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MR. MCLAUGHLIN: Issue one: Trade wars intramural.

PRIME MINISTER JOHN HOWARD (Australia): (From videotape) The president has reaffirmed his commitment to the importance of APEC. We both want to have an effective World Trade Organization round, we want it to be comprehensive, we want everything on the table.

MR. MCLAUGHLIN: Australian Prime Minister Howard is referring to the warm-up table for the upcoming November WTO round in Auckland this weekend. New Zealand is hosting the APEC summit. Two years after economic trauma hit Bangkok and Indonesia, over 20 heads of state will gather for the 10th annual meeting of APEC, the Asian Pacific Economic Community. APEC promotes economic and trade cooperation in the world's fastest growing economic region. Its 21 members make up almost half of all world trade.

The biggest problem that APEC leaders must face is a trade war, and they have one -- not between Washington and Beijing, nor between Washington and Tokyo. This war is within Washington, and like most conflicts in Washington these days, the trade war is the child of campaign 2000 -- free trade versus protectionism.

Polls show that most Americans favor protection for certain industries, such as steel. It's an issue that brings Pat Buchanan and Ross Perot's Reform Party together. The debate will take concrete form in Congress this month over the U.S.-Vietnam Bilateral Trade Agreement.

But the most contentious trade issue is still WTO membership for China. That's on the top of the congressional political psyche. President Clinton, and the bulk of his economic advisors, like Commerce Secretary Bill Daley and Trade Representative Charlene Barshefsky, want China in the World Trade Organization.

SEC. BILL DALEY (Secretary of Commerce): (From videotape) We have strongly stated we want to see China into the WTO. We have been negotiating with them for this entire administration and for years before that.

MR. MCLAUGHLIN: Chinese President Jiang Zemin and his prime minister, Zhu Rongji, agree with Daley.

But Al Gore, who was championed and successfully passed NAFTA, the North American Free Trade Agreement -- his was the deciding vote, remember, in the Senate -- now has taken to the tall grass on this issue. He wants to be invisible.

White House political advisors also, like John Podesta, and even more importantly, labor leaders, like AFL-CIO President John Sweeney, and United Steelworkers International President George Becker, are pushing Clinton and Gore to fight against WTO membership for China. And Gore needs organized labor to support his primary run against free trader Bill Bradley. Many believe Al Gore today has veto power over every Clinton presidential initiative.

Question: Whether China gets into the WTO or not will be clearer after President Clinton meets with Jiang Zemin in Auckland this weekend. On the Washington trade front, who are the players, who's winning, and who's losing?

Fred Bergsten?

MR. BERGSTEN: There are two groups of players. One group is in favor of globalization and further trade liberalization; that's the business community, agriculture, most Republican members of the Congress. On the other side, those who oppose globalization: organized labor; some specific industries, like steel; some environmental groups and others who don't like the intrusion of the outside world into our business.

MR. MCLAUGHLIN: And the Democrats on the Hill?

MR. BERGSTEN: Well, the Democrats lean heavily toward organized labor and are against globalization. But the big player always in trade policy is the president, and now the vice president. As you indicated, they have said they're in favor of open trade, but in fact, they're not pushing it. In fact, they are afraid to take on the labor Democrats, take any initiatives that would open that wound within the Democratic Party and thereby jeopardize their chances in election 2000.

MR. MCLAUGHLIN: Have there been any sightings of Al Gore on this issue of trade?

MR. BERGSTEN: The sightings go back a long way to the NAFTA debate, but not much since. And behind the scenes, the suspicion would have to be that he wants to keep this issue submersed to avoid fissures within the Democratic Party.

MR. MCLAUGHLIN: What is the president's own personal opinion, and what does he say about the politics of this issue?

MR. BERGSTEN: The president's personal proclivity is toward open trade, liberalization. He knows it's in the U.S. economic and foreign policy interest. But he doesn't want to jeopardize Al Gore's chances next year and he, therefore, seeks in any new trade agreement, like with China, restrictions on imports into the U.S. to help protect steel, textiles and other industries and their workers who don't want to compete.

MR. MCLAUGHLIN: One final question before I move to another panelist -- probably not of your distinction, however. My question to you, Fred, is the WTO and China's membership in it; do you see that emerging positively out of Auckland and APEC? And do you see it in the cards in the foreseeable, like six months future?

MR. BERGSTEN: I hope so, but I doubt it. And the reason is twofold. The internal debate here in the United States, where, at the end of the day, I'm afraid the president will not have the political courage to let China in. But then, bouncing back to China, the fact that the Chinese leadership, knowing that, won't take the domestic heat within China to offer up the kind of deal that would clinch it here.

MR. MCLAUGHLIN: Well, Larry, I think we've pretty much covered the waterfront here with the former eminent person from the United States to APEC, whose position Fred held. But do you have something to say about this?

MR. KUDLOW: Yeah. I basically agree with Fred's take. But there's two big interest groups he left out; one is the whole technology industry and Internet users throughout the country on their computers, and two is the American consumer. The American consumer learned in the last two years, even as Asia went down, that free trade is a blessing because we can import very low-priced goods and services, boosting purchasing power, making family life and business life a lot better, with a strong dollar in particular.

So I think the opinion polls are not really picking up yet, because the questions are asked badly. They're always asked in terms of steel and manufacturing. But if you asked a pure consumer-directed opinion poll -- consumers love free trade. They have realized the benefits of it enormously in the last two years.

The second point is technology. We are obviously selling a ton of chips and computers around the globe. They desperately need exports.

But think of this, John: technology in the house. Any American consumer can shop around the world for the best quality goods at the lowest available price by surfing the 'net, as long as the U.S. has low tariffs and low trade barriers.

MS. CLIFT: Well, I appreciate being a panelist on "It's Your Business." (Laughter.)

MR. KUDLOW: So that's --

MR. : This is a good learning experience.

MR. MCLAUGHLIN: Yes, Eleanor? Join the "It's Your Business" panel.

MS. CLIFT: Right. And you all --

MR. : And your next step is going to be investment funds.

MS. CLIFT: Right. You'll make me lots of money, I hope. (Laughter.)

I think you all have discovered a trade war here that doesn't exist. I mean, first of all, normal trade relations passed for China by the same margin as last year, which shows that China is not the toxic issue that people thought. Second, in the Democratic Party, Bill Bradley was the point man on NAFTA when President Bush was president. He's hardly an alternative to Al Gore. The labor movement has nowhere else to go when it comes to a Democratic presidential candidate.

MR. BLANKLEY: Now, Eleanor --

MS. CLIFT: On the Republican side, George Bush supports WTO -- Elizabeth Dole, John McCain. The only people who are on the other side? Pat Buchanan, Gary Bauer. And they have no prayer to be a president.

MR. BLANKLEY: No, no, no. Eleanor, you missed the political -- you missed the political point.

MR. MCLAUGHLIN: All right. Eleanor missed the political point. What is it?

MR. BLANKLEY: The political point is that the public, unfortunately, tends to be protectionist. Most members judge that it's a safe vote to vote protection and a dangerous vote to vote free trade, and therefore the center is shrinking. The free-trade center in American politics -- elective politics -- is shrinking in the absence of a reeducation campaign for the public. And now that you've got a -- probably have a WTO deal that won't be as good as the one that Clinton kicked away --

MR. MCLAUGHLIN: You mean WTO-China?

MR. BLANKLEY: Yes. It won't be as good as the one that was kicked away earlier in the year --

MR. MCLAUGHLIN: When Rongji came here?

MR. BLANKLEY: Yeah, exactly. That'll be --

MR. MCLAUGHLIN: Rongji had a good deal, but he didn't go for it.

MR. BLANKLEY: That'll be a particularly good little stick to use against the vote when it comes.

MR. KUDLOW: But politicians have to understand, if they phrase --

MR. BERGSTEN (?): No, they don't. (Laughter.)

MR. KUDLOW: -- if -- well, politicians are sometimes smart, but not often. (Laughter.)

If they phrase the trade debate in terms of consumers and their buying power, it's a win. If, on the other hand, they lapse back into old-style interest-group big-industry big-steel-type politics, then they run the risk of losing.

Don't forget, John, trade, exports and imports; two-way trade is today 23 percent of American gross domestic product. It is crucial to our prosperity.

MR. MCLAUGHLIN: I understand. Is there anything laying out there that you want to seize, attack, caress or whatever? (Laughter.)

MR. BERGSTEN: The American consumer unfortunately is not a player in the trade debate. They are not organized, they don't contribute money, they don't inject themselves into the debate. They should be big, but they are not.

The other point --

MR. KUDLOW: But they vote.

MR. BERGSTEN: -- you could underline --

MR. KUDLOW: But they vote.

MR. BERGSTEN: -- that President Clinton --

MR. KUDLOW: They vote.

MR. BERGSTEN: -- made the tragic error in turning down Zhu Rongji in April. He had a fantastic deal in front of him.

MR. KUDLOW: I agree.

MR. BERGSTEN: He could have promoted economic reform in China --

MR. KUDLOW: Absolutely.

MR. BERGSTEN: -- as well as trade interests. He blew it. And I am not sure he can put it back together.

MR. MCLAUGHLIN: Yeah. But at the same time, he was faced with the breaking Cox report, was he not?

MR. KUDLOW: Actually --

MR. MCLAUGHLIN: But let me ask you this. We have got to move on. I have one more loose piece of business, and that's Vietnam.

There is a breakthrough, a piece of legislation. It's a major trade bill, fully open trade with Vietnam, fully burying everything that's in the past with Vietnam, at least on a diplomatic level and business level. It is going to pass the Congress, will it not?

MR. BERGSTEN: It will. It's a minor trade bill. Vietnam is a small economy; it's reforms are faltering. It won't mean much economically. But it buries the past.

MR. MCLAUGHLIN: It's minor for us, but it's big for them.

MR. BERGSTEN: And it's very important psychologically and politically.

MR. MCLAUGHLIN: I agree. I believe it will pass. And that puts that issue to rest, right?

Exit: Will China join the WTO before January 1, 2000, three and a half months from now? Larry Kudlow.

MR. KUDLOW: Yes, they will. And in the House of Representatives, which is going to be tougher than the Senate, watch for David Dreier, House Rules chairman. He is going to be one of the big players in getting this free-trade deal.


MS. CLIFT: American corporations underwrite political campaigns. They want WTO. It's in the American national economic interest. Yes.

MR. MCLAUGHLIN: Before January 1?


MR. BLANKLEY: Too close to call, but probably it will lose on a close vote.

MR. MCLAUGHLIN: Really? Despite the fact that the Congress just gave it normal trade status?

MR. BLANKLEY (?): Yes.

MR. MCLAUGHLIN: What do you think? You have already expressed yourself. Do you want to revise your opinion in the light of the esteemed Group?

MR. BERGSTEN: No. I wish we would get it. But I don't think we will. I don't think it will --

MR. MCLAUGHLIN: What is going to block it?

MR. BERGSTEN: I don't think it will ever come to a vote because the president will not want to raise these issues within the Democratic Party by agreeing to a deal with Zhu that he brings to the Congress and has to fight for.

MR. MCLAUGHLIN: Because it's an election year?

MR. KUDLOW: The trouble is he --

MR. BERGSTEN: Because an election is coming.

MR. MCLAUGHLIN: That's why I think it will happen before January 1. If it doesn't happen before January 1, it won't happen, but I believe it will.

When we come back: Is William Clinton a lame duck or a fighting cock?


MR. MCLAUGHLIN: Issue two: Limp, if not lame, duck.

SENATE MAJORITY LEADER TRENT LOTT (R-GA): (From videotape.) Unless he decides that he wants to get some things done, then he's moving in the direction of being a lame duck just because he's going to be playing politics with the Democrats in Congress.

MR. MCLAUGHLIN: Fifteen months from now, in January 2001, President Clinton's second and final term of office will officially end. But some say it is already unofficially over. Clinton is a lame duck, a zoological metaphor meaning an office-holder, in this case Clinton, whose power is diminished because he is soon to leave office. To put a date precisely when a president begins to become a lame duck is a matter of art, not science, but here are some early indicators of the onset of Clinton lame-duckery.

One, domestic defeats. A short list: The Senate and House's refusal to support a ground war in Kosovo. The House's refusal to authorize Clinton to conduct military operations and military strikes against Serbia. Clinton's incremental gun ban proposals rejected by Congress as unconstitutional and/or whatever.

Two, Capitol momentum. The president has repeatedly rejected GOP tax cuts, yet the Senate and House both passed the very tax cut bills deplored by Clinton. The momentum, moreover, appears to be with Capitol Hill.

Three, policy punts. Mr. Clinton talks about saving Social Security as part of his legacy but has yet to present Congress with a full-fledged plan, and openly ignored John Breaux's, Bob Kerrey's, Judd Gregg's and Charles Grassley's highly regarded bipartisan report earlier this year.

Four, foreign adventurism. Presidents who are stymied in domestic politics, White House scholars say, turn to foreign affairs for renewal. Thus, some believe Clinton's Kosovo war and his rushing around overseas typifies a lame duck's use of dwindling political power.

Five, shifting spotlight. The political fortunes of First Lady Hillary and heir-designate Al Gore now garner as much or more media attention than Mr. Clinton. A flag of limited political stamina.

Question: Will a Clinton veto of the major tax cut bill demonstrate Clinton's political vigor?

Eleanor Clift.

MS. CLIFT: I think it's more of an indication of the weakness of the tax cuts as an issue. I mean, the Republicans are behaving as though they think if they repeat this often enough that they have to return this money, that the public will somehow clamor for it. They're acting like millennial cultists in their fervor about tax cuts that the public seems totally disinterested in.

Secondly, the president as a lame duck, as long as he has the veto and he has the power to communicate, he's not a lame duck.

And secondly, the Republicans --


MS. CLIFT: Thirdly, the Republicans are so spooked by him because he has out-psyched them so many times that they will never fully discount him, and they shouldn't.

MR. MCLAUGHLIN: They're traumatized by him.

MS. CLIFT: That's right! (Laughs.)

MR. MCLAUGHLIN: What do you have to say on this subject?

MR. BLANKLEY: A couple of things. First --

MR. MCLAUGHLIN: Is he a lame duck?

MR. BLANKLEY: No he's not a lame duck. I don't think a lame duck technically occurs until after the election. But --

MR. MCLAUGHLIN: It's not like a recession, Tony. I said it was art not science. It occurs with various people at various times. With Reagan, I thought it was early.

MS. CLIFT: (Laughs.)

MR. BLANKLEY: But my larger thought was that Clinton has never been anything other than a very good political counter-puncher. So it's not a question of whether he's going to be able to show initiative -- he's never shown much initiative successfully -- but whether there's something coming out of Congress he can counter punch against. He's still pretty good at that. The question as to how much stick he's got will be if there are enough Democrats in the Senate to vote for a compromise tax bill, can he block the 10 or 12 Democratic senators from voting that way.

MR. MCLAUGHLIN: What's your feeling on this, Fred?

MR. BERGSTEN: I think you have to make two distinctions; one is between domestic policy and foreign policy. Domestic policy, he is a lame duck; foreign policy, he can still do a lot of things, depending on the world.

The other distinction is between positive power and negative power. He won't be able to do anything positive -- Social Security reform and the like. He does have negative power; he can and will block the tax bill, it will not be overridden. So he has negative power; he can stop other initiatives dead in their tracks.

MR. MCLAUGHLIN: What about this instigative power: medical care reform in the form of enhanced benefits, and particularly pharmaceutical drug relief?

MR. BERGSTEN: If the Republicans in the Congress will work with him, then he can do things.

MR. MCLAUGHLIN: I'll give you 20 seconds.

MR. KUDLOW: Well, look, he's being lame duck because he's losing Democrats on the tax bill. Because Eleanor is completely wrong; the polls are showing that once the public sees a good fight on taxes, they support broad-scale tax cuts.

His whole agenda -- this is his Achilles' heel. Because of the impeachment hearings he owes a lot of debts to the liberal wing of the Democratic Party, and he's now trying to pay them off with an expanded entitlement, expanded social spending, and against tax cuts that aren't targeted.

MR. MCLAUGHLIN: Is it going to work?

MR. KUDLOW: It will not work because he's losing the country. He's winning the liberal Democrats, but he's losing the country, which means he loses the moderate Democrats.

MS. CLIFT: Larry, he's not losing the country on pharmaceutical benefits --

MR. KUDLOW: Oh yes he is!~

MS. CLIFT: -- or spending for education or stopping crime.

MR. KUDLOW: Oh yes he is!

MS. CLIFT: All of those things are popular!

MR. MCLAUGHLIN: Well, Eleanor, I don't think they trust his numbers anymore.

MR. KUDLOW: That's right.

MR. MCLAUGHLIN: That's his problem.

Okay. Clinton's quiver. Clinton's ability to postpone lame-duck status depends on getting a boost from one or more of his pet policy projects, each backed by different constituencies.

Item: entitlement boosts. Clinton wants to expand Medicare eligibility and give prescription drug coverage to seniors, adding $120 billion over 10 years to the country's Medicare taxpayer outlay. Clinton is backing on "gray power" to boost his own power.

Item: China trade boost. Clinton wants to bring China into the World Trade Organization as badly as China wants to join. But this spring, both countries were constrained in that goal. China was snared by nuclear spying and the U.S. by the embassy bombing. Now Clinton is counting on U.S. business to back China's WTO entry and give him a power boost.

Item: gun ban boost. Each new shooting tragedy sends Bill Clinton and the Democrats in hot pursuit of new laws to ban guns. Here Clinton counts on gun-ban liberals joining with suburban soccer moms to give him enough clout to overcome the NRA and the GOP.

Item: Kosovo boost. Clinton has the Central Intelligence Agency working overtime to oust the Yugoslav strongman Slobodan Milosevic. If the combination of the CIA and back-breaking sanctions work, the subsequent Milosevic assassination or overthrow will give Clinton a U.S. public opinion boost.

Question: So we've got gun-ban liberal and suburban soccer mom power, U.S. business power, gray power, and U.S. public opinion power as a whole if Milosevic is unseated. How many of these arrows in Clinton's quiver are likely to rescue him from any lame-duck status? I ask you.

MR. BLANKLEY: I'm not sure I got the whole list, but --

MR. MCLAUGHLIN: Gray power --

MR. BLANKLEY: Yeah, I --

MR. MCLAUGHLIN: -- soccer mom power --

MR. BLANKLEY: I don't --

MR. MCLAUGHLIN: -- business power.

MR. BLANKLEY: I don't think he's going to get much unless it's negotiated with Congress. In a negotiation, I think he's got a fair amount of staying power. He's a good negotiator, and he does have the Republicans scared. But if he has to confront, rather than negotiate, then I don't think he's going to get much.

MR. MCLAUGHLIN: You know, I get the impression you really think he's winding down, except for foreign policy.

MS. CLIFT: (Chuckles.)

MR. BLANKLEY: I'm not sure he ever wound up, really.

MR. MCLAUGHLIN: Well, he wound up enough to be where he is, and to have survived an impeachment and a trial --

MR. BLANKLEY: As a politician --

MR. KUDLOW: Barely. Barely.

MR. BLANKLEY: -- as politician, but not as a person who advances an agenda successfully.

MR. MCLAUGHLIN: Do you want to add to anything you've observed here?

MR. BERGSTEN: Well, I think the main arrows in the quiver are outside the United States. He has a chance, over the last year-plus, to do something in the Middle East, in South Asia, India-Pakistan --


MR. BERGSTEN: -- in Africa, in a few places in the world, if they break in a direction that is susceptible to response.

MR. MCLAUGHLIN: He's clearly --

MR. BERGSTEN: That, I think, will be the focus.

MR. MCLAUGHLIN: Yeah. He's clearly focusing on a new relationship with Barak, but he's not going to play tough cop, and he's signalled that to Arafat. The Middle East may be -- may prove lucrative for him.

MR. KUDLOW: He -- lookit, let's go back --

MR. MCLAUGHLIN: And Cuba. He might lift the embargo.

MR. KUDLOW: Any president who exercises the veto power as a strategy is by definition a weak president. The great presidents, like Reagan, for example --

MS. CLIFT: Listen, the gun issue --

MR. KUDLOW: -- don't have to worry about that.

MS. CLIFT: -- the gun issue --

MR. KUDLOW: Let me make a second point --

MR. MCLAUGHLIN: No, no, no. Quickly!

MS. CLIFT: Reagan's been gone a long time, Larry.

MR. KUDLOW: Yeah, but it's a good historic example --

MS. CLIFT: The gun issue is a good issue for the Democrats and for Clinton, whether they get legislation or not. And secondly, he might trade to get some modest tax cuts to get that pharmaceutical benefit, and that's a nice legacy item to have expanded that about entitlement -- (inaudible due to cross talk).

MR. MCLAUGHLIN: Yeah. Well, it's a nice legacy, but dream on.

Exit: Is Clinton a lame duck now, or is any lame duck status being forestalled by a Clinton comeback on the way?

Larry? Quickly.

MR. KUDLOW: He's lame duck. Just as he threatened to veto the welfare bill and he vetoed it three times, and the tax bill in '97, he's going to wind up passing the tax bill this time, and it will show his weakness.


MS. CLIFT: Anybody who communicates as efficiently as Clinton, unlike Larry Kudlow, I think is never a lame duck.

MR. MCLAUGHLIN: Is not a lame duck?

Is he a lame duck now?

MR. KUDLOW: I'm hitting my stride!


MR. BLANKLEY: I think he's more of a silly goose than a lame duck.

MR. MCLAUGHLIN: He's a silly goose?


MR. MCLAUGHLIN: Or we're silly gooses to think he's a lame duck?

MR. BLANKLEY: He's a silly goose.

MR. MCLAUGHLIN: Silly goose?

MR. BERGSTEN: Lame duck on domestic issues, but still pretty powerful on the international front.

MR. MCLAUGHLIN: The answer is, he's a limping duck and he'll be a lame duck within four months.

We'll be right back with predictions.


MR. MCLAUGHLIN: Predictions. Larry.

MR. KUDLOW: A lower capital gains tax cut indexed for inflation ensures prosperity for another several years and new record highs in the stock market.

MR. MCLAUGHLIN: As long as the Chinese don't devalue.


MS. CLIFT: Clinton will go back to Congress next year with fast track, one of the few big defeats he's had as a president, and try to get it.

MR. BLANKLEY: Because of party election jitters, the next few months are going to be some of the most fighting months between Congress and the president.

MR. MCLAUGHLIN: Combative.



MR. BERGSTEN: A political reversal in 2000. The Republicans win the White House, the Democrats win the House, and we're back to the situation of the '80s and the early '70s, at least two-thirds of the way.

MR. MCLAUGHLIN: The House of Representatives will pass broad protections for patients' rights, and in conference with the Senate, a patients' bill of rights act will emerge that Clinton will sign in mid-October.





MR. MCLAUGHLIN: Issue three: All hat, no cattle.

REP./SEN./GOV./MR. : (From videotape.) We must clean up this system where special interests rule.

REP./SEN./GOV./MR. : (From videotape.) The top priority must be to prohibit soft-money contributions to national party committees.

REP./SEN./GOV./MR. : (From videotape.) The total amount of money that's in our political system is a national disgrace.

REP./SEN./GOV./MR. : (From videotape.) We need campaign finance reform, and we need it badly.

MR. MCLAUGHLIN: Despite the endless rhetoric about campaign finance reform from every politician and presidential hopeful, there's been little or no actual reform. Maybe that's about to change, though. Scheduled for debate in both the House and the Senate this month or next are major bipartisan reform bills: Shays-Meehan in the House, McCain-Feingold in the Senate. The primary focus of both is to ban soft money. That's the money that bypasses federal election limits on contributions by special interests. Big unions, big corporations, big individuals can give unlimited money to political parties for quote, unquote, "party-building purposes," like getting-out-the-vote drives and the defrayal of overhead costs.

But increasingly, both parties have been channeling the soft money into issue ads, advertisements that are supposed to be promoting the parties' positions but either indirectly attack individual candidates or indirectly endorse a candidate.

In the last presidential election, '96, the parties raised $260 million in soft dollars; the projection for 2000, $750 million.

Question: Congressman John Doolittle, Republican of California, proposes lifting all limits on contributions, including soft money, and replacing limits with a total-disclosure requirement, posting identities of all donors giving $200 or more, and posting duplicate state-to-FEC reports on the Internet in speedy fashion.

What's the rationale for Doolittle's revolutionary approach? I ask you, Tony Blankley.

MR. BLANKLEY: That's a very good proposal. In fact, something very much like it was proposed by my own boss Newt some years ago.

It's become feasible because of the Internet, to have just-in-time posting so that you get relevant information in time, before the election.

But the great rationale for it is that any other method of trying to control campaign finances is unconstitutional; it's a violation of the First Amendment and the right to free speech. And so it's going to be this, or it's going to be nothing.

MR. MCLAUGHLIN: What's wrong with that? Public disclosure on everything, immediate? Keep the FEC, not to a 120-day schedule; when the states have their reports, they are immediately transferred to the FEC?

MR. BERGSTEN: It doesn't deal with the basic problem.

MR. MCLAUGHLIN: What's the basic problem?

MR. BERGSTEN: People who are still buying favors, people who are still buying support.

MR. MCLAUGHLIN: What kind --

MR. BERGSTEN: These proposals go in the opposite direction --

MR. KUDLOW: Oh, Fred.

MR. MCLAUGHLIN: Quickly. What kind --

MR. BERGSTEN: -- of what's needed.


MR. MCLAUGHLIN: -- what kind of immunity do you get from disclosure? We have only got five seconds. (Laughter.)

MR. KUDLOW: Look, you get no immunity from disclosure. There is nothing wrong with money as long as it's legal and disclosed. This is a free-market capitalist country --

MS. CLIFT: The proposal is obscene -- and you never go to him if you only have five seconds left -- (laughter) -- but the proposal is obscene because it would just legitimize buying your congressman in real time. (Laughs.)

MR. MCLAUGHLIN: That's the First Amendment, Eleanor!

MR. BLANKLEY: The question is --

MR. MCLAUGHLIN: It's a constitutional right, free expression.

MR. KUDLOW: This is a free country, Eleanor.

MS. CLIFT: If they can limit me to giving --