THE MCLAUGHLIN GROUP
HOST: JOHN MCLAUGHLIN
JOINED BY: MICHAEL BARONE, TONY BLANKLEY, JAMES CARNEY,
AND ELEANOR CLIFT
TAPED FRIDAY, SEPTEMBER 17, 1999
AIRED THE WEEKEND OF SEPTEMBER 18-19, 1999
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MR. MCLAUGHLIN: Issue one. Here it comes -- the GOP's nervous breakdown. (Plays clip from "19th Nervous Breakdown," by the Rolling Stones.) Nervous breakdown. That's what the Republican Party is headed for. Why the panic? One, Buchanan's bolt.
PATRICK BUCHANAN (Candidate for the presidency): (From videotape.) I think what we have is a one-party system in Washington, D.C., that is masquerading as a two-party system, and I think what we need is a real opposition party, a party that can become a second party and maybe a first party. So we are taking a hard look at leaving the Republican nomination run and running for the Reform Party nomination --
MR. MCLAUGHLIN: Buchanan's apostasy has Republicans quaking in their wing-tips. Buchanan could derail the George W. Bush bullet train. One poll shows that if Buchanan is the Reform Party candidate, he cuts Bush's 15-point lead over Al Gore to four points. Bush's aides are so panicky they have contacted Jesse Ventura, Minnesota governor and the Reform Party's de facto leader, asking him to prevent Buchanan from getting Reform's nomination. Ventura says if he can't find a candidate to block Buchanan, he will, quote/unquote, "consider running" himself.
Two, Bradley's surge.
FORMER SEN. BILL BRADLEY (Democratic candidate for the presidency): (From videotape.) All of us know that in democracy, as in life, the smallest hope can make all the difference. The mightiest river begins with a single drop of water. That's how it all starts.
MR. MCLAUGHLIN: That's how Bill Bradley's campaign for the Democratic presidential nomination started; first a trickle, then a stream, now a rising river. In both New Hampshire and New York, Bradley is in a statistical dead heat with Al Gore.
This makes Republicans sweat. The former New York Knicks star is now seen as more electable than Gore, untainted, and collecting key endorsements like Michael Jordan's.
Question: How worrisome is the Buchanan-Bradley news for Republicans? Should they be taking Valium and St. John's Wort? Michael Barone?
MR. BARONE: I think they should just have a couple aspirin and get a little rest. (Laughter.) No, the fact is the political news so far this year has actually been much favorable for the Republican chances in 2000 than almost anybody thought. What you're talking about here is a correction that's going in the other direction.
Yes, it's true that Bill Bradley is running better than Al Gore in the latest NBC-Wall Street Journal poll. Clinton fatigue is clearly hurting Gore. Maybe it will continue to do so in 2000, maybe not, but right now, Bradley looks like -- and he's competitive, as you pointed out, and it appears in New Hampshire and New York.
As for Pat Buchanan, John, his campaign was faltering, and the fact is that Pat Buchanan, in the Iowa straw poll August 15th, got fewer votes this -- 1999 -- than he did in 1995, even though two and a half times as many people participated in that straw poll. The idea that he's going to take lots of Christian right voters out with him is just not on. He's said most recently that he's going to downplay the social issues if he runs as a Reform candidate. He talked a lot about them when he was assailing the Republican Party; he's not doing it now. His stands on trade and foreign policy, which are his distinctive things, those were the stands of Colonel McCormick and Father Coughlin in the 1930s and 1940s. They weren't winners then and I don't think they're winners now.
MR. MCLAUGHLIN: Well, his America First stand and also his anti-one-world government stand will appeal to the rank and file Reform Party members.
Eleanor, what are you thoughts? Do you want to take a piece of this?
MS. CLIFT: Well, that giant sucking sound that you hear is the sound of the Republican Party sucking up to Buchanan, trying to get him to stay. But look, Michael is right, Buchanan is faltering in the Republican Party. This is his last hurrah. He wants, the capstone on his political career, to get in on those presidential debates. And there is nobody who can carry the core Reform Party message better, and that is, the corporate takeover of the two parties.
Now, as for Bill Bradley, he's doing well in New Hampshire, New York and New Jersey; I don't know about the rest of the country. I still think the institutional weight of the Democratic Party is behind Al Gore.
MR. MCLAUGHLIN: Tony, what are your reflections?
MR. BLANKLEY: Well, it's interesting. Buchanan can have an interesting effect on the dynamics of the campaign, assuming he got the Reform nomination, in a very odd way. On his social issues, he's going to tend to force Bush, assuming Bush is the Republican nominee, to keep a little bit closer to his base and not go for the middle ground. But on his trade issues, he's likely to get Gore, assuming Gore is the nominee, or Bradley, if he is, to move back to his base to protect his labor base. So in a very odd way, although normally the Republican and Democratic candidates will want to secure their bases first and then go for the middle ground, Buchanan can force them both to stay fighting for their bases. So he could have a very unusual, almost dysfunctional, effect on the campaign dynamics.
MR. MCLAUGHLIN: You talked with Buchanan himself a few days. What were your impressions, Jay?
MR. CARNEY: John, I think he's going to do this. He and his sister are studying the nomination process. They think it's possible as long as the Bush forces don't get to Ventura and they don't try to manipulate the system to block him. And I think Michael and Eleanor are wrong, because I think Buchanan's poor showing in Ames is not all that reflective of how he would do in the Reform Party, because if he were the Reform Party nominee, he would stand out; and within the Republican Party now, he's just one of several conservatives. And against Bush and Gore, if it's Bush and Gore, he'd, I think, do very well and hurt Bush. And Bush's people are extremely worried.
MR. MCLAUGHLIN: A quick word about the arduous road ahead of Buchanan if he decides to seek the Reform Party nomination. He's got to get 3,000 to 40,000 signatures in 28 states. He's got to get the delegates of the reform Party to vote for him; correct?
MR. CARNEY: Right.
MR. MCLAUGHLIN: And he's, you know, faced with the antagonism of Jesse Ventura.
MR. CARNEY: Well, if Jesse Ventura runs, then I think Buchanan can get it, because who else is going to be able to collect those signatures?
MR. BARONE: Well, you have this very --
MS. CLIFT: The Reform Party is still Ross Perot's party, and Ross Perot has given the green light to Pat Buchanan. And frankly, even if Ross puts on a yellow boa, I think he takes the power --
MR. BARONE: Eleanor, don't give Ross any ideas.
MS. CLIFT: But there is an opportunistic quality to Buchanan's candidacy. Number one, he's selling a book -- happy coincidence. Two, he fought in two elections to get an anti-abortion plank in the Republican Party platform, and now he's basically saying he's going to put that issue aside. You know --
MR. BLANKLEY: Eleanor, I'm not for Buchanan's Reform Party run, but I think you've got to grant him sincerity on this.
MR. MCLAUGHLIN: Is he a spoiler for George Bush, Jr.?
MR. BLANKLEY: I think probably not. I think -- look, I think there's up to 30 percent of the public that could vote for an ideal third party candidate. I don't think Buchanan is it. I think his range is about four to about 12, probably about 10.
MR. BARONE: Well --
MR. BLANKLEY: That means he's probably worth -- assuming it splits two to one against the Republicans, he's worth about three or four points.
MR. BARONE: John --
MR. MCLAUGHLIN: Is there any way of really predicting how it would split at this point, and how much indeed Buchanan would pull from anybody?
MR. BARONE: John, there are three --
MR. BLANKLEY: You can't pick for sure, but instinct tells every Republican it's going to hurt about two to one against Republicans.
MR. MCLAUGHLIN: If the candidate were Ventura, would he pull less away from Bush?
MR. BARONE: Ventura would tend to pull from both -- potentially from both parties' candidates.
MR. MCLAUGHLIN: Equally?
MR. BARONE: I mean, he might pull new people in, as he did in Minnesota.
MR. BLANKLEY: I'm not sure Ventura has quite the stature in the nation to draw presidential votes.
MR. MCLAUGHLIN: How much do you think Ventura could pull, assuming Buchanan could pull a maximum of 15?
MR. BLANKLEY: I think Ventura -- maybe seven-aught-five --
MR. MCLAUGHLIN: Oh --
MR. BARONE: John --
MS. CLIFT: You know, they --
MR. CARNEY: I think Buchanan's message resonates. In Ames, within the hall, even though he didn't do that well in the polls, his speech got the most response. His message is powerful, even if it's wrong. And in debates, can you imagine, you know, Pat Buchanan going against Al Gore and George Bush? I think that Buchanan would do very well.
MS. CLIFT: Well --
MR. BARONE: Well, if Pat Buchanan is -- if Pat is going to get -- be in the 6 percent range, which I think is more likely, he's not going into the debates, under the criteria that the debate commissions have. I think that's true.
The other thing is that I think that 15 -- the 16 poll number that you showed -- other polls have been showing him more at the 6 range.
MS. CLIFT: Yeah.
MR. BARONE: I think that's more realistic.
MR. MCLAUGHLIN: Bill Bradley. What does Bill Bradley have to do to beat Gore?
MR. CARNEY: Well, he has to do exactly what he's been doing now. And Bradley is playing the underdog. And if Gore's smart, he'll try and turn the tables and pretend as though Bradley's now the favorite, because of these polls showing him doing better up against Bush, because Gore's problem is he's the institutional candidate, and anybody who doesn't like Gore is going to Bradley.
MR. MCLAUGHLIN: Bradley is presenting himself as Robert Kennedy redivivus, okay?
MR. CARNEY: (Chuckles.)
MR. MCLAUGHLIN: He's pretty far out on the liberal side. He's talking about universal health care, he's talking about gun control, and he's wooing the blacks.
MR. CARNEY: Well, that works -- that works in some states, like Eleanor was saying.
What Bradley --
MR. MCLAUGHLIN: Isn't he a little bit too far --
MR. CARNEY: -- Bradley's a boutique candidate, though, and he's --
MR. MCLAUGHLIN: Meaning?
MR. CARNEY: Meaning that he's the kind of candidate who appeals to intellectuals, to New York editorial boards, and to certain states, but not the whole --
MR. BLANKLEY: Look, look --
MR. BARONE: Oh, come on!
MR. MCLAUGHLIN: No breakthrough yet as far as he's concerned?
MR. CARNEY: Oh, he's -- I think he's --
MR. MCLAUGHLIN: Is he ready for the big league?
MS. CLIFT: Listen, this has --
MR. CARNEY: I think Bradley will win New Hampshire but lose the nomination.
MS. CLIFT: Right. This is going to be a very tight election. And you're right; he could win New Hampshire and lose the nomination. We could also -- if he does well enough, we could be looking at a Gore-Bradley ticket.
MR. MCLAUGHLIN: Has Bradley been too timid on his criticism of Al Gore?
MR. BARONE: Well, I think he's actually played that pretty well, John. I mean, he's been talking about honor and the presidency and things of that nature -- and there's no question whom he's going after there -- and of the Clinton fatigue voters who vote or potentially vote in the Democratic primary --
MS. CLIFT: He's basically running --
MR. BLANKLEY: Look, look, look --
MR. BARONE: -- he's doing very well. He's going left, which I think is maybe a fairly good strategy for the primaries, more dangerous if he gets into the general election, because it's not that left in the country.
MR. MCLAUGHLIN: Yeah, I'm surprised that you said that, because he's too far left --
MR. BARONE: No, I think that's --
MR. MCLAUGHLIN: -- and he's going to bleed to hemorrhage proportions on Super Tuesday, when he has to go south, and you know that.
MR. BARONE: I think Gore will do well in the South, but the South is not the majority --
MR. MCLAUGHLIN: I'm talking about Bradley. Bradley is going to bleed heavily there --
MR. BARONE: He is not --
MR. MCLAUGHLIN: -- unless he moves to the center and fights --
MR. BARONE: The South is --
MR. MCLAUGHLIN: -- he has to fight Gore on the centrist ground.
MR. BLANKLEY: Look, look --
MR. BARONE: John, the South is his weakest race, but then you come up March 7th and you've got New York and California, where he appears, on current polls, to be competitive.
MR. MCLAUGHLIN: All right. We're way over --
MR. BLANKLEY: One quick point: Gore's candidacy looks to me like Dole's last time. You've got so much institutional support behind him for the nomination that even if Bradley runs a better campaign, I still think he comes up short in the end.
MR. MCLAUGHLIN: In the national polls, Gore is 65 percent, Bradley 24 percent. Let's not lose sight of that, even though they are neck and neck in New Hampshire --
MR. BLANKLEY: Exactly.
MR. MCLAUGHLIN: -- and New York.
Exit -- a dual exit. Question one: Will Buchanan be the Reform Party nominee, yes or no?
MR. BARONE: I'll say no.
MR. MCLAUGHLIN: Eleanor?
MS. CLIFT: I'll say yes. (Laughs.)
MR. BLANKLEY: I'll say no, but I am not sure. (Laughter.)
MR. MCLAUGHLIN: Who is sure -- (laughter) -- except me? (Laughter.)
MS. CLIFT: (Inaudible) -- sure. (Laughter.)
MR. CARNEY: I say yes.
MR. MCLAUGHLIN: You say yes?
MR. CARNEY: Yes.
MR. MCLAUGHLIN: I say it's too close to call. (Laughter.)
MS. CLIFT: Oh, cop-out!
MR. BARONE (?): Chicken.
MR. MCLAUGHLIN: I will say no.
Exit question number two: Will Bradley topple Gore come August 2000 at the convention?
MR. BARONE: I'd say it's a close one but a no.
MR. MCLAUGHLIN: A no.
MR. BARONE: I'd say Gore squeaks in.
MS. CLIFT: I think it's going to be a competitive race, and I think Gore still wins.
MR. MCLAUGHLIN: Gore.
MR. BLANKLEY: I think Gore wins, yeah.
MR. MCLAUGHLIN: Gore wins.
MR. CARNEY: It's a sweep; Gore wins.
MR. MCLAUGHLIN: The answer is Bradley. (Chuckles.)
When we come back: Did President Clinton pardon 16 Puerto Rican terrorists to win a million New York Puerto Rican Senate votes for candidate Hillary?
MR. MCLAUGHLIN: Issue two: Dirty, greedy, fair?
While visiting the Riviera last year, I saw firsthand the scale of it. Sixty percent of all luxury yachts priced at more than $5 million belonged to Russians. Sixty-five percent of luxury villas renting at more than $100,000 per month were taken by guess who? Fifty percent of the clientele of the most expensive hotels in the area were Russkies.
Back home in Russia, needless to say, things ain't what they used to be; people are practically dying of hunger, and child mortality is on an African scale. Every penny the American taxpayers sent over has been stolen.
So writes Taki Theodorocopulos, describing Russia's vast corruption: "This month a multinational team of investigators documented the colossal scope of the Kremlin's international money ring: one, massive reserves diverted -- $50 billion" -- that's 50 "B" as in "boy" billion dollars -- "has been diverted since 1990 by Russian central bank officials into an offshore shell company." The cash, most of it IMF-originated, has never been accounted for.
"Two, corruption infiltrates U.S. banking system." Ten billion dollars of Russian money, $200 million of it in IMF funds, has shown up in the Bank of New York, the lucre from a believed massive money-laundering operation.
These revelations come as Russian President Boris Yeltsin is charged with taking more than a million dollars in bribes from a building contractor in Switzerland. Swiss agents say the contractor also paid thousands in credit card bills for Yeltsin and his two daughters. In a phone call to President Clinton this week, Yeltsin denied the charges.
Mr. Clinton and Vice President Al Gore continue to stand by the Russians, leading William Pfaff of the International Herald Tribune to write, "Bill's friendship with Boris, and Al's with Viktor Chernomyrdin, serve to identify them in their own eyes and, they thought, the eyes of voters as patrons of the new Russia and as men of state. They used American resources to keep friend Boris Yeltsin in power, itself an inducement to corruption." (Short audio break) -- revelations about the abuse of U.S. aid to Bosnia and Indonesia's brutal behavior towards East Timor after getting bailed out by the U.S. and the IMF, will these latest revelations about enormous Russian corruption and aid abuse, making Russia a true kleptocracy, undermine our U.S. foreign aid policy?
MR. CARNEY: Whew! Yes. But undermining U.S. aid foreign policy, you know, we don't --
MR. MCLAUGHLIN: What is the policy?
MR. CARNEY: Exactly. We haven't got much. We don't give a lot of money. It's extremely unpopular.
MR. MCLAUGHLIN: How much did we give away?
MR. CARNEY: I don't know the total --
MR. MCLAUGHLIN: About $15 billion.
MR. CARNEY: Compared to what could be given, when the need is --
MR. MCLAUGHLIN: Well, there has to be some criteria for it, even though it's a pittance by your estimate.
MR. CARNEY: John, it's never very popular. We should all just take a deep breath about Russia, however. You know, I -- the Clinton administration probably hitched its star too closely to Boris Yeltsin. But you have to remember that Yeltsin was a better alternative to anyone else out there over the last five or six years. And Russia has been, if not an ally, then a reasonably good friend in that part of the world the past seven years.
MR. MCLAUGHLIN: What do you think about this detached, philosophical attitude about this enormous international money ring?
MR. BLANKLEY: Look. Two points. First of all, it's not the foreign aid money, it's the IMF money, which we direct, and the World Bank money, which we direct, which is the bigger failure. In Russia and in Indonesia and wherever the IMF philosophy has gone, it has had failure and corruption and misery for the people in its wake. That's the failure of our foreign policy that is most critical.
As far as Russia is concerned, they have had always, since the death of Stalin, there's been a connection between power and property because you don't have real property rights. It's only accelerated with all the money that we have driven in there in the last seven years.
MR. MCLAUGHLIN: How long has the administration known about this top-level Russian corruption? And I would say it's more than mobsters; it's the Ph.D.s over there, it's the whole elite kleptocracy that is involved in this.
MR. BARONE: It's the old KGB people, too, John. The fact is that in '93, 94, we had these huge privatizations in Russia, Anatoly Chubais has been close to. They were thefts, and they were not like the Czech Republic privatizations, where everybody had a chance to get something. They were put-up jobs for certain of these oligarchs that have had a lot of money. But the fact is, I have a certain sympathy with the Clinton administration here. We have to deal with whoever the leaders of Russia are at a given time, even with the knowledge that they may be corrupt, because it is a country that has a significant military potential. And there are no easy answers. The '96 election, did you want Gennadi Zyuganov, the Communist, to get in?
MS. CLIFT: And first of all, John --
MR. BARONE: I don't think so.
MR. MCLAUGHLIN: Did Clinton and did Gore ignore evidence that Russia was sending money to the Riviera and, as I discovered in a recent visit to Austria, putting up homes in Austria, moving their families there in case the roof fell in in Russia?
MS. CLIFT: Well, first of all, John --
MR. MCLAUGHLIN: Did they know that this money was being so incredibly criminally misused?
MS. CLIFT: Well, first of all, John, if you have discovered IMF money, as part of this money-laundering scheme, you had better call the FBI because they haven't uncovered that yet. That is an assertion by critics of the policy; that has not been proved.
Secondly, the FBI does not brief the administration, nor should it, on an ongoing criminal investigation, which is what the money-laundering scheme is. So, no, the administration didn't know.
MR. BLANKLEY: Look --
MS. CLIFT: Third, we don't turn our backs on corrupt governments in Mexico or Italy or --
MR. MCLAUGHLIN: Quickly.
MS. CLIFT: -- lots of other places. Russia is bigger than this.
MR. BLANKLEY: -- it has already come out that there have been briefings to people in the national-security staff about this earlier. The question is, was that information put up the ladder or not? We don't know yet.
MR. MCLAUGHLIN: Exit: Is the activity of Russian mobsters and official corruption in Russia, so wide and deep that it cannot be reversed over the next 10 years? Michael Barone.
MR. BARONE: I would say no. I think there is some possibility.
MR. MCLAUGHLIN: What do you think?
MS. CLIFT: Russia is like Chicago in the '30s. We got over it here; they'll get over it, too. (Laughs.)
MR. MCLAUGHLIN: What do you think?
MR. BLANKLEY: It can be got over, but not anytime soon. The oligarchies are still strong.
MR. CARNEY: Look at Russia 10 years ago; look at it now. That's how much change you can get in 10 years.
MR. MCLAUGHLIN: This all started in the '70s. Read Handelsman (sp). The answer is, no, it cannot be reversed.
MR. CARNEY: It was a Soviet state 10 years ago, John.
MR. MCLAUGHLIN: It's a terrifying situation.
Issue three: Freeing the FALNs.
PRESIDENT CLINTON: (From videotape.) My judgment was that these people should be offered a conditional clemency for two reasons: One -- even though they belonged to an organization, which had espoused violent means, none of them were convicted of doing any bodily harm to anyone. And two, they had all served sentences that were considerably longer than they would serve under the sentencing guidelines, which control federal sentencing, now.
MR. MCLAUGHLIN: These people, who were offered presidential conditional pardon, are 16 members of a Puerto Rican terrorist group known as the FALN. Their goal is independence for Puerto Rico, and whatever it takes is okay.
Throughout the '70s and early '80s, the group carried out over 150 acts of terrorism, including deadly bombings and kidnappings, killing at least six and injuring over 70.
Last month, President Clinton exercised his constitutional right and pardoned these criminals. His actions set off a political firestorm with outcries from law enforcement officials and the New York citizenry, generally. In Washington, Congress voted 95-2 in the Senate and 311-41 in the House, overwhelmingly condemning the president's action.
This coming Tuesday the House will begin hearings on Clinton's clemency action. The Senate has already started theirs in the Judiciary Committee, chaired by Orrin Hatch.
SEN. ORRIN HATCH (R-UT): (From videotape.) As chairman of the Senate committee with oversight of the Department of Justice, I have requested copies of all relevant documents, including the Department's memo to the White House.
MR. MCLAUGHLIN: But also on Thursday, Clinton refused to turn over to Congress those key documents related to the clemency offer. He cited -- you guessed it -- executive privilege.
Okay, Mr. Clinton -- question, sir. New York has a million Puerto Rican voters or thereabouts. Did you consult with the prospective New York Democratic Senate candidate, Hillary Rodham Clinton, before you made your controversial offer of clemency to the Puerto Ricans?
PRESIDENT CLINTON: (From videotape.) She didn't know anything about it until -- as far as I know -- until someone from her office called and asked her for a comment, because I did not discuss it with her.
MR. MCLAUGHLIN: Almost out of time. Question: Do you believe Mr. Clinton? Michael.
MR. BARONE: Well, obviously not, John. I mean, the fact is that he claims this thing just came over his desk. He knows the ramifications of the Puerto Rican vote and of the leaders who claim to speak in behalf of the Puerto Ricans.
MR. MCLAUGHLIN: Eleanor?
MS. CLIFT: Jimmy Carter and Bishop Tutu recommended clemency. Having them with you on a human rights question is like having John McCain with you on Vietnam. He's on good legal ground.
MR. MCLAUGHLIN: Do you believe him?
MR. BLANKLEY: Jimmy Carter's wife isn't running for the Senate in New York. (Laughter.) No one bought Bishop Tutu.
MR. BARONE: Well --
MR. BLANKLEY: Nobody believes him. But I think the Republicans should focus on the stupidity of the policy rather than the cravenness of the politics.
MR. CARNEY: Only Eleanor believes him. I sure don't believe him, and they -- Hillary and Bill Clinton talk about everything. They talked about this.
MR. MCLAUGHLIN: Nobody believes him! We'll be right back with predictions.
MR. MCLAUGHLIN: Predictions. Michael, quick.
MR. BARONE: A famous northeast senator will endorse Bill Bradley.
MR. MCLAUGHLIN: Eleanor?
MS. CLIFT: The big winner in the Waco hearings will be Pat Buchanan.
MR. MCLAUGHLIN: Tony?
MR. BLANKLEY: By the end of the investigations of the Russian corruption, there will be some Americans swept up in the dragnet.
MR. MCLAUGHLIN: Jay?
MR. CARNEY: A desperate Al Gore, feeling himself an underdog, starts attacking Bill Bradley.
MR. MCLAUGHLIN: China will take no significant action against Taipei before the March, 2000 presidential elections in Taiwan, six months from now.
Next week, will U.S.-NATO make the Kosovo Liberation Army, the KLA, disarm on schedule?
Blessed Yom Kippur. Bye bye.
®FC¯END REGULAR SEGMENT
PBS SEGMENT FOLLOWS
MR. MCLAUGHLIN: Issue four. Who pays for Floyd? As Hurricane Floyd finished tearing up the Atlantic Coast this week, home and business owners began tearing up their disaster insurance policies in rage. Why? Because the fine print has been altered and the new fine print is critical.
A new kind of deductible based on the value of the property is the proviso. For example, say a $160,000 home undergoes $8,000 in damage. Under an old policy, a homeowner pays the first $1,000, the deducible, then collects the rest, $7,000, from the insurance company. But now, under the new policy, the deductible is 5 percent of the value of the home; 5 percent of a $160,000 home -- namely, $8,000. That $8,000 deductible is paid before any money is collected.
In other words, the owner is paying in this instance the full damage, $8,000, and getting nothing from the insurance company. Remember, this is in addition to premiums for hurricane insurance doubling and tripling over the years.
Of course, the insurance industry has its reasons for the hikes.
STEVEN GOLDSTEIN (Insurance Information Institute): (From videotape.) The reality is, after Andrew it became very clear that we could have a catastrophic disaster that could cost the industry an enormous amount of money.
MR. MCLAUGHLIN: Hurricane Andrew, by the way, in 1992 cost the insurance industry $16 billion in payments. Floyd is expected to price-tag at less than the $3 billion the insurance industry originally estimated.
Question: So which is it? Are insurance companies protecting their financial solvency, or are they exploiting victims of these big storms for huge gains, Eleanor?
MS. CLIFT: Insurance companies are not public utilities; the name of the game is they make money. So they have every right to have done this, and they got the blessing of the state regulators.
Secondly, if people want to build expensive property on the waterfront, with palatial views of the water, they're entitled to do that. But they're going to have eat more of the costs. The rest of us taxpayers shouldn't have to pay for that.
MR. MCLAUGHLIN: What do you think, Anthony?
MR. BLANKLEY: Well --
MR. MCLAUGHLIN: Why do Americans kvetch so much about their insurance payments?
MR. BLANKLEY: Yeah, I agree with Eleanor 100 percent. I once bought a house in a canyon behind Malibu, in high brush-fire area. I paid a high insurance for fire -- premium -- because I knew I was taking a risk. Same with the people who buy in a hurricane path.
MR. MCLAUGHLIN: What was your deductible?
MR. BLANKLEY: I don't remember now. We never had a fire, thank goodness. (Laughter.)
MR. MCLAUGHLIN: But you recovered practically the whole cost of your house. Did your house burn?
MR. BLANKLEY: No, no, it never --
MR. MCLAUGHLIN: Oh, it never burned?
MR. BLANKLEY: I just paid the high premium.
MR. MCLAUGHLIN: So you can do the same thing for hurricanes --
MR. BLANKLEY: I think it's fair.
MR. MCLAUGHLIN: -- if you want to pay that extra premium.
But what do you think?
MR. CARNEY: I think they're right. I think they're both right.
MR. MCLAUGHLIN: Who's right?
MR. CARNEY: Both Tony and Eleanor. But I think there's a problem because you've got all these people building in dangerous areas, in earthquake areas, on hurricane areas, in flood plains. Half of America's got high insurance.
MR. MCLAUGHLIN: Michael, I think everybody's right. Don't you?
MR. BARONE: Well, I agree with them. If you go back to the '92 situation, Hurricane Andrew and a couple of other disasters that hurt that year, really taxed the capacity of the reinsurance industry, and you really had some serious bankruptcies. People should pay for what they get.