on young teenagers from starting to
smoke
is a positive
thing, and the President absolutely supported it.
JIM LEHRER: Now, Mr. Sperling, the children !,s
health
insurance
part of this, which is $24 billion, will be through
block
grants to
the states. Now that will be financed partly by this
cigarette tax, is
that right?
GENE SPERLING: Well
JIM LEHRER: Yes and no?
GENE SPERLING: As you know, money is fungible. You can say it !,s
financed.
You
could say it any way you want. The fact was the President wanted $24
billion. He
wanted enough so we could try to cover 5 million children who don !,t
have
insurance
today. 80 to 90 percent of them are in working families. And we
wanted to
make sure
there was a meaningful benefit package.
We !,re not trying to put unnecessary strings on states, but we
want to say that when states get this money to provide coverage
for children, it needs to be a meaningful package. It should cover
vision and hearing, and the things all of us would want for any
child of ours to have when it comes to health care.
JIM LEHRER: Now, Congressman, does that create a new system, a new
plan, a
new
program, a new type of program?
REP. JOHN KASICH: Well, Jim, you know, it !,s important to note that
the
Republican
governors across this country have had a great passion to be able to
cover
more
people who do not have health insurance and those are generally the
people
who are
the working poor. They have asked the administration to give them
more
flexibility on
Medicaid so they would have more dollars to cover more people.
Frankly, I
don !,t
think we ought to have these waivers. I think we ought to let the gov
ernors cover
people in the best way that they know how.
JIM LEHRER: Wait a minute. Let me explain that.
REP. JOHN KASICH: This is additional help.
JIM LEHRER: Excuse me. Hold on just one second. We just want to
explain
when
you say waivers. Now the way the system works, that the state wants
to
come in and
apply for a waiver from the federal government to do it differently.
REP. JOHN KASICH: Right.
JIM LEHRER: I just wanted to explain that. Go
ahead.
REP. JOHN KASICH: I !,m sorry about that. That !,s
Washington talk.
JIM LEHRER: That !,s okay. That !,s all right.
REP. JOHN KASICH: But, look, this is additional help to the
governors--
JIM LEHRER: Okay.
REP. JOHN KASICH: --to be able to give them additional resources to
cover
the
people that they !,ve been passionately interested in covering, and I
think
it is a flexible
enough program, is not an entitlement. It is--
JIM LEHRER: But you !,re happy with $24 billion. That !,s
doesn !,t--that !,s
okay?
REP. JOHN KASICH: Well, I think we should have been at about 16, so
there
is
a--there is a give on this. The Senate Republicans passed 24, and
that !,s
where we
ended up. Unfortunately, the extra $8 billion will be phased in
over a period of time, and then we !,11 take a look at how this
whole program is working at some point in the future. But we !,re
really moving into uncharted territory when it comes to how many
people will actually be helped. That is the impact of this program.
JIM LEHRER: Now, on education, Mr. Sperling, this was one of the
President !,s main
things--up to $1500 per year college tuition credit for two years; a
20
percent tax
credit for the first $5,000 in school expenses for years three to
four. Wh
y was this so
important and what will this actually accomplish, Mr. Sperling?
GENE SPERLING: The President wanted to send both a signal and a
financial
incentive to everybody in this country that you need two years of
higher
education, just
like people need 11th and 12th grade before. And so this says that
for
everybody who
wants to go to at least a community college or to a regular four-year
college, that you
can have up to $1500, a $1500 education tax credit for your first two
years of school,
and if you go on to your third and fourth year, to grad school, for
lifetime learning,
education any time in your life, you can deduct 20 percent.
What that does is it reforms our tax code to say
that
we
believe that investing in education is the right
thing for
working families. It !,s the right thing for our
economy. It !,s
the right way for people to get ahead. And
we !,re
going to
try to give people an incentive to do it, and if
a
family is
doing the right thing and sending their kid to
college, we
want to make it easier for them to do the right
thing
for their
child and for this economy.
JIM LEHRER: Congressman, is that going to work?
REP. JOHN KASICH: Well, Jim, we !,re pleased that as Republicans that
we !,re going
to continue to emphasize education. We, of course, don !,t want to
just
focus on higher
education, but we like to have education choice, so that moms and d
ads can
force
competition at elementary and secondary level, and I think we all
recognize we have a
severe problem in our country with not all children being able to
benefit
from public
education. But education is a key.
Our only objection to the President !,s package was the way in which
he put
it together,
and, frankly, there was concern on both sides of the aisle up here
about
the nature of
that package, and I think we !,ve come a long way in shaping it in
the
right way, and
education is a key in a changing world, where technology is so
important,
technology is
real power, and it really translates into better wages for all
Americans.
We need this.
JIM LEHRER: All right. Now, finally, Medicare. It cuts payments to
health
providers
by $115 billion over five years; Medical Savings Accounts,
demonstration
project. But
what it does not do, there !,s no change in the age of eligibility, n
ot
means-testing for
wealthier seniors, no co-pay for health--for home health visits, very
small changes,
Congressman, right?
REP. JOHN KASICH: Well, let !,s not--Jim, in 1995, we
essentially proposed this package, and we were hammered
all over the country about this, and it has essentially been
adopted, and the level of savings and entitlements, Jim, is
going to be about $340 billion over the next 10 years. It !,s
just a staggering number and will preserve Medicare for 10
years.
And we give seniors more choice. We permit hospitals and doctors to
be
able to offer
services to our senior citizens, and we !,ve made an adjustment
between the
rural and
the urban areas, so there will be more opportunity, more competition,
more
choice for
our seniors. So let us not sell short the significant changes in the
program, but we also
have a commission that says that we will do a lot more heavy lifting,
because, as you
know, as the baby boomers start to retire, we !,re going to have a
crisis
between the
generations.
And I !,m very hopeful we !,11 have a good commission, a good report,
and
we !,11 have
even additional changes to this program. I would liked to have seen
them
happen now.
I supported them, and I argued for them. But I think we should be V
ery p
leased and
very happy with the level of changes and the amount of savings, and
the
extension of
the life of Medicare in this package. Let !,s not take it for
granted.
Let !,s not take it for
granted. Let !,s have a little celebration about this.
JIM LEHRER: Mr. Sperling, how would you characterize the gravity of
the
changes in
Medicare that this program has?
GENE SPERLING: Well, here is one point that John
Kasich
and
I agree on. People need to look at this package. I
actually think
John--it !,s about $400 billion in savings over 10
years.
REP. JOHN KASICH: I !,m sorry. There !,s a nickel
and a dime
there, Gene. You !,re right.
JIM LEHRER: Missed it by a bill or so. Go ahead.
GENE SPERLING: I don !,t agree that it is like the plan in !+95, but
I
think what it is,
and I think it was an honorable compromise between the balanced
budget
plan the
President had in !+96 and where the Republicans were, and this is a
signi
ficant amount
of savings. It restores the Medicare Trust Fund. So you !,re talking
about
$400 billion
over 10 years, but more importantly, we !,re restructuring the
payment
systems in the
places where you !,re having exploding costs, like home health care,
skilled nurse
facilities. There !,s things in here that prevent home health care
fraud.
There !,s more choice. I think this is one of the true places where
the
President worked
with Democrats and Republicans to break gridlock and do something
significant. So I
agree people need to look at how significant this Medicare savings
package
is. It !,s a
big first step. Again, I agree, we need a long-term process to do
more,
but I also think
a long-term process to address the long-term Medicare problems for
the baby
boomers !, retirement, as well as for Social Security, but I think
there !,s
things we could
do without waiting for a commission, and one of them is a high income
premium
increase.
The President supported that. It took political courage. I think a
lot of
Republicans and
Democrats want to go along. That !,s something that we could get
done; it
would add
some additional savings; and would be a good structure--restructuring
for
the future.
REP. JOHN KASICH: Jim, it !,s fair to say that Gene Sperling
and I are both committed as baby boomers--to not only fixing
Medicare on a long-term basis but also beginning to solve the
problems related to Medicaid and Social Security--what we
needed to take this first step to gain a little confidence with the
public, we could actually manage entitlements without harm
coming to them. So I think that this is the reason to be very happy.
JIM LEHRER: Okay. Don !,t go away, gentlemen. We !,re going to come
back to
you in
a few minutes, because we want to get some contrary views now to this
deal, and we !,11
come back and let you respond.
(Break)
MARGARET WARNER: And for a more critical
perspective on the budget deal we !,re joined by
William Niskanen, chairman of the Cato Institute and
former chairman of President Reagan !,s Council of
Economic Advisers; and
Robert Kuttner, economics
writer and editor of the
American Prospect. Mr.
Niskanen, your overview
on this budget deal.
WILLIAM NISKANEN, Cato Institute: In the name
of balancing the budget, our political leaders have
done what they most like to do, which is to increase
spending and reduce taxes for favored constituencies.
It !,s much more important for the American public,
however, to realize what is not in this budget deal. It
does not reduce the deficit faster than if there were no
deal.
It does not increase economic
growth. It does not control
entitlements. In fact, it added
two new entitlements: one for
kiddie care and one for college
education. It does not restructure
defense to reflect the realities of
the post Cold War world. And it does not move
toward tax reform. And it does not limit the relative
size of government in the United States. Those are
major objectives that most Republicans have shared
for a long period of time, none of which they have
even moved toward in this agreement.
MARGARET WARNER: All right. Mr. Kuttner,
briefly, your overview on this deal.
ROBERT KUTTNER,
American Prospect: Well, I
think it !,s a very Republican
deal, and I think Mr. Clinton
played a weak hand rather well
tactically, but his hand was
weak because he had embraced so much of the
Republican program going in, so that to mix the
metaphor, when the other shoe dropped, it was
hardly a surprise that the Republicans have
gotten--had gotten most of what they wanted.
Clinton did succeed in a
few things: defending
Medicare, making sure
that some of the tax
benefits went to lower
income people, as well as
higher income people. But
when you realize that he embraced the goal of budget
balance a year ago, as well as significant cuts in
capital gains, and cuts in entitlements, and estate tax
relief, this was a mostly Republican budget, and he
did so at the expense of his own party.
It contrasts rather dramatically with Ronald Reagan !,s
presidency, where Reagan for much of his term had
the Democratic Congress. But he succeeded moving
the ball in his direction, and Clinton really moved the
ball in the direction of the opposition party.
MARGARET WARNER:
Okay, Mr. Niskanen, back
to you and the conservative
critique. Now, you said--let !,s
go into a couple of these
specifics--does not promote
economic growth. We just heard John Kasich say
these tax cuts are going to stimulate investment and
move power away from Washington.
WILLIAM NISKANEN: Well, you have to reduce
marginal tax rates to increase economic growth. And
some elements of this package actually increase
marginal tax rates, like the phase-out provisions of the child
credit. The
capital gains cut
by itself is not likely to be very helpful if you don !,t correct
other
features in the tax
code. It !,s important to cut capital gains taxes but only as part of
the
general tax reform.
Cutting capital gains taxes, itself, can lead to a mis-allocation of
capital and will be
perceived as being an unfair tax cut to the rich.
MARGARET WARNER: All right. Now, another critique you made was that
you
said
it essentially doesn !,t balance the budget faster than would have
happened
with nothing.
Explain that.
WILLIAM NISKANEN: If Congress went home, the budget
would be balanced faster than with this deal. The budget this--the
budget deficit this year will be in the order of 40 to 50 billion
dollars. It would be easy to balance the budget next year, not in
the year 2002, if either the President or Congress, or preferably
both, were at all serious about it.
In fact, what this budget deal does--it puts--the budget until the
year
2002, rather than
what would be an easier task if they were serious about it to balance
it
in the year
1998. I tend not to pay much attention to promises by politicians
that are
two
congressional elections and one presidential election away in which
most
of the
presumed budget cuts will be made in the years 2001 and 2002, years
beyond
that of
many existing politicians.
MARGARET WARNER: You also said it doesn !,t control the growth of
entitlements;
yet, we just heard Gene Sperling and John Kasich say it !,s a 360 to
400
billion dollars
worth of savings in Medicare.
WILLIAM NISKANEN: Those Medicare savings, those presumed Medicare
savings
are a consequence of continuing to squeeze the providers.
MARGARET WARNER: Doctors and hospitals.
WILLIAM NISKANEN: The doctors, nurses, hospitals,
orderlies, medical assistance, and so forth, who
provide
medical care for the aged--under the Medicare
program.
I
think that process cannot continue very long
without
either
physicians and hospitals withdrawing from the
service
of
Medicare people, or moving one way or the other to providing second
or
third class
service to this group.
You have to change the benefits structure of Medicare in order to
preserve
it over a
longer period of time. They backed away from that at the last minute.
This
is not a
serious reform. They !,re going to have to balance--address the reform
ag
ain in a matter
of a few years. They have--by accounting conventions they have
extended
the life of
the Medicare trust fund, but in no way that particularly affects the
budget.
MARGARET WARNER: You also said--I didn !,t jot down
those words--but essentially it doesn !,t control
the
growth of
government. Now, again, John Kasich, this is a big
Republican
ideal and goal--said this helps transfer power and
money away
from Washington.
WILLIAM NISKANEN: I don !,t understand how they do that. It increases
spending
even relative to what President Clinton proposed earlier this winter.
And
the federal
budget typically falls alot, after the end of each military buildup.
It did
not do that after
the Vietnamese War-- we spent that money on domestic programs. It has
done
that
with the big draw down of the Reagan build-up we were down maybe
$100
billion
from the Reagan peak, that money is being spent, rather than returned
to
the people.
MARGARET WARNER: All right. Mr. Kuttner, your critique. Tell me--I
mean, we
heard Gene Sperling say a lot of this was designed to help low and
moderate income,
hard working, ordinary Americans, these tax cuts, for instance, the
tax
credit, the
education credit. You don !,t see it that way.
ROBERT KUTTNER: The big ticket item is capital gains, and almost 50
percent of the
stocks and bonds in this country are owned by the richest 1 percent
of
families. So I
think the administration really gave the store away, after
fighting for decades and decades against the idea for the
capital gains relief. This is an economy in which the stock
market has doubled in two and a half years. It !,s doubled
again in less than a decade, and if there !,s any group that
doesn !,t need icing on the cake, I mean, it !,s people who
have large capital gains.
MARGARET WARNER: But what about--I mean, if you look at the--in the
aggregate--the child tax credit is going to cost the government a lot
more
than this
capital gains cut, at least in the early years. Are you saying
that !,s not
useful to low and
moderate income?
ROBERT KUTTNER: I think especially for the working
families that Gene Sperling talked about that !,s a
very
good
thing. The standard deductions and exemptions have
not
kept
pace with inflation, and working families certainly
deserve more
tax relief. I don !,t think it was necessary to go
all
the way up to
$110,000 family income. And neither did the
President,
but he
gave that one away too.
MARGARET WARNER: All right. Now, on the spending side, what do you
make of
the spending priorities?
ROBERT KUTTNER: Well, I think a lot of educators justifiably
criticized a
tax credit
for college in the sense that it goes to people whether or not
there !,s a financial need. Some people think that this is just
going to result in higher tuitions. Some people think that it !,s
just going to replenish state budgets because they !,11 just turn
around and raise junior college tuition. Most educators I !, ve
talked to said it would be much better to target this money
by increasing Pell grants to people who really need the
money.
MARGARET WARNER: I see. And then also Gene Sperling pointed to--and
the
White House has actual new spending programs for low and moderate
income
people,
such as the 24 billion dollars for additional health insurance for
poor
kids or kids from
poor families. What about that?
ROBERT KUTTNER: Well, I think that !,s a very worthy objective. I
think
it !,s
unfortunate that this particular program creates an even more
fragmented
health system.
If you look at a low income working family, one year the breadwinner
may
be a job
that provides health insurance, the next year that person may lose a
job,
and be in this
new program.
The third year they may be still poor; they may be in Medicare, so
that
the child is
shuttled from one health insurance system to another. It would be
much
better to simply
have a comprehensive program that covered all kids,
but
this
does at least provide health insurance for kids from
poor
families.
Give the President some credit. He did fight for
priorities that
made this less of a tax program for the rich. I !,m
just
concerned
that he gave away a lot of principles going on. And
in
that sense,
most of the outcome was foreordained.
MARGARET WARNER: All right. Thank you both very much.
(Break)
JIM LEHRER: Now, back now to House Budget
Chairman John Kasich and White House Economic
Adviser Gene Sperling. Take
that, Kasich and Sperling.
Let !,s begin with you, Mr.
Sperling, and what Mr.
Kuttner just said. He said the
President just gave it away to
the Republicans, gave away the store, capital gains,
the whole thing.
GENE SPERLING: I !,m kind of torn between which
of the two I disagree more with. Bob Kuttner !,s a
friend. He !,s done a lot to advocate the interest of
working class Americans, but, you know, John
Kasich and I are here. We !,re here dealing with
reality, which is we have a Democratic President,
Republican Congress, and we decided to try to work
together and get something done. And we have $24
billion here for low income children, 5 million children.
That !,s a lot of children to get health care coverage.
We have nearly $20 billion to families making under
$30,000 for the child tax credit.
We restore $12 billion for over 350,000 legal
immigrants. All of that stock, all of that helped lower
income families--would not
have happened if this President
was not willing to engage in a
bipartisan budget agreement.
So you want to get those things
done. You have to work with
the other side. I think it was a good deal for the
President, a good deal for progressives, but I
obviously had to have some of the wins and some of
the priorities of people that have some different
philosophies. That !,s how you get things done.
JIM LEHRER: Speaking of
the other side, Congressman
Kasich, Mr. Niskanen said it
would have been easier to
balance the budget without
doing anything.
REP. JOHN KASICH: Well, in the amazing words of
Ronald Reagan, to some of the critics of this
agreement, "There you go again." Look, there are no
new--the problem is the gentleman is factually
incorrect. First of all, we cut the President !,s budget
by about $9 billion in the first year and by about $115
billion over these five years. He said that we actually
spent more than what the President requested. He is
wrong. Secondly, he said there were new entitlement
programs. That is false.
There are no new entitlement
programs in this. He said we
would balance the budget by
1998. According to the last
Congressional Budget Office
numbers, the deficit in 2002
would be about $100 billion if we did nothing. In
addition, he says, there were no significant changes in
any entitlements. Medicare alone is $430 billion. And,
as I pointed out throughout this week, hospitals are
making about 15 percent profit on every person that
they treat. So it is absolutely--
JIM LEHRER: You !,re not squeezing it. This doesn !,t
squeeze them.
REP. JOHN KASICH:
We !,re not squeezing
them. That !,s why they
didn !,t come up here and
raise Cain. We !,re going to
have to do more with the
individuals in the next
round, but boy, this is far from squeezing them in Medicaid. We !,ve
given
the governors
more authority. They !,re going to be able to cover more people.
They !,re
not going to
have to have this Boren Amendment, which negotiates the rates that we
pay
hospitals,
dictated from Washington.
And, in fact, we have a balanced budget, and for the first time
I !,ve
actually heard a
conservative say he doesn !,t like the capital gains tax cut. Look,
what
you have is the
first balanced budget with conservative economics. It will hold the
growth
of the
programs that run Washington to the growth of R percent a year, as
compared to a
growth rate of 6 percent a year over the last decade, and the
entitlement
savings are the
greatest in history, so we !,ve done something that hasn !,t been
done in
modern times.
We are balancing the budget and providing tax relief, and I think
it !,s
good and our
guests ought to be happy. This is a reason to be in a good mood.
JIM LEHRER: All right. But, Mr. Sperling, Mr.
Niskanen
said this
does not reduce the size of government.
REP. JOHN KASICH: Well, sure it does. Let me tell you
what
it
does.
JIM LEHRER: Okay. Let me ask--let me let Mr. Sperling speak to that.
Just
a minute,
Congressman.
GENE SPERLING: With all respect to Mr. Niskanen, someone on my staff
looked
back and found that five years ago on August 3rd, as we were about to
pass
the 1993
deficit reduction plan, the deficit was $290 billion. He said the
deficit
would go up; a
recession was likely; and would probably be at $400 billion. Well,
the
deficit !,s come
down dramatically.
That deficit reduction has worked. And our projections show that even
with
a better
economy, the deficit will go down a little lower than we expected
this
year, and then
will shift back up. Without this deficit reduction plan, I don !,t th
ink
we can get the confidence in the economy to keep interest rates
low and the expansion going. So I think there !,s been a clear
connection between deficit reduction, lower interest rates, and a
stronger economy, and it makes sense for Democrats and
Republicans to come together and keep the strong economy
going.
JIM LEHRER: All right. And speaking of going, we can !,t go any
further.
Thank you
both very much for explaining this and being with tonight. And our
thanks
also to Mr.
Niskanen and Mr. Kuttner.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
CREATOR: Dag Vega@EOP@LNGTWY@LNGTWY (Dag Vega@EOP@LNGTWY@LNGTWY [ WHO ])
CREATION DATE/TIME: 4-AUG-1997 08:38:41.00
SUBJECT: CNN: Late Edition, 8/3/97
TO: [email protected]@INET@LNGTWY ([email protected]@INET@LNGTWY [ OSTP ])
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TO: Gene B. Sperling@eop ( Gene B. Sperling@eop [ OPD ])
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TEXT:
Message Creation Date was at 4-AUG-1997 08:24:00
Late Edition with Frank Sesno
Aired August 3, 1997 - 12:00 a.m. ET
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL:
not really words of consolation from the
Palestinian
Authority,
from its leader. What we expect is action.
(END VIDEO CLIP)
JEANNE MESERVE, CNN: In the wake of suicide bombings in
the Jerusalem market, what's ahead now for the peace
process?
And in Washington, a banner week. Congress agrees to
balance
the
budget. A special interview with House Republican
leader Dick
Armey.
All straight ahead, on LATE EDITION.
ANNOUNCER: Live from CNN in Washington, this is LATE
EDITION with Frank Sesno.
MESERVE: It's Sunday August 3, 1997. Welcome to LATE
EDITION, seen live across the United States and around
the
world.
I'm Jeanne Meserve. Frank Sesno is off.
Earlier, he sat down with a man very much in the middle
of
things on
Capitol Hill lately, House Majority Leader Dick Armey,
a
major
player in the budget talks, which produced the balanced
budget
agreement, passed by both houses of Congress this past
week.
Mr. Armey, according to many accounts, was also right
in the
middle of the recent attempt to unseat House Speaker
Newt
Gingrich. He will talk about both those things in our
interview.
Also today, renewed violence in the Middle East, with
this
week's
marketplace bombings in Jerusalem. We'll talk about the
peace
process once again in grave jeopardy with Dore Gold,
Israel's
newly appointed ambassador to the United Nations, and
Chief
Palestinian Negotiator Saeb Erekat.
Later, round the table on the week's politics with
Roberts,
Brownstein and Blankley. And Bruce Morton's Last Word
on a
kind of special strength.
(NEWS SUMMARY)
MESERVE: Just as negotiators in the Middle East peace
process
were making their way back to the table, bloodshed in
Jerusalem.
This time, twin bombs in a busy open market killed 15,
including
two suicide bombers. The terrorist group Hamas is
taking
credit for
the attack.
Israeli Prime Minister Benjamin Netanyahu, who won the
election
on a plank of peace with security, denounced Yasser
Arafat
for not
preventing the violence. He then suspended peace talks,
sealed off
the West Bank, and increased Israeli police patrols.
Arafat
is calling
the security clamp down a "declaration of war" on the
Palestinians.
So what does all this mean for the peace process?
Joining me
now
from Jerusalem Dore Gold, Israel's new ambassador to
the
United
Nations, and chief Palestinian negotiator Saeb Erekat.
Thank
you
both for joining us here today.
Mr. Gold, let me start with you. Hamas, in claiming
responsibility for
the bombings, set a deadline for the release of
prisoners,
which will
pass, I think, about an hour from now. What do you expec
t
will
happen after that deadline comes and goes?
GOLD: Well, we haven't been able to necessarily
authenticate
this
warning, but the key question is whether Mr. Arafat
will
begin to
deal with the Hamas with the same seriousness as other
Middle
Eastern leaders deal with their fundamentalist
opposition.
It is
absolutely necessary now to take apart the military
infrastructure of
Hamas in order to prevent these kinds of outbreaks of
terrorism, of
killing of innocent civilians from occurring.
MESERVE: Mr. Erekat, what can you tell us the
Palestinian
Authority has done vis-a-vis terrorists since these
bombings?
EREKAT: What I think the Palestinian Authority had
dealt a
severe
blow to terrorists or would-be terrorists. Regardless
of
what you
said about Hamas, Hamas has officially denied any
involvement in
this activity.
So far, we don't have a shred of evidence or proof in
who
perpetrated that act. But Mr. Netanyahu, instead of
accepting
President Arafat's offer to join him in fighting terror
and
the enemies
of peace, he declared a series of collective-punishment
measures
against the Palestinian people, and today three million
Palestinians
are suffering, suffocating under siege of food, of
medicines
and so
on. People are stranded at the international passages.
And we urge Mr. Netanyahu to stop shooting himself in
the
foot and
to accept President Arafat's offer to join together in
order
to fight
the enemies of peace. Terror should not be rewarded,
and so
far
Mr. Netanyahu has suspended the negotiations, and
that's
what the
terrorists wanted. He breaks down the relation between
the
Palestinian Authority and Israel.
And also, he is making the idea of peace dying in the
mind of
Palestinians, because three million Palestinians, as I
said,
are under
siege. As one
MESERVE: Let me ask again, what exactly has the
Palestinian
Authority done in the days since the bombing to stop
terrorism?
EREKAT: Well, let me tell you something. On Monday, last
Monday, Mr. Netanyahu was saying that in his prime
ministership
no terrorists activities occurred and that the
Palestinians
understood
that these would not be tolerated with terror.
So, in the lines of this statement, he was saying that
the
Palestinian
Authority did -- there were major breakdowns on terror.
President
Arafat said that he will not tolerate terror or
violence
against Israelis
or Palestinians regardless of the motives or the
purposes of
the
individuals behind it.
MESERVE: But these bombings would seem to say that the
measures that were taken were not sufficient.
EREKAT: Who did these bombings? We don't have a shred of
evidence or proof at who did these incidents. And yet,
Mr.
Netanyahu was offered by President Arafat to join
together
in order
to find out who is behind these terrorists activities
and in
order to
stop the repetition of the occurrence of another
terrorists
activity.
That's the most important thing.
MESERVE: Mr. Gold, do we know who these people are,
where
they come from, what country or group may have been
behind
them?
GOLD: Well, we have considerable evidence that points
in
certain
directions. But let me just say one thing. Terrorism
doesn't
spring
out of the middle of nowhere. It doesn't occur because
somebody's
GNP per capita has dropped or because somebody's
refrigerator
isn't working.
Terrorism springs up because there is an organization.
There
is
infrastructure. There is somebody who is mobilizing
activists, who is
paying off families of suicide bombers, who is scouting
an
area to
see what time there is a large population gathering in
a
particular site
in Jerusalem.
This organization is what we call infrastructure. There
is an
infrastructure of Hamas. There is an infrastructure of
Islamic Jihad.
Now, if Mr. Arafat had indeed made a 100 percent effort
and
somehow a unit had slipped through, one could
understand
that he
had made an effort. But in this case, what we have over
the
last six
to eight months is a constant revolving door of
terrorists
being seized
and then let out into the streets again.
I'm not speaking about activists who are involved in
working
in
mosques and in helping day care centers of righteous
Muslims. I'm
speaking about people who are trained in the use of
explosives,
people who have been trained in Iran in some cases.
MESERVE: Mr. Erekat
GOLD: These people are now on the street. And they are
now
organizing. And this creates the infrastructure that
allows
these
terrorist attacks.
One thing is clear. Some people may be telling Mr.
Arafat
that he is
now in the Lebanon refugee camps, that he's fighting
Israel,
like he's
fighting the Christian Falangists. We will not permit
the
Lebanonization of Israel. And that is something
absolutely
clear on
the part of Mr. Netanyahu, the prime minister of
Israel.
MESERVE: Mr. Gold, have you spurned an offer from Mr.
Arafat
to help track down the source of these bombers?
GOLD: Well, we have always said that security
cooperation
with
the Palestinian Authority is part of the core bargain
of
Oslo. And we
are ready to resume that core bargain
MESERVE: Mr. Erekat says he's offered that. Mr. Erekat
says
that
has been offered and that it was spurned by the
Netanyahu
government. Can you respond to that?
GOLD: Well, I don't think that's exactly correct. One
of the
problems we've had -- for example, the head of
preventive
security
of the Palestinian Authority in the West Bank, Mr.
Jibril
Rajoub,
right before these explosions occurred, stated that
Israel
would not
get any security cooperation with the Palestinian
Authority.
Israel
would not get security unless it made certain tangible
concessions.
Security for the peace process to work must be a
constant.
It must
not be contingent. It must not be dependent on Israeli
concessions.
Security for the peace process to work must be a
constant.
It must
not be contingent. It must not be dependent on Israeli
concessions.
We believe that we can make the peace process work even
though
it is an impaired peace process. But serious security
steps
must be
taken to create confidence between the parties. That is
how
we
made peace with Egypt. That is how we made peace with
Jordan.
And that's how we want to make peace with the
Palestinians.
MESERVE: Mr. Gold, you acknowledge that you don't know
exactly where these terrorists come from or who might
have
been
behind them. And yet, your government has indeed imposed
security restrictions on all the Palestinians in the
West
Bank and
Gaza.
Have you, in fact, as Mr. Arafat says, in essence
declared
war on
the Palestinians?
GOLD: Well, we haven't declared war on the
Palestinians. You
know, all these months that we've had difficulties
while the
Palestinians have been holding back -- the Palestinian
Authority has
been holding back security cooperation with us -- we
didn't
put in
closure. We allowed Palestinians to work in our
economy, to
bring
home a day's pay, to be able to improve their
conditions.
But when our people are threatened by these kinds of
bombings,
when hundreds of Israelis can be exposed to these kinds
of
bombings in our major cities, we have a right to defend
ourselves.
GOLD: And if in defending ourselves we won't allow
Palestinians
into our economy for a period of time while we track
down
these
terrorists, that's the price.
MESERVE: Mr. Erekat, are these limitations to how much
Mr.
Arafat can do to crack down in the extremists? Does he
risk
looking
like a collaborator with Israel?
EREKAT: Mr. Arafat's committed to the peace process.
He's 100
percent with us. We did not blame the Israeli
government
when one
of their soldiers massacred 30 Palestinians in Hebron.
We
did not
blame the Israeli government when one of their soldiers
again started
shooting at people in Hebron at the beginning of this
year.
But once again, we urge the Israeli government to
resort to
sanity,
wisdom and courage. It's not time to assign blame. Mr.
Netanyahu's
policies of settlements in lateral steps, confiscation
of
land,
non-implementation of the agreements are very
well-known.
But now the most important thing is not to have a
repetition
of the
terrorist activity of Jerusalem last Wednesday. And
this
requires
joint Palestinian-Israeli efforts. Mr. Netanyahu,
instead of
accepting
the offer which is a valid offer, I'm saying it right
openly
in my
capacity as President Arafat's negotiating delegation
in
order to
investigate together of who did these terrorist activit
ies,
and at the
same time, to prevent another occurrence.
Now if Mr. Netanyahu wants to export his crisis to us,
Mr.
Netanyahu, by taking these steps of not allowing
medicine,
food,
supplies, the money transferred to the Palestinians was
60
percent
of the total budget of the Palestinian Authority -- I
mean,
Israel has
no right whatsoever to apply collective punishment that
would affect
the lives of three million Palestinians.
MESERVE: What would you have Israel do? These things
have
happened in waves in the past. Would you have Israel
sit on
its
hands and wait for the next bombing?
EREKAT: No one is tolerating what happened last
Wednesday. As
a matter of fact, President Arafat openly condemned the
attack. We
condemned these attacks, and we are offering to
cooperate
with
Israeli security authorities and with Mr. Netanyahu in
order
to find
out who is behind these activities.
MESERVE: I do want to move on to the peace process. I'd
like
to
ask each one of you what you are willing to do to try
and
get the
peace process moving again. Mr. Erekat, let's start
with
you.
EREKAT: I think now every possible effort must be
exerted to
restore confidence and credibility to the peace process
and
to put
the peace process back on track. I think Arafat's offer
as
far as
cooperation security with Israelis is valid and stands.
And
I hope
that Mr. Netanyahu will stop these collective measures
and
this war
against the Palestinian people.
And I hope that the American administration and the
Egyptians will
continue their efforts in order to put the peace
process
back on
track by achieving the implementation of the agreement
signed and
by restoring the confidence and credibility that was
lost
due to the
Israeli lateral step of settlement building,
confiscation of
land,
demolition of homes and non-implementation of their
agreements.
MESERVE: Mr. Gold, let me ask you, what specifically is
your
government willing to do right now -- not what the
Palestinians will
do -- what will your government do to get this peace
process
moving?
GOLD: Well, I think we have to go back to the core
bargain of
Oslo that existed when our late Prime Minister Yitzhak
Rabin
shook
hands with Mr. Arafat back in 1993. And I'm afraid that
does
require as a first step building confidence in the area
of
security.
The Palestinians were supposed to give security. Israel
was
supposed to address Palestinian aspirations. That was
the
core
bargain.
In the meantime, we've had a green light to terrorism
back
in March.
We've had Brigadier General Ghazi Jabali, one of the
heads
of the
Palestinian police force, who we have definite evidence
is
linked to
terrorist cells -- the man should not be running free.
He
should be
grabbed.
If we had a high-level officer in our army who was
involved
in any
kind of terrorist act against Palestinians, we'd let
him run
free? It's
ridiculous.
We have had incitement in the city of Hebron. We've had
violations
of a protocol we've put together. Let us first of all
adhere
to our
respective commitments. Don't impose other commitments
on the
parties. Let us follow when Mr. Erekat and I sat
together
and we
spoke about a note for the record, a post-Hebron road
map of
how
the agreement would develop. Let's go back to the note
for
the
record.
MESERVE: We have to leave it there, I'm afraid.
Unfortunately,
we've run out of time.
Dore Gold and Saeb Erekat, thank you both for joining
us from
Jerusalem.
Dean Fischer, "TIME" diplomatic correspondent, is
joining me
now
here in Washington.
You heard these two gentlemen. Did you hear a glimmer
of
hope in
what they had to say?
DEAN FISCHER, "TIME" CORRESPONDENT: There's a
long-term hope that somehow the peace process can be
put back
on track. But I really think myself that it's
imperative
that the Clinton
administration take a much more active and aggressive
role
than
they have done in recent months.
MESERVE: Specifically, would you recommend they do?
FISCHER: Well, they have -- the president did announce
that
Dennis Ross, the special Middle East negotiator, will
be
going back
out to the region at the end of this week at the
conclusion
of the
seven-day mourning period.
MESERVE: And what will he be carrying in his hands?
FISCHER: He will be going there, according to what I am
told, to
ascertain the extent to which the security situation is
becoming
stabilized. Secondly, he will try to do his best to do
what
his
purpose was in going originally, which was to resume
negotiations
over certain issues that were left outstanding from
previous
talks.
MESERVE: Is Mr. Ross in some jeopardy? I understand your
reporting has uncovered something in that regard.
FISCHER: Well, it's not surprising that he has been the
suspected
target of a number of assassination reports.
FISCHER: None of them have been described by
administration
officials as what they call "near-miss events." I think
this
probably
goes with the territory. And when you become that
visible
and that
involved and that engaged in peacemaking, you do in
fact
become a
target for extremist activity.
MESERVE: The administration has talked about the need
to
rebuild
trust between the parties. How does it do that?
FISCHER: Well, I think the plan is that after Mr. Ross
goes
out
there, they would like to send Secretary of State
Albright
out at the
end of the month, or early in September, to build on
whatever he is
able to accomplish when he is there. I also think,
though,
that it's
important that the president take an even more active
role
than he
has heretofore.
It might even be worthwhile considering the appointment
of a
special
negotiator, someone of the caliber and reputation of
Jim
Baker, the
former secretary of state, who managed to get the two
parties
together at Madrid, which laid the basis for the peace
process that
we're now seeing.
MESERVE: Do you know if that's under active
consideration by
the
administration?
FISCHER: I've heard a lot of speculation around town
about
it, but
I cannot honestly say that the administration is
seriously
considering
it.
MESERVE: And we have to leave it there. Jim Fischer of
"TIME"
Magazine, thanks for coming in.
FISCHER: Thank you.
MESERVE: When we come back, the landmark budget deal,
and
the future of Newt Gingrich. Frank Sesno sits down for
a
special
interview with House Republican leader Dick Armey,
next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
U.S. REPRESENTATIVE NEWT GINGRICH (R-GA): Look at
this as a promise that you ain't seen nothing yet. Even
more
(APPLAUSE)
Thank you.
(END VIDEO CLIP)
MESERVE: Welcome back. Congress has cleared out of
Washington for their summer holiday with a major
achievement
under their belts, passing the balanced budget
agreement.
Before
they left, Frank Sesno sat down with one of the key
figures
in getting
that done, the House's Republican leader, Dick Armey.
FRANK SESNO, HOST, CNN LATE EDITION: Congressman,
thanks very much for joining us.
ARMEY: Well, thank you for having me.
SESNO: The budget deal is done. John Kasich,
Republican, says
that it's another Berlin Wall coming down, it's a dream
come
true.
The president, Democrat, calls it the achievement of a
generation.
It's good. It may be the best you could have gotten.
But is
the job,
in your view, of cutting government -- is that job
finished?
ARMEY: No, I, you know -- and of course politicians do
hyperbole. That's what their stock in trade is. But the
fact
is what
they're doing's important.
SESNO: Is that what they're doing?
ARMEY: They are doing it. And it is important. And we
ought
not
to lose sight of it. There are people like myself,
Senator
Gramm and
others who've said that the real problem is the size of
government
and we need to focus on that and there's more work to
be
done.
But getting to a real balanced budget, getting tax
reductions for the
American family, saving Medicare at least from the
immediate
death
throes of insolvency that it was -- faced, these are
important things,
and they are things, as you know, that were difficult.
SESNO: Congress is out on break. When it comes back, do
you
go
back to the business of cutting government?
ARMEY: I think what we -- we've got a lot of work to
do. We
have got to go back and shore up welfare reform. I
think one
of the
very important pieces of legislation we're going to
have to
do is sort
of plug the cracks with respect to labor standards that
make
work
-- from welfare to work. That of course is cutting
government at the
federal level. We've got other areas where we can make
an
a
greater emphasis on the greater effectiveness of the
private
sector.
SESNO: Following this balanced budget deal and tax cut,
we
took
a poll, CNN took a poll, and we found that 45 percent
say
they
now approve of the way the Congress is handling its
job.
This is
really historic. It's the highest approval rating for
the
Congress since
Richard Nixon resigned, since the '70s. What do you
believe
Congress needs to do to make this stick?
ARMEY: I think we need to continue doing good work for
the
American people, and we need to also have them
appreciate not
only the work we do, but the way we handle ourselves in
doing the
work. I think, for example, if we come back now with a
package of
-- that focuses on the inner cities with things like
enterprise zones,
greater emphasis on encouragement to the faith-based
charities as
they work in the inner communities. And people see us
caring
and
working on behalf of helping people improve their lot
school
choice, I think, is a very, very big thing that's
become
elevated from
this last week's work.
SESNO: Now again in this poll, we asked who was more
responsible for the budget agreement -- 41 percent said
the
Congress, Republicans; 32 percent said the president.
Do you
think
Republicans are getting the credit because they
compromised
with
this Democratic president?
ARMEY: Well, I think what they saw is we worked with the
president, This was our -- our whole budget was built
on the
principles of the Republican Party.
ARMEY: The president said: I want in on the action. I
want a
legacy. I want the people to love me as much as they
love
this kind
of program that I campaigned on. So I must govern. He
managed to
interject some of his details into the package of our
principles.
But I think the nation clearly saw this has been the
Republicans
agenda all along. It was in their Contract With
America. The
president resisted it and found himself not too popular
in
the effort.
And now he wants his legacy, so he's joining us.
I think they correctly understood we took the lead here
and
the
president followed us along the way to get to the
point
SESNO: But the lesson
ARMEY: of the nation.
SESNO:
as far as you're concerned is that the
Republican
Congress needs to continue to compromise with the
Democratic
president?
ARMEY: Again, I think if we are willing to continue to
lead
the
nation by accepting the values of the American people,
and
saying,
these are the principle's of governance we know to be
important to
the American people. And then, demonstrate that with a
willingness
to say to the president, we want you to be in the deal
working with
us, and you have some details, we're not going to turn
a
deaf ear to
you, we want you to be along. And if you want to put
some of
your
details into the package, along as it doesn't
compromise the
principle, we'll do that.
SESNO: A lot of conservative Republicans are sounding
off on
talk
radio, and they say that you've compromised too much.
They
feel
that the conservative base is not going to have a
reason to
turn out,
perhaps, in the next election.
They're disappointed. What do you say to them?
ARMEY: Well, I was laughing at "we conservatives." I'm a
conservative. A conservative is almost by definition an
enemy to the
government, big government in particular. Today, we're
the
government. So conservatives are going to be unhappy
with
us.
But the fact of the matter, if the conservatives look
back
and say
what is it the things that we value -- getting a handle
on
the growth
of government spending, entitlement reform, welfare
reform,
reduction in taxes -- we have done all these things
that
conservatives
have been wanting to do for years and have been
frustrated in
liberal, Democratic Congresses not doing.
They say, we need to do more. I agree. We need to do
more.
But
it's better to put your shoulder to the wheel than it
is to
simply stand
and complain about the fact we didn't get the whole
thing in
the first
swoop.
SESNO: When can the American people expect the real.
ticking
time bombs to be defused, specifically Social Security
and
Medicare?
ARMEY: I think we're very close to Medicare. We will
have the
Medicare commission, and I think we'll be able to do
some.
Social Security: the American people want serious
public
policy
addresses to Social Security. The American people have
to
got
to say to politicians on both sides of the aisle, stop
the
demagoguery, stop the politics of fear, give up all of
these
cheap
campaign tricks and get serious about the policy.
And in particular, when the Democrat Party hears from
the
American people, we're done with you trifling over our
Social
Security for your political purposes, then we'll have
serious
advances in that whole area.
SESNO: You've got a Medicare commission written into
this
bill.
And it will tackle such questions as raising premiums
for
people who
can pay more, who make a lot of money, or make money,
seniors,
and raising the age of eligibility. That's going to be
a
tough job. You
got anybody in mind, for somebody to head that
commission?
ARMEY: Well, there are all kinds of folks. You know, I
mean,
I
think Bob Dole would be a perfect choice, and I don't
know
if he'd
want to take that on. It's a big job of service. Bob
Dole's
a big
enough man to do it.
But I would have a lot of confidence if he would accept
that
responsibility for the American people.
SESNO: Let's move on to another point. For all of
recent
past, the
Republican Party has thrived on a big idea --
anti-communism,
balanced budget, big-time welfare reform, cutting
taxes.
Essentially, the Republican Party has achieved those
things.
What is
the next big idea for the Republican Party?
ARMEY: Well, I think the first big idea we have that's
already out
there and alive in public discourse is a new tax code,
to
get rid of
tax code as we know it. I think the best ideas is a
flat
tax. Simple,
direct, honest, neutral tax code, understandable by the
average
American citizens on a small form.
That's the first, best, big idea. But we've got other
big
ideas out
there, too. For example, choice in automobile
insurance,
another
initiative of mine.
SESNO: Is that a big idea, Congressman? Is that a big
idea
up there
with anti-communism, up there with cutting taxes?
ARMEY: No, not up there. I mean, you know, but the
point is,
if
you knock off all the Goliath's in the world, then you
got
to start
taking on the rest of the problems.
SESNO: No, but that's the point. Has the Republican
Party --
do
you think you've knocked off all the Goliath's in the
world?
ARMEY: I think we've done a great deal.
SESNO: Don't you need a big idea, though, to
ARMEY: I think the flat tax is a big idea. I think
another
very, very
big idea is school choice. And I think breaking up the
monopoly
control of the American schools, vested in the National
Education
Association by the government, and allowing parents to
select that
school at K through 12 that best meets the needs of
their
children is
a big idea, is very big with the American people.
SESNO: OK, Congressman, take a quick break. We'll be
right
back.
(COMMERCIAL BREAK)
SESNO: And welcome back to LATE EDITION. Our guest,
House majority Leader Dick Armey. Congressman Armey, I
think
as most of our viewers are probably aware, you yourself
have
been
caught up in the politics of the Republican Party in
recent
weeks.
Earlier this week, you characterized the differences
within
the party
as personality conflicts. House Speaker Newt Gingrich
referred to
personality differences. What are the personality
conflicts
or
differences between you and Speaker Gingrich?
ARMEY: I don't think there are any conflicts. There are
differences.
Newt and I have always accepted that we are complements
to
one
another. He's skilled
SESNO: Well, Newt's skills and talents and interests
lie
differently,
more in the range of vision, more in a broader range of
political
activity or public policy activity. I tend to be more
focused on really
the work of the House.
And in consequence of that, we've had a great division
of
responsibilities, where I've pretty well have been
given an
enormous
amount of authority as majority leader to manage the
movement of
legislation through the House.
We feel like it's been a good working relationship, and
we
will
continue working that way.
SESNO: Do you feel you have his full trust and
confidence?
And do
you feel that the members whom you coordinate have your
trust and
confidence?
ARMEY: Yes to both questions. I don't think there's a
problem
there at all. I think the speaker's been very candid in
his
expression
of his trust and confidence in me quite publicly, and
it's a
shame that
he's been brought to a point where he felt the need to
make
those
public statements.
But I also have found myself working with all other
members
on a
variety of legislative items, and I see no difference
in our
working
relationship.
SESNO: I was told by a Republican House member that at
the
leadership meeting a week or so ago, the speaker
thundered in
anger that if anybody tried to vacate the chair, kick
him
out of his
job again, he would make sure they'd pay the price and
he'd
use,
essentially, campaign funds to make sure they didn't
come
back. Is
that appropriate? And is that going to happen?
ARMEY: Well, first of all, I think this was a very
out-of-
character
comment for Newt Gingrich. Newt Gingrich is not a mean-
spirited
person. He's a very generous person.
SESNO: But he threatened -- he threatened those
members.
ARMEY: He was angry. He was upset. He was disappointed.
And
I think he was hurt. We all have these incidents. We
have
them
within our own families. He -- the speaker gave
expression
to that.
Immediately he understood that, one, it was not
appropriate.
Two,
he was sorry he had made that kind of an expression of
his
disappointment and hurt. And three, that he set the
record
straight --
this does not happen; I don't do these things; and I'm
sorry
I even
felt the urge to do so.
SESNO: Would you favor using party funds?
ARMEY: I do not believe in reprisals against people,
and I
think
that we have a pattern, a very good, generous,
consistent
pattern in
the Republican majority of supporting one another on
the
campaign
trail and for election. We always do that. We've done
it
well. We do
it very generously.
You know, we will raise about $1.5 million among
ourselves
as we
contribute to support our colleagues that get in
difficult
races. The
speaker leads in that effort. And when somebody's in
difficulty, he
doesn't say what's their ideology? How do they feel
about
me? He
says, do they have difficulty. Let's go there and let's
help
them.
SESNO: Does this majority leader want to be the next
speaker?
ARMEY: I think the speaker will be the speaker for a
long
time.
You can't be in the House without wanting that. If it's
of
service to
the House, I would accept that responsibility. In the
meantime, I
have a big job right now, and I'm given more
responsibilities than the
majority leaders in the past have had. And it takes all
my
time and
energy to do that job.
SESNO: Fellow Republican William Weld. Nominated to be
ambassador to Mexico. Fellow Republican Jesse Helms
says
you're
not even going to get a hearing in my committee. How do
you
feel
about that?
ARMEY: Well, I don't know. I'm still mystified.
ARMEY: I cannot understand anybody who says I will give
up
being the governor of a state in order to pursue being
the
ambassador to Mexico.
SESNO: Should he have the hearing?
ARMEY: Well, you know, I think that's
SESNO: The Constitution says it's the Senate's
prerogative to
advise and consent.
ARMEY: It's the Senate's business. It's the Senate's
business. I am
still, as I say, I'm somewhat amused at anybody willing
to
make that
kind of a trade. And you know that -- I'm watching with
some
curiosity, but I think they'll work it out over there.
SESNO: Does he qualify to be ambassador, in your view?
ARMEY: I don't -- sure, I'm sure he is. You know, first
of
all, I'm
not sure the qualifications for ambassadorship are all
that
big a thing.
But if you qualify to be the governor of a state, where
I
understand
he's done a good job, I'm sure he can be the
ambassador. I
just
don't -- again, I don't understand why he's willing to
trade
down that
way. It's curious.
SESNO: Congressman, let's come back to Newt Gingrich
again
for
just a moment. He's going up to New Hampshire at the
end of
the
month for fund-raising purposes. But is he running for
president
already?
ARMEY: My guess is Newt's going up there to do exactly
what
we
talked to a minute ago, help the Republican Party in New
Hampshire, help our good people up there, for example,
Charlie
Bass, a very valued member. I'm sure he's up there to
help
Charlie,
and well he should be.
And I'm -- my guess is Newt will be doing as he usually
does, put
the needs of the party and the needs of his colleagues
ahead
of any
consideration he has for himself.
SESNO: Let's end where we began, on the budget and the
budget
deal. When would you tell the American people, and
indeed,
the
world,
that the United States budget for the first time since
1969
will slide
into balance, and can you sit here now and say that
once it
does, it
will stay there?
ARMEY: It will be in balance probably now before the
year
2002
because of the enormous growth in confidence in the
economy
since
we took over the majority. And yes, it will be. We are
now
going
into an era of the politics of surplus budgets. It's
going
to be a whole
new
SESNO: The politics of deficits is over?
ARMEY: I believe
SESNO: That has defined American politics for years.
ARMEY: It -- unless we have a configuration of Democrat
president and Democrat majority in Congress, I do not
expect
to
see deficits again in my lifetime.
SESNO: And we hope that's a very long time.
ARMEY: So do I.
SESNO: Congressman Armey, thank you. Thank you very
much.
Appreciate your time today.
MESERVE: Frank Sesno interviewing House majority leader
Dick
Armey in the Capitol. When we come back, our political
roundtable, Blankley, Roberts and Brownstein. Stay with
us.
(COMMERCIAL BREAK)
MESERVE: And welcome back to LATE EDITION. Time now to
go round the table with Tony Blankley, CNN contributor
and
contributing editor for George magazine; Steve Roberts,
columnist
for the New York Daily News; and Ron Brownstein,
political
correspondent for the Los Angeles Times. Thank you, all
three, for
joining us.
First the budget.
BLANKLEY: Yes.
MESERVE: The Republican Congress and the president would
make us believe that they have saved the nation. Have
they?
RON BROWNSTEIN, LOS ANGELES TIMES
CORRESPONDENT: They've done something good, actually.
You
know, the economy made this a lot easier than it would
have
been
otherwise.
But the fact is that we had, before this deal, four
years of
pretty
much unremitting partisan warfare in Washington over
every
major
issue. And in fact, despite all the flaws in this
agreement,
the two
sides were forced to come together and make a deal that
has
an
awful lot of good things in it for each side, and which
has
the -- I
think the most direct effect of increasing confidence
in that
Washington can make good decisions, can come together.
Approval ratings up for Clinton and Congress. That's
not a
bad
thing.
ROBERTS: Very, very important that the center held
here,
that the
extremes were not allowed to dominate this debate. You
had a
few
liberals like Senator Wellstone voting against, a few
conservatives
like Senator Gramm voting against it. Most people in
the
middle saw
the value of accommodation, finally. Compromise has
returned
to
Washington as a noble idea and not a dirty word. That's
a big
accomplishment.
MESERVE: But is it going to stay?
BLANKLEY: Wait a second. You say the extremes didn't
have
their role. We wouldn't have gotten to this balanced
budget,
even
with the growing economy, if we hadn't had the fight.
We
saved $57
billion in spending in '95 and '96. The -- Clinton, as
late
as the
winter of '95, was predicting a deficit of $200 billion
forever.
We needed that fight. We -- just squeezing the money
out. The
money that was saved by those kind of partisan fights
were
exactly
what paid for the tax cut, and we wouldn't have had the
balanced
budget with a tax cut if we hadn't had the fight in the
squeezing of
the budget.
BROWNSTEIN: And that's very much true. But also the '93
arrangement, the '93 deal that Clinton pushed through
at
great
cost
BLANKLEY: No.
BROWNSTEIN: And the '90 budget that Bush put through.
BLANKLEY: But both of those
BROWNSTEIN: All of these things led toward a position
where
they were able to get over this hump without it being
nearly
as high
as they thought earlier.
BLANKLEY: But both of those tax-increase efforts of
balancing
the budget resulted in, as late as late '95, projecting
$200-billion
deficit. It was -- this is the first time since before
1980
where we
actually got -- we've shrunk down -- one second, good
statistic --
we've shrunk down the size of domestic spending in this
budget
from 21 percent of the economy to 19 percent.
ROBERTS: I thought
BLANKLEY: It's the first time we've had a shift in I
think
two
generations.
MESERVE: But there are still some very high hurdles
ROBERTS: Yes.
MESERVE: to be jumped.
ROBERTS: We -- this is an important deal because it
also
sends a
signal to the financial markets that Congress is
serious,
which they
have not had reason to believe in a long time. I
thought you
were
going to take your chance to admit that you were wrong,
because in
this very seat last week
(LAUGHTER)
MESERVE: Doubtful, very doubtful.
ROBERTS:
you said Clinton was going to veto this
bill.
(LAUGHTER)
ROBERTS: I said he was not going to veto it. But that's
all
right, I
don't want to say I told you so.
BLANKLEY: Wait a second. You're wrong. You did say, I
told
you so.
(LAUGHTER)
I was delighted he didn't. I had been warning for
months
that if
Republicans didn't negotiate very carefully, Clinton
was
going to
take the opportunity to veto. They did negotiate
carefully.
They
didn't give him the opportunity, and he didn't veto.
ROBERTS: But let's mark the most important thing that
was not
accomplished. And that was not taking the long-range
question of
entitlements seriously. The Senate did do a good job by
saying let's
deal with Medicare by means testing premiums. I thought
that
was a
good idea: The Republicans -- Clinton came out for it.
The
Republicans flinched because they are afraid of
Democratic
demagoguery.
BROWNSTEIN: The big question out of this though is
whether
this
kind of deal does in fact provide a building block for
going
on and
doing things like that. And if Congress sees its
approval
rating rise
by making deals, if Clinton sees its approval rise by
making
deals,
they don't have to be a rocket scientist to figure out
that
what they're
doing is closer to what the country wants than what
they
have been
doing over the last few years when they've been sort of
like
this.
And that can provide some momentum towards dealing with
these
long-range problems. It's easier in many ways for
politicians to turn
away from problems when things are good. But they also
have
more
space to do so, if they're willing to take that risk.
MESERVE: I want to talk for a minute about the best
show in
town.
It may not be the "thrilla in Manila," but this Weld
and
Helms
showdown is a lot of fun for Washington.
ROBERTS: It is a lot of fun. It's the best summer movie
in
town.
The heck with Air Force One and Contact.
But what's really important here -- and there is a big
downside risk
to the Republican Party, because while the Weld wing of
the
Republican Party is not huge, it's important in the
northeast. It's
important in the upper middle west.
And when Helms says, Bill Weld, the governor of
Massachusetts, a
duly elected Republican governor, is not my kind of
Republican, that
is a big problem, because remember a lot of Democrats
quite
rightly
said in the '70s and '80s, I didn't leave my party, my
party
left me.
And I think there is a danger that progressive
Republicans
are going
to look at this fight and say: That's not my party.
Jesse
Helms is not
my party.
MESERVE: I do want to show you a piece of videotape. Joe
Kennedy was asked about the Weld situation earlier
today.
This is
what he had to say.
(BEGIN VIDEO CLIP)
U.S. REPRESENTATIVE JOSEPH KENNEDY (D-MA): I can't
believe that somebody would give up what I consider to
be
the best
job in America, to be governor of the state of
Massachusetts, to go
off to Mexico. But in the words of my cousin-in-law
Arnold,
you
know, hasta la vista, baby.
(END VIDEO CLIP)
MESERVE: And no one would rather say hasta la vista
than Joe
Kennedy.
(LAUGHTER)
BROWNSTEIN: That may have been the original motivation
here,
to get Bill Weld out of Massachusetts so the state
house
would
open up for Joe Kennedy. But I think Steve is exactly
right.
If you look at what Bill Clinton has done electorally,
the
most
important thing has been to realign the suburbs of the
northeast, the
Midwest and the West Coast toward the Democratic Party.
A typical voter out there is someone who is fiscally
conservative,
like Bill Weld, socially moderate, like Bill Weld. And
many
Democrats are sitting back and saying this is a no-lose
situation for
us.
Either he goes to Mexico for the president, we have a
symbol
of
bipartisanship, or we have a protracted fight that
really
pushes at the
central fault line of the Republican Party to the most
conservative
activist Southern base and these northern suburbs that
are
drifting
away at the national level.
MESERVE: Tony, dying to say something here?
BLANKLEY: This is the most overcovered ambassadorial
nomination in history.
(LAUGHTER)
MESERVE: And Bill Weld is glad of it.
BLANKLEY: And what these gentlemen have said tells me a
lot
about what this is all about. Washington reporters have
been
looking
for the great division in the Republican Party going
back as
long as
I've been in Washington, which is 17 years now. This is
not
a major
fissure. But either we're lockstep, either we're Reagan
robots or
Newtoids or we're about to have civil war. In fact, the
Republican
Party is vastly united with a small -- I wouldn't call
it a
wing; I'd call
it a few feathers'
(LAUGHTER)
that disagree on a few issues. And I don't think
the
public cares
about this. I think this is a Washington story that
loves
the idea of
spotting a phony schism.
BROWNSTEIN: Tony, Weld is in that consensus. That's the
problem. Weld is really right in there with that small
government
consensus which is what holds this party together in
the
'90s. And to
effectively sort of say, we're going to read you out of
the
parties on
these other issues has got to be damaging because
you're
saying that
is not enough.
MESERVE: Steve, let me ask you -- is Weld being stupid,
or
is he
being foxy with all of this?
ROBERTS: Foxy? I wouldn't say he's being either one. I
think
he's
being a little dense in some ways, because if he really
wants the job,
he's handling it in a very bad way.
BROWNSTEIN: Well, clearly, he really doesn't want the
job.
ROBERTS: Some people say his big problem is, if he
actually
gets
the job, then he has to go to Mexico, you know, and not
actually
deal here.
I think, if he wanted to job, he handled it in a very
bad
way. He
might disagree with Jesse Helms. But the customs of the
Senate say
you've got to pay attention to the committee chairman.
And
the rules
of the Senate gives these people great
MESERVE: But is that his own game?
ROBERTS: It certainly would not appear to be, because
if it
is -- if
he really wants the job, he's not going about it the
right
way.
MESERVE: And when we come back, one more trip around the
table. Stay with us.
(COMMERCIAL BREAK)
MESERVE: Welcome back. The first installment of campaign
finance hearings is over. Tony, what did they
accomplish?
BLANKLEY: Well, I think we in this last week saw one
significant
event, and that was that the White House was so holding
back
information that they finally drove the Democrats to
vote
with the
Republicans to issue subpoenas.
So I think that maybe the chemistry is changing a
little
bit. You may
finally have both sides of the aisle trying to get to
the
facts.
MESERVE: Have we learned anything?
ROBERTS: Well, we've learned that the Democrats were
pretty
desperate for money. I think we knew that already. But
we
also
know that they cut a lot of -- we've learned they cut a
lot
of corners.
The Democrats cut a lot of corners. Republicans cut a
few
corners
-- not as many as the Democrats.
But the big issue has not been proven -- and Senator
Fred
Thompson has admitted that. He said I still believe the
Chinese had
a plot. But they still haven't proved that there was
China
money in
the American system.
BROWNSTEIN: The China, issue is important. But in a way,
he's
diverting attention from what is the strongest issue we
have
here. I
mean, it's clear that we have irresponsibility to the
point
of
recklessness on the part of Democrats in much of their
fund
raising
in 1996.
And Fred Thompson is reaching for an espionage scandal
that
may
or may not be there. I think when they come back in
September,
they're going to be focusing a lot more directly on the
campaign
finance activities of the White House, the fund raising
calls, the
Lincoln bedroom, issues like that. And the question
will be
whether
that generates some momentum for campaign finance
reform
which
Fred Thompson wants, but very few other members of the
Republican Party, not even all the Democrats in the
Senate,
want.
MESERVE: Likely?
ROBERTS: I think there's still the odds that there's
not
going to be
campaign finance reform. They might get a small bill on
the
soft
money. But Ron's right. The Republicans can shoot
themselves
in
the foot politically. If the hearings are successful,
people
might want
to change the system. Republicans don't want it because
they
run
the
BROWNSTEIN: None of the Democrats want it either.
MESERVE: And we have to leave it there. I'm sorry.
Tony, Ron,
Steve, thank you all for joining us. And when we come
back,
we
return to the Mid East and questions about the future.
(BEGIN VIDEO CLIP)
(UNKNOWN): This moment it will be the end -- must be
the end
of this bloody peace protest.
(END VIDEO CLIP)
MESERVE: Will it be the end? Bruce Morton has the last
word
next.
(COMMERCIAL BREAK)
MESERVE: And welcome back to LATE EDITION. Bruce
Morton joins us with his last word.
Bruce.
MORTON: A couple of words this week, Jeanne. Strengths
and
shame.
(BEGIN VIDEOTAPE)
MORTON (voice-over): The late Eric Sevareid wrote once
of the
special strengths of the shameless. He meant people
like the
suicide
bombers in Jerusalem this past week. If you aren't
ashamed of
killing. the innocent, you have a strength more
honorable
people
lack.
Why do they do it? Franz Fanon (ph), who wrote a lot
about
terrorism, said once the purpose of terror is to
terrify.
And at one
level, that's true. But the Jerusalem bombers wanted to
do
more
than terrify. They wanted to stop the negotiations
between
Israel
and the Palestinians, and they succeeded.
They can probably always succeed. Acts of terror will
start
Israelis
wondering if the Palestinians really want peace,
wondering
whether
Yasser Arafat really wants to end the terror, wondering
if
he does
want to but can't, does he really speak for the
Palestinian
people or
does Hamas, which sends the killers into the streets.
Almost any Israeli prime minister confronting all those
doubts will
decide to stop negotiating. A prime minister who didn't
might well
be forced from office by angry Israelis who think he's
caving in to
terrorists.
So the outlook is bleak. Arafat probably can't stop
suicide
bombers. They take their orders from Hamas, not from
him. And
this kind of terror is so simple logistically as to be
almost
unstoppable. Spotting a squad of Palestinian commandos
is
something the Israeli Army is good at. Spotting one man
with
a
concealed bomb is much harder.
And the United States? It can urge negotiations, but it
can't really
make them happen. Only Israel and the Palestinians can
do
that.
And if a sizable block of Palestinians is against
negotiating and
shameless about the tactics they use, they will have a
lot
of that
special strength Sevareid wrote of a generation ago.
(END VIDEOTAPE)
MESERVE: Much talk, and rightfully so, about the peace
process
and its future this week. Is the grim conclusion that
peace
process or
no peace process, there will be terrorism?
MORTON: Well, I think as long as the terrorists want to
disrupt the
peace process, which clearly is their aim, there will
be
terror. And
as I said, I think the odds that they're succeeding are
very
good
because it's so hard to stop this kind of thing.
One man in baggy clothes with a bomb strapped to his
body. I
wonder if you can control that.
MESERVE: Certainly, the solution has not been found in
the
Middle
East.
MORTON: Not so far.
MESERVE: Bruce Morton, thank you so much for joining
us. And
we'll be right back.
(COMMERCIAL BREAK)
MESERVE: And that's it for this LATE EDITION. Tune in
tonight
for more insight into this week in politics on CAPITOL
GANG
SUNDAY at 7:00 p.m. Then in the crossfire, new
subpoenas in
the
case of Bill Clinton versus Paula Jones. That's
CROSSFIRE
Sunday at 7:30 p.m. Eastern.
For now, thanks very much for watching. I'm Jeanne
Meserve in
Washington. Enjoy the rest of your weekend.
RECORD TYPE: PRESIDENTIAL (NOTES MAIL)
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CREATION DATE/TIME: 4-AUG-1997 08:38:39.00
SUBJECT: FOX News Sunday, 8/3/97
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TEXT:
Message Creation Date was at 4-AUG-1997 08:24:00
FOX NEWS SUNDAY
AIRED ON SUNDAY, AUGUST 3, 1997
WITH HOST: TONY SNOW
INTERVIEW WITH:
HOUSE SPEAKER NEWT GINGRICH (R-GA)
MR. SNOW: Three-and-a-half years ago, Newt Gingrich became House
Speaker. At
the time, he was the hottest property in politics and Bill Clinton was in
hot
water. Well, now the president is enjoying stratospheric approval ratings,
and
the Speaker's numbers are plunging earthward. So, why is Gingrich smiling?
Well, let's find out. One year after his first appearance on Fox New
Sunday,
we're joined from Atlanta with Speaker of the House Newt Gingrich.
Mr. Speaker, before we begin we want to thank you for joining us, but
also
wish happy birthday to your wife Marianne.
REP. GINGRICH: Well, let me just say, I'm delighted, and appreciate her
approval of my spending part of her birthday with you instead of her. I'm
smiling because we cut taxes, reformed welfare, balanced the budget, and
saved
Medicare, and that pretty much, in terms of what the Contract with America
started in 1994, that's a historic achievement to be able to come back and
continue to work towards goals the American people want. And I think the
bills
we passed this last week are truly historic.
MR. SNOW: Mr. Gingrich, I want to talk in more detail about those. But,
first, I want to play off this morning's headlines. The Hamas, the Islamic
separatist group, has said that it is -- it plans more violence against
Israel
unless Israel releases political prisoners later today. What's your
reaction to
that?
REP. GINGRICH: I think the Israelis have every right to protect
themselves.
I think they have every right to go after Hamas wherever they can reach
it. I
think the Palestinian Authority has been tragically lacking in its
willingness
to live up to its part of the agreement. Congressman Jim Saxton of New
Jersey
has an amendment which would cut off all money going to the Palestinian
Authority unless they begin to actively pursue terrorists. And I think the
United States should come down firmly on the side of protecting innocent
citizens and opposing terrorism, and flatly let it be known in the Middle
East
that we will be supportive of steps needed to protect innocent Israelis.
MR. SNOW: Mr. Gingrich, as you know, the House is out for the next
month, so
nobody can act on that particular piece of legislation. If the situation
us
unchanged four weeks from today, is that the first item on your agenda
when you
return?
REP. GINGRICH: It will certainly be in the first week or so when we get
back. That amendment has, I think, broad and growing support. I think the
clear
evidence that Yasir Arafat and the Palestinian Authority have not only not
stopped terrorism, but they've actually had people in their organization
helping terrorists, the fact that Israelis have been dying, and I think
the
very fact that the Hamas is as bold as it is in its new statements,
indicates
that the United States needs to be prepared with a new and tougher, and
more
anti-terrorist strategy for the Middle East.
MR. SNOW: You had breakfast the other day with the president. Is there
any
indication, at least from what you could glean, that the president is
ready to
take the same sort of stand that you've just outlined?
REP. GINGRICH: Well, let me say, I'm not going to comment on anything
about
the private breakfast we had and the things we discussed. But I will say,
in
general, I think the administration is very concerned about what's
happening,
and I think there is a growing sense in the administration that the
Palestinian
Authority is not doing its job. And certainly Hamas' announcements today,
I
think, will be condemned by President Clinton.
MR. SNOW: Israeli Prime Minister Benjamin Netanyahu has been under fire
in
his own country. And, as you know, President Clinton did not support him
when
he was running for Prime Minister nearly a year-and-a-half ago. Do you
think
the United States might be gaining strange new respect for the Israeli
Prime
Minister?
REP. GINGRICH: Well, first of all, I don't think Americans have the
right to
pick prime ministers for Israel or any other country, so -- but Netanyahu
won
an election fair and square in a free and open society. The only truly
open
society in the Middle East. And he deserves the respect of all Americans
as the
chosen leader of Israel.
In addition, I think once we now realize how deeply embedded terrorism
is,
and how overtly the Palestinian Authority is prepared to support
terrorism,
including killing Palestinians simply for selling land to Israelis. I think
it's becoming increasingly clear that the PLO -- Palestinian Authority has
not
given up tacit support of terrorism, and maybe there's a growing sense of
awareness of the challenges that Netanyahu faces in preserving the
security of
Israel. And, frankly, saving the lives of innocent Israelis.
MR. SNOW: Is it, therefore, time to shut off peace talks until the
Palestinian Authority changes its ways and maybe kicks out some people?
REP. GINGRICH: I don't -- I think the issue is not so much cutting off
peace
talks as it is imposing steps that are necessary to protect innocent
people.
And if that includes raids into Palestinian territory, if that includes,
frankly, arresting some of the Palestinian Authority leaders who,
themselves,
have engaged in terrorist acts, whatever steps have to be taken ought to
be
taken, and the Palestinian Authority should know that it's only going to
survive within a framework of security. It is not going to survive
supporting
and tacitly helping terrorists undermine the security of innocent Israelis.
MR. SNOW: So you would support official Israeli action, including
military
strikes, in West Bank areas controlled by the Palestinian Authority, if
that
were necessary to knock out what you call terrorists?
REP. GINGRICH: A key provision in the United Nations charter is the r
ight of
any state to protect itself. It is clear that terrorism is being sustained
in
the Palestinian territories. Israel clearly has the right to protect its
own
citizens. It is innocent Israelis who are being killed. And I think any
American would understand a government that took active steps to protect
the
lives of women and children in marketplaces.
MR. SNOW: Has Yasir Arafat lost all credibility as a leader as far as
you're
concerned?
REP. GINGRICH: He has in the Congress. I think there are very few
people who
believe anything he says. And I think that he has squandered what was a
great
opportunity to build genuine peace in the region, and now the question is,
where do we go from here?
MR. SNOW: All right. Mr. Speaker, another foreign policy issue, Bosnia.
The
president has set a June deadline for removing American troops, but
recently
seems, well, to say that that might be more difficult than he thought, and
maybe our troops would spend more time there. Should our troops be removed
on
time next June, come what may?
REP. GINGRICH: I think we ought to look very carefully and cautiously
at the
region. I think that it's clear that right now, in a way, we're becoming a
hindrance to a solution because the Serbs and the Croats and the Bosnian
Muslims are all sort of waiting for us to do something instead of doing
their
own job. It is tragic how the hatred and the bitterness and the bloodshed
has
blocked even, for example, connecting the telephones, and has weakened the
economy of the region.
I think that, on the one hand, if we don't indicate a willingness to
back
out and to make them solve their own problems, they could be sitting there
20
years from now. On the other hand, we have to move very cautiously because
I
don't think it would take much for the war to start again, and for us to
be
right back in the bloodshed of just a couple years ago. So, I think we
ought to
be very cautious and careful, and not make any automatic assumptions.
MR. SNOW: So, you're saying there should be no guaranteed, automatic
June
removal day?
REP. GINGRICH: I'm also saying there may be a way where we can have
forces
in Hungary and forces off the shore on the Adriatic, and support a NATO
contingent that stays there. There are a lot of ways to look at solving
it. I'm
just not sure that we should be precipitously create a power vacuum in a
region
that would start a war again.
MR. SNOW: Do you think we have a big enough defense budget?
REP. GINGRICH: No. I think that there are very real challenges.
However, I
would also say, we ought to reform the Pentagon. There's too much
paperwork,
too much middle management. It takes much to long to build new weapons
systems.
We ought to be applying the lessons of major corporations of Microsoft, of
Wal-Mart, of General Electric, of Ford Motor Company, places that have
modernized to the information age. And we ought to develop a much leaner
and
much more efficient Pentagon. Within that framework, maybe there's enough
money, but currently there clearly is not enough money both to sustain
what
we're doing, to train our troops, and to buy the new weapons we need for
the
21st century.
MR. SNOW: There is S story today in the Dallas Morning News that the
military is going to take another look at the Don't Ask/Don't Tell policy
towards gays and lesbians, in part, because the military has kicked out
more
gays in the last year than ever before. Your response?
REP. GINGRICH: Well, I think that we have to look at the entire issue
of
sexuality in the military. The military has become sort of a laboratory
and
public, on national television every night, and we have to somehow, I
think,
take a deep breath and take a step back, and whether that requires a
commission, or what it requires, to look at the whole issue of sexual
relationships.
You know, you don't hire a military as a social laboratory. You hire a
military in order to save your country, in order to fight in a war, in
order,
if necessary, to believe to die for your country. And I think that the
demoralization of the military right now is significant based on a whole
series
of activities and incidents over the last six or eight years that have
consistently kept the military psychologically on the defensive, and been
very,
very, I think, demoralizing to the active duty personnel that are trying
to
figure out, how do you recruit and train a force that's prepared to fight i
n
combat in a country which is rapidly changing its own norms.
MR. SNOW: Mr. Speaker, it has been argued that it was much easier to
integrate the military racially than sexually. Do you think it's a mistake
to
get women too near the combat zone?
REP. GINGRICH: I think that it is inevitable in a modern combat
environment,
which does not have a front line. That if you're going to have a
significant
number of women in the service, they're going to be in combat. An
ammunition
truck driver with a mobile force is in combat. A helicopter pilot for a
medical
evacuation helicopter is in a very dangerous zone. A woman aboard a ship
at a
time of real combat is in combat.
We just have to confront the reality that if women are going to be
allowed
to serve their country and certainly with modern weapons evolving,
there's
no reason that women can't play a major role in defense -- they're going
to be
at risk, and that's a reality. That's not what's causing the problem.
What's
causing the problem is the same thing you're seeing in corporations, the
same
thing you're seeing across the board.
You know, we had a proposal last week, for example, to allow private
sexual
harassment suits for welfare trainees who are leaving welfare. I mean,
there's
a pervasive sense now of trying to litigate and restructure human
relationships
in ways that I think we haven't finished sorting out as a society, so it
shouldn't surprise us that we haven't finished sorting them out for the
military.
MR. SNOW: Let's now turn to what you discussed at the outset of this
show,
the budget agreement you reached last year - - last week with the
president.
REP. GINGRICH: I know it seems like a long time.
MR. SNOW: You've described it as a great triumph. Nevertheless, that
feeling
is not shared by some of your Republican colleagues. Let me read you a
quote
from Jack Kemp. He says: "This tax bill is making the tax code a
nightmare of
tax credits and Washington directed social engineering." Are you happy
with
the tax bill?
REP. GINGRICH: No. I'm -- but I'm more happy with this tax bill than
with
current law. First of all, Jack Kemp headed the commission that Bob Dole
and I
appointed him to where he reported back that taxes are too complicated,
and
that small businesses spend more to keep track of taxes than they do to
actually pay the taxes. So, Jack and I are in agreement on simplification.
Second, I wish Jack Kemp were the vice president. If Jack Kemp were vice
president and Bob Dole were president, we would have a dramatically deeper
tax
cut. We'd have indexing of capital gains. We'd have all the things Jack
believes in. But Jack didn't win.
So part of what we're faced with is, three-and-a-half years of working
with
the president who did win, and trying to find a way to get bills signed
that
move us in the right direction. And I sympathize with Jack's frustrations,
but
the fact is, this bill does cut capital gains tax. It does have a $500 per
child tax credit. It does have educational tax breaks so children can go
to
college and vocational/technical school. It does have an improvement in
the
death tax benefits so that family farms and family businesses will be able
to
keep more of their money and not be sold just to pay the taxes. And
I think those are all things that Jack Kemp, I hope, believes are useful
things.
MR. SNOW: Mr. Speaker, you sound as if you're lecturing conservatives
who
complain that this budget spends too much and taxes too much. Are you
telling
them -- I think you are, I want to summarize, I've done everything I can
do as
House Speaker with a Democratic president. So back off?
REP. GINGRICH: No. I'm telling them, this was a fairly good bill which,
overall, moves in our direction, which saves Medicare, actually cuts
spending,
it does not increase spending, there's a $600 billion reduction in
entitlement
spending in this bill. It also cuts taxes in
a direction conservatives have always said mattered, including the tax cut
that
Jack Kemp always said was the most important, the capital gains tax cut.
But it also has $500 per child as a tax credit, educational tax credits
for
college and vocational/technical school, an improvement in the death tax
benefit, which every conservative says they agree with, and other tax
breaks
that are good for job creation and productivity. But let me go a step
further.
Bill Archer is chairman of the Ways and Means Committee. We're going to
move
another tax cut in '98.
My point to conservatives would be, take this half loaf, you know, put
some
jelly and jam on it, enjoy it. Now, let's bake another half loaf in '98,
then
let's win the '98 election, pick up 20 or 30 seats in the House, four or
five
in the Senate, let's come back in '99, have another tax cut, come back in
2000,
have another tax cut, these four tax cuts, all signed by Bill Clinton,
will
move us towards a country with smaller government, lower taxes, more
growth.
It seems to me that's what conservatives stand for. And while we may
not get
everything every day, as long as we're moving in the right direction,
let's
keep pushing forward. Let's not sit around and gripe and complain because
we
only got half a loaf when we really wanted to have the whole loaf.
MR. SNOW: Mr. Speaker. We'll get back with more tips from Chef Gingrich
in
just a moment. Stay with us.
(Announcements.)
MR. SNOW: We're back with House Speaker Newt Gingrich. And I'm joined
by our
panel, Juan Williams of the Washington Post and Fox News, Mara Liasson of
National Public Radio and Fox News, and Andrew Ferguson of just the Weekly
Standard. Brit Hume is off today.
Mr. Speaker, I want to continue the line of questioning we started, and
then
we'll open it up to everybody. You've talked about what a triumph this
particular budget is for Republican principles. Let me read you a quote
from
Representative Mark Souder of Indiana. He says, where do we go from here?
We
took the taxes-balanced budget thing off the backs of the liberal
Democrats, we
delivered on some of our promises. People are going to be asking us, why
should
I. vote for you rather than a Democrat?
You've just talked about picking up a lot of seats in the House and
Senate
next year. What is going to persuade voters that it makes any sense to
elect a
Republican in 1998?
REP. GINGRICH: Well, let me start by saying, I often criticize the
Atlanta
Constitution and Journal that they spent today an entire section, this is
an
eight page section, just explaining how many things there are in the tax
cuts,
and how they affect real families and do things for real people. I think
that's
important to remember.
Now, you have proof that a Republican Congress does make a difference.
Every
family with children is going to have real proof in January. Everyone who
saves
and invests is going to have real proof beginning May 7th of this year.
Everyone who has a small family farm or a family business is going to have
real
proof when they do their estate planning.
MR. SNOW: Mr. Speaker, I understand that, but --
REP. GINGRICH: Okay. But, the point I'm making, this is a launching
point,
that I think Mark Souder, frankly, who's a very bright member, needs to
just
integrate into his thinking. Now it's not just rhetoric, now in the real
world
people are better off. In 1998, as I just said, we're going to offer
another
tax'cut. It's going to be a substantial tax cut. And we're going to pit
tax and
spend foolishly, not just tax and spend, but tax and spend foolishly
against
cutting taxes.
Let me give you the examples just from this summer, the Earned Income
Credit
under the Clinton administration has $5.3 billion a year of waste, fraud
and
error. That's their own number from the Internal Revenue Service. The
Medicare,
according to their ow report, under the Clinton administration has $23
billion
a year of waste, fraud and error. There was a report out last week that
home
health under the Clinton administration has a 40 percent error rate, 40
percent
error rate, which you're paying for unnecessarily.
The Internal Revenue Service, if you send in a paper form, 22 percent
of all
paper tax forms have an error, 11 percent by the citizens, 11 percent by
the
Internal Revenue agents under the Clinton administration. That means
you're
paying an IRS agent a full time salary to mishandle every 10th tax return
that
they're dealing with. Now, my point is this --
MR. SNOW: Mr. Gingrich --
REP. GINGRICH: I'm not trying to filibuster, I'm trying to create a
framework here. The Republican Party next year is going to run as the
party
that wants to cut out waste, error and fraud, in order to reduce your
taxes.
We're going to have a substantial tax cut in 1998, in addition to having
welfare reform implementation, in addition to having other steps to
decentralize government back home, and we think that people are going to
prefer
lower taxes, a smaller government, less waste, fraud and error, compared
to the
Clinton administration's big bureaucracy approach.
MR. SNOW: Well, of course, what you'll get -- let me back up. You
talked
about all the triumphs in this bill. I hazard to guess that the same
newspaper
will carry poll results, like many others, that indicate that people think
the
president deserves more of the credit, and people are approving of his
handling
of the economy more than Republicans.
REP. GINGRICH: Actually, CNN on Friday came out with just the opposite
numbers. So I'll let you choose your pollster. But, your competitor's poll
on
Friday said, people gave us the advantage in terms of who did -- got the
best
job done. People gave Congress the highest rating, according to their
poll,
since 1974. So we'll wait and see.
My point is, as people see in their pocket that they have more real
spending
power, the Republican Congress will have more meaning in their lives. And
if we
then continue this September with welfare reform implementation, with
cutting
out waste, fraud and error, with shrinking the federal government's
unnecessary
bureaucracies, with reforming the Pentagon, as I mentioned earlier, and we
then
have another tax cut in '98. I think it begins to be very clear that having
a Republican Congress does make a difference.
MR. SNOW: Mr. Speaker, I'm going to ask you one last question and then
turn
it over to my colleagues. You just mentioned welfare. I spoke with Senate
Majority Leader Trent Lott earlier this week. He said that he accepted a
conservative critique. He said, this bill keeps in place regulations,
Labor
Department regulations, that make it virtually impossible for people like
Tommy
Thompson in Wisconsin, and other highly touted Republican and Democratic
governors, to maintain their present welfare reforms, because the Labor
Department has ruled that you have to pay them basically standard union
wages
and benefits,
REP. GINGRICH: It would be more accurate to say that this bill says
nothing
about that. And we will be moving a bill in September, which will be the
Welfare Reform Implementation Act. I'm calling on every governor, all 50
of
them, to come out publicly and indicate the changes they need. We'll have
a
task force led by Clay Shaw and Jim Talent, and Bill Goodling that will be
developing the bill. And we hope we'll have every governor in the country
strongly supporting the bill.
I don't believe the president can veto that bill when it's clear that
it's
the key to implementing welfare reform, because I don't think the American
people want the labor unions and the liberal bureaucrats to destroy
welfare
reform.
MR. WILLIAMS: Mr. Speaker, you were talking earlier about poll numbers.
And
part of those poll numbers indicate that most Americans view the budget
deal as
unfair. That is to say, that if you look at all the provisions in that
budget
bill, where the breaks come, they disproportionately go to people who are
wealthy, the top 1 percent of the country, especially in terms of those
inheritance tax breaks.
REP. GINGRICH: Juan, that's just not true,
MR. WILLIAMS: Well, I think it is true.
REP. GINGRICH: The fact is, the vast majority of this bill, the ove
rwhelming
majority of this bill, is the $500 per child tax credit, which is a
middle-class tax credit. The second biggest part of this bill, some $40
billion, is educational tax breaks, which go overwhelmingly to the middle
class
for college and vocational technical school. And those are the two biggest
areas of the tax bill. So those two parts of the tax bill are about three-
fourths of the entire tax bill, and they go overwhelmingly to people
earning
$75,000
a year or less.
The fact is the liberal Democrats, many of whom voted against the bill,
were
effective in their propaganda and some people in the news media picked up
on
it. But, it's not factually true. The factual truth is that this bill,
with its
$500 per child tax credit, and its educational tax credit, is very, very
favorable to the middle-class.
MR. WILLIAMS: But, Mr. Gingrich, I think it's factually true that
Republicans are going to be waving the flag and saying, to their
Republican
constituents, look, we got you a tremendous break when it comes to what?
Capital gains, capital gains, are available only to the very richest of
Americans. And I think the second thing to say here --
REP. GINGRICH: That's not -- again, that's not true.
MR. WILLIAMS: The second thing to say here is that when you look at
this
deal that the Republicans are celebrating and Republicans are known for
their
fiscal responsibility, it's a surprise to me that there would have been a
balanced budget if you had done nothing. But, now there's going to be a
five-year delay, given that you've handed away all these tax breaks.
REP. GINGRICH: Well, now you made two different points. I'm going to
try to
handle both of them quickly. First of all, the president himself said
flatly,
that if you look at the real numbers, you would not have had a balanced
budget
without the $600 billion in entitlement reforms, because beginning next
year
the deficit would start increasing if you didn't do something to
entitlements.
So I think we needed this bill to get to a balanced budget.
Second, on capital gains, the most popular middle-class cut in capital
gains
is simple, if you sell your house and you have up to a $250,000 for an
individual, or $500,000 for a couple, you don't pay any capital gains tax
on
it. That is a huge middle-class tax break.
But there's another part that liberals seem to miss. Almost half the
country
now has some stock, is involved in some investment. Thirty-two percent of
seniors said the most important tax cut they wanted was the cut in the tax
on
savings and investing capital gains, because that's what they've done all
their
lives. And now they're at a point in their life where when they sell their
stock, or they sell whatever assets they have, they don't like paying the
government all that extra taxes.
So I think you'll be surprised to find that there are a lot of people
who
are glad they're not going to pay a tax when they sell their house, and
that's
going to be a very popular tax cut that affects the middle-class.
MR. WILLIAMS: Well, I think everybody is happy when they don't pay
taxes.
I'm happy if you give me candy. But, at the same time don't you think that
at a
time when the stock market is hitting 8000, going crazy, that we as a
society,
as an affluent society, should have some sense of fairness about people
who are
hard-working people, you know, people who might not even have job, about
making
sure that some of that money goes to them?
REP. GINGRICH: Well, first of all, you have the lowest unemployment
rate
you've had in a quarter-century, and the lowest, for example, black
teenage
unemployment rate that you've had since 1969. So part of our goal in
welfare
reform is to get more people trained to go out and get a job, because we
think
they should have a job.
Second, this tax cut includes $500 per child for anybody who has a tax
liability. So we think that whether you're the working poor or the
middle-class, that $500 tax credit per child is going to be a big asset to
you,
and is going to help you in terms of being able to take care of your own
child,
rather than have a bureaucrat do it for you. We think that's a very
important
social policy, and that's the largest single tax cut in this bill.
MS. LIASSON: Mr. Speaker, you say that this budget deal saved Medicare.
In
fact, most of the experts say it merely put off reckoning with Medicare.
Trent
Lott said that he's ashamed of the House of Representatives, he's ashamed
of
the president for not stepping up to the plate on reforms like means
testing,
or raising the eligibility age or whatever. Now, is the House going to
show
some courage next year and do something about long-term Medicare reform,
or is
it just going to have this commission put off the problem until after the
next
election?
REP. GINGRICH: Let me just suggest to you, as a matter of courage, it
was
the United States House Republicans in 1995 who created the Medicare reform
bill with medical savings accounts and provider sponsored networks, which
gave
more choice to senior citizens so they had the right to choose, like their
children and grandchildren. And we did that bill at a time when the unions
were
about to launch thousands of ads. We did it at a time when people said it
was
much too radical. And in terms of courage, we stuck with that bill. And
this
week it got passed by overwhelming majorities in both the House and
Senate. So
I think we've proven the courage issue.
But, there's something deeper here. If your mom or dad goes in the
hospital
and the doctor comes out and says, well, we've saved them for another 10
years,
you don't say, gee, you didn't do much. You say, that's really pretty
tremendous. Medicare was on the verge of going broke. We saved it for 10
years
and we established a commission, appointed by Senator Lott and the
president
and myself, which will look at how to save Medicare for the baby boomers
and
their children.
I think there's a little industry in Washington right now that says,
well,
okay, so you saved it for a decade, that doesn't count. Okay. So you
balanced
the budget, that doesn't count. Okay. So you cut taxes, that doesn't
count. I
know there's a sort of passion and need for cynicism in some parts of the
city,
but the fact is, saving Medicare for a decade was hard work and a big deal
and
it changed the whole dynamic of that issue.
Getting the AARP, the American Association for Retired Persons, to
support
it was a very important step in the right direction towards reform. We
took
every major step we could this year. We'll be back again in 1999, when the
commission reports and we'll take more steps. My hope, is we'll pass a
Medicare
reform bill in 1999. And I think that's a very important direction for us
to go
in.
MR. SNOW: Andy.
MR. FERGUSON: Mr. Speaker, I think as Tony mentioned earlier, you're
now, by
acclamation, the most unpopular politician in America. The new Wall Street
Journal poll has your approval rating below 20 percent, which I think is
significantly lower than President Nixon's was right before he resigned.
REP. GINGRICH: That's actually -- Andy, that's actually not accurate.
If you
look at their total poll, my job approval rating is up in the mid-30s.
MR. FERGUSON: Okay. Well, mid-30s isn't going to set the house on fire.
But,
I guess the question comes is, you've always said the Republican movement
to
reform government and so on was more important than any one man. Does
there
come a time when you might be -- serve the movement better by stepping
aside,
letting someone, going into this next election, lead the Republicans, who
is
more popular?
REP. GINGRICH: Let me just ask you, Andy, since the same Wall Street
Journal
poll showed that people favored a Republican Congress by 6 percentage
points
over the Democrats and showed that Congress had its highest approval
rating
since 1974, at what point will you and your magazine decide that maybe
we're
doing something right?
I mean, doesn't it strike you as ironic? We have a six-point lead
Friday, in
terms of which party would you favor. We have the highest approval rating
since
1974. We passed a tax cut bill, we saved Medicare, we balanced the budget.
And,
in fact, the poll itself showed that my approval rating was better than it
had
been in October or November of 1995. They didn't print that part of the
poll.
They printed a totally different question that had nothing to do with
whether
or not people thought I was doing my job.
MR. SNOW: Okay. Mr. Speaker --
REP. GINGRICH: Doesn't that just -- don't you just find that sort of
fascinating. And let me go one step further. The real fight in Washington
is
Dick Gephardt, who voted against his president, who split his party, who
had a
tiny minority, 52 on the spending bill and 42 on the tax bill. The
Republican
party was totally unified, 226 voted for the tax cuts, 1 voted no. Don't
you
find it difficult to sustain this story about how much trouble we're in,
when
on vote-after-vote we're winning, and on vote-after-vote we're unified.
And
doesn't that give you some pause to your basic premise?
MR. SNOW: Mr. Speaker, hold that fire. We'll be back in just a minute
with
round three with House Speaker Newt Gingrich.
(Announcements.)
MR. SNOW: We're back with House Speaker Newt Gingrich, and our panel,
Juan
Williams, Mara Liasson, and Andy Ferguson. Andy, you pick up the
questioning.
MR. FERGUSON: Yes. Mr. Speaker, if I could just follow up on this last
question. If I could put it in sort of raw political terms, you've got a
number
of Republicans, some of them even publicly saying that you're a drag on
them in
their districts because of your unpopularity. Now, if you were a Democrat
and
you were running next year, wouldn't you run, prefer to run, against a
Congress, a Republican Congress, being led by Newt Gingrich rather than
one
being led by a much less unpopular leader?
REP. GINGRICH: Andy, let me just suggest to you that you read Michael
Barone's Almanac of American Politics that came out about a month ago.
Barone
is probably the best student of politics in this country today. He makes
the
point that in 1996, they tried what you just said. They had 120,000
negative
ads in the country attacking me. They made it a referendum on me. And, as
Dick
Armey pointed out a few days later, there was a referendum on Newt
Gingrich,
the press all piled on, they all said it was a referendum. We won. We kept
control for the first time in 68 years.
Now, at some point, I think you all are just going to just relax and
conclude that if you have a team that won for the first time in 40 years,
that's 1994. They won for the first time in 68 years in keeping control,
that's
1996. They kept their word on the Contract with America and passed a
balanced
budget with lower taxes and saved Medicare. That's this last week. Maybe
that
team is doing pretty well. And, in fact, if that team votes pretty
consistently
on the floor, maybe despite all the soap operas and situation comedies
that you
guys help create, the fact is, on balance, this party is doing very well.
It's the Democrats who have Dick Gephardt in rebellion. It was the
Democrats
who were split on the vote last week. And I just find it fascinating that
somehow, you know, Gephardt manages to vote against his own president, to
vote
against his own party, but he made a speech in lowa, I think, on Saturday
saying they were really unified, while he voted no. We actually are
unified,
and your focus is on whether or not people are grumbling behind the unity.
MR. WILLIAMS: Well, let me just jump in for a second and ask you about
the
District of Columbia. This week, there was a major bill passed, and I
think I
want to congratulate you on it as a resident of the District of Columbia.
It
puts a lot of money into the District, retires pension problems that were
here.
But, at the same time, it has exposed Delegate Eleanor Holmes Norton to a
lot
of criticism, and a lot of people who say, well, Home Rule has been
squandered,
and it created a sense among some people that a black population is now
being
dominated by a white, predominantly white, Capitol Hill led by you, and
you
really don't care, you just want to take away democratic rights from the
District of Columbia.
REP. GINGRICH: Well, first of all, as Delegate Norton has said, Home
Rule
includes the word ``rule". I think if the Washington City government had
cleaned itself up, we have them two-and-a-half years to get the job done,
and
instead of going off on foreign trips and failing to get the job done, if
they
had focused on getting the job done, I think you wouldn't have this bill.
But
the fact is, the citizens of Washington deserve better government. The
children
of Washington deserve better schools. And the people of America deserve a
national capital they can be proud of.
MR. WILLIAMS: So you want Mayor Barry to step down, is this all
directed at
the Mayor?
REP. GINGRICH: No. No, it's not. The City Council, frankly, has not
been as
helpful as it should be either. The fact is, we are temporarily turning a
great
deal of power over to appointed officials in order to clean up the mess
which
the city government allowed to evolve. Now, I think, that the country
deserves
to have a capital it can be proud of. It was a very reluctant step on our
part.
We don't like doing it.
As you know, I have defended and protected the city's home rule for the
last
two-and-a-half years, but if we were going to get the scale of reform we
needed, including enterprise zones and zero capital gains tax for
investment,
and other steps designed to really make sure the city could grow and
attract
people back into the city, then we had to,
I think, also have some management reforms.
I thought it was very sad situation, but I think the city council, and
the
Mayor, by their failure to act responsibly, forced us into basically what
the
city of -- the State of New Jersey has done in the past with cities. It's
not
unusual for a state government to have to step in when a city government
does a
terrible job. That's the problem we found ourselves with.
MS. LIASSON: Speaker Gingrich, I want to ask you about Congressman Jay
Kim,
who has just pled guilty to some finance --campaign finance violations. Do
you
think he should resign his seat?
REP. GINGRICH: I don't know enough about the case at this stage to
comment
in any detail. I think it has to be thoroughly reviewed, and I think that
will
happen in September when we come back.
MS. LIASSON: Let me ask you a follow-up about this. You know that
Congressman Shays is planning to move forward with campaign finance
reform.
He's someone who has been very loyal to you. Do you owe him one? Are you
going
to back him up when he comes forward?
REP. GINGRICH: Well, I've told Chris that I want to work with him on
campaign reform, but any campaign reform which does not include the unions
remember, the unions already this summer are running commercials which
clearly
violate the common cause model of campaigns, and which have not yet been
subpoenaed by the Senate, and have not yet been looked at in terms of
finance
reform. So, I would simply say, any reform which moves, ought to include
the
unions. And we ought to look at exactly how the reform would work in the
real
world.
MS. LIASSON: So, you're not going to back him up?
REP. GINGRICH: I think -- I hope he's going to look at this whole issue
and
help us move forward in a positive way. But I think one of the things
people
need to realize is, we're only in the opening stages of an investigation
which
will teach us a great deal more about what actually happened in 1995-1996,
and
I think it will be useful to know who broke the law, what laws were
broken,
before we rush off in order to change the laws, since much of what
happened in
'95-'96 was breaking existing law.
MS. LIASSON: Well, Senator Thompson hasn't been able to come up with a
smoking gun. Do you think that Congressman Burton is going to be able to
do
better when his hearings begin?
REP. GINGRICH: Well, let me say, first of all, I think Senator Thompson
has
come up with some very troubling facts, and some very troubling admissions
by
people. There clearly was more money laundering in 1996 by the Democrats
than
any time since 1972. We've never seen this scale since the reforms of the
late
'70s. I think we'll learn more things as the hearings go on. I think that
Chairman Burton's committee is involved in a very deep, thorough
investigation
of law breaking, and I think that they will reveal some very troubling
things.
MR. WILLIAMS: What about the question of whether or not Janet Reno
still has
the trust of the Congress?
REP. GINGRICH: Well, I think Senator Lott said it well the other day. I
think that there is a very deep sense that there should be an independent
counsel, and a great deal of trouble that the Justice Department has been
blocking, for example, allowing the Buddhist nuns to testify. There's no
reason
to stop them from testifying, and it certainly looks like she is
politicizing
the Justice Department.
MR. SNOW: Mr. Speaker, Human Events reports this week that Bob Barr, a
Republican from Georgia, is going to introduce a motion to call Janet Reno
to
the Hill and explain herself. Do you support that?
REP. GINGRICH: I think she should have to explain why they're taking
many of
these steps. I think, frankly, we should be looking at, if necessary,
subpoenaing documents that indicate, what are the trail of decisions here?
I
find it very troubling that you can have this much evidence of clear law
breaking, and still have --and law breaking which extends very high up,
and
still have no independent counsel, and have the Justice Department acting
as
though it was shielding the White House from the Senate investigation
rather
than helping the Senate.
MR. SNOW: You think she's -- you think she's running a cover-up?
REP. GINGRICH: I didn't say that. I just said it's troubling. I think
what
Congressman Barr is trying to do is get at the underlying facts of why is
it
happening, and whether or not it is a cover-up. We don't presently know
enough
to say it is, but it certainly is not an active, aggressive effort to get
the
truth out in the open.
MR. SNOW: Mr. Speaker, nearly four weeks have passed since some members
of
the House -- well, I don't -- plot may be too strong a word -- talked
about
replacing you. Do you have any confidence that you're not going to have at
least one more attempt at your leadership or speakership before the end of
the
year?
REP. GINGRICH: Let me just say, we have the narrowest majority since
1954.
And I said the day after the election, it will be very tricky to lead a
majority of only 10 or 11 members with a Democratic president in the White
House. On the other hand, the fact is that well over 200 members of the
House
favor my being speaker under any circumstance. You know, I think I
probably
have more support than O'Neill did as a percentage of my conference. I
have
more support than Wright or Foley did as a percentage of my conference.
And I
think there that there are a handful of people who gripe occasionally, but
there was never a coup. It was all exaggerated.
People have the right to complain, and I don't run a machine. I
encourage
dissent. I encourage openness, and I encourage people to be able to get
out in
the open what they're concerned about. That, then, sometimes I think gets
hyperventilated, and goes into sort of a soap opera. But the fact is, on
every
vote that mattered, we won.
On every vote that mattered, we were unified. And, as a party, we are
achieving the goals we set out to. We are cutting taxes. We are balancing
the
budget. We are saving Medicare.
MR. SNOW: Mr. Gingrich, finally, a last question. Based on all those
triumphs, you're going to New Hampshire during your break. Are you going
to run
for president?
REP. GINGRICH: I don't think so. I think I'm going to New Hampshire
simply
to be able to be with Charlie Bass and John Sununu and do some
fundraisers, and
maybe once again go and see if we can see one or two moose, which we did
very
successfully in 1995.
MR. SNOW: Okay. House Speaker Newt Gingrich, thank you so much for
joining
us today.
END