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THE MCLAUGHLIN GROUP



HOST: JOHN MCLAUGHLIN



JOINED BY: TONY BLANKLEY,ELEANOR CLIFT,


LAWRENCE KUDLOW, AND CLARENCE PAGE



TAPED: FRIDAY, MARCH 30, 2001


BROADCAST: WEEKEND OF MARCH 31-APRIL 1, 2001



.STX



 


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THIS IS A RUSH TRANSCRIPT.


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MR. MCLAUGHLIN: Issue one: McCain's triumph.



SEN. JOHN MCCAIN (R-AZ): (From videotape.) We are confident that we have a significant number of Republicans and Democrats in the House of Representatives that would like to move forward with this legislation. So we look forward to it, but we don't think it's going to be a day at the beach.



MR. MCLAUGHLIN: It was a huge win for John McCain, and a testament to the senator's tenacity of purpose and sense of mission. McCain is a survivor and a formidable political figure. And it sends a clear message to George W. Bush, which, by the way, he has already gotten and in fact parried, as we see here.



PRESIDENT GEORGE W. BUSH: (From videotape.) As I said, I look forward to signing a bill that makes the process better. Sometimes in the -- sometimes the legislators will say, "Oh, don't worry; we've got the president." I'm not sure exactly what that means, except if a bill -- if a bill that improves the system makes it to my desk, I'll be inclined to sign it.



MR. MCLAUGHLIN: By a vote of 57 to 43, the Senate cleared the last major hurdle and now stands poised to vote up or down on far-reaching campaign finance reform on Monday.



Key factors of McCain-Feingold:



One, soft money. The bill bans unlimited and unregulated contributions by corporations, unions, and individuals to political parties.



Two, hard money. The bill doubles the amount of regulated contributions an individual can make directly to a candidate, from $1,000 to $2,000 a year. Total contributions to parties and candidates are capped at $37,500 a year. The $2,000 figure and the 37,5(00) figure are both indexed to inflation.



Three, issue advertising. The bill now bans issue advertising by all corporations, unions, and -- thanks to Democratic Senator Paul Wellstone from Minnesota -- special-interest groups. It kicks in 60 days before an election. Analysts from both parties agree that this provision is not only sweeping but unconstitutional.



Question: Does this legislation have unstoppable momentum going into the House, Lawrence Kudlow?



MR. KUDLOW: Well, yeah, I think it has strong political momentum, and you know, Shays-Meehan has passed in the House. That's always been the House version. I assume they'll amend it accordingly, work out the kinks in conference. So yeah, this is going to pass.



But lookit, I think this issue from day one has always played better in the editorial rooms of Boston and Washington and New York than around the country. And I also think that this really abuses the basic American freedoms to leaflet, to pamphlet, and at the end, in the modern age, to have television and radio. And I believe lawyers will find plenty of ways to get around these restrictions because money is always going to be part of politics and people have a right to express their point of view in this country.



MR. MCLAUGHLIN: Very well stated, wouldn't you a agree, Eleanor?



MS. CLIFT: Yeah, you could still express it to the tune of 2,000 per cycle and you can contribute to PACs. Don't worry. There will be plenty of room for your dollars.



Look, John McCain would be the first one to say this doesn't improve the system to perfection; it makes it marginally better. And there's still a possibility that Tom DeLay, who is an enemy of the bill, will forge an unholy alliance with Democrats in the House. But, as Democrats have figured out, they do worse under this bill than the Republicans do. But the big thing that comes out of this, to me, is that it's John McCain who gets the big legislative triumph so far in this first 100-day period, while President Bush is looking rather passive on a number of issues across the board, especially foreign policy.



MR. MCLAUGHLIN: Is this going to survive conference in its present form, substantially, would you say?



MR. BLANKLEY: Yeah.



MR. MCLAUGHLIN: The Senate version versus the House version, especially with the hammer there, Tom DeLay?



MR. BLANKLEY: Yeah, I think Tom DeLay is going to try to work with Martin Frost, the Democratic congressman who heads the Campaign Committee, to try to block it. I don't think they'll succeed. My guess is --



MR. MCLAUGHLIN: Frost wants to block it?



MR. BLANKLEY: Yeah, because he understands, as the Democratic fund-raiser, that this is going to, you know, probably hurt the Democrats. But --



MR. MCLAUGHLIN: And he's under pressure by the unions, too. The reunions hate this legislation.



MR. BLANKLEY: Yeah, but look. The reality is there's not even going to be a conference report because Shays and Meehan are probably going to try to draft a bill that will either be the exact same as the Senate bill or it will be a bill with a change that the Senate can yield to. So they want to avoid ever going to the conference, but regretfully, because this is a clear violation of our First Amendment rights and, I mean, empowers media to have a stronger voice than politicians and political parties. But nonetheless, it's going to pass, and I suspect strongly the president will sign it.



MR. MCLAUGHLIN: You mean throughout, it's unconstitutional? Is the soft-money ban unconstitutional?



MR. BLANKLEY: Well, I -- whether it's unconstitutional or not, the Congress -- the Constitution said Congress shall make no law prohibiting the freedom of speech and, obviously, the ability to spend money on political parties; the freedom of association, the right to associate freely with people of a common political view and assert your positions, are being violated. So whatever the courts may say, a simple reading of the Constitution shows that this is a violation.



MR. MCLAUGHLIN: One final question for you, Tony, because you're proving to be so brilliant here. Shays-Meehan. You're talking about Chris Shays in Connecticut and --



MR. BLANKLEY: Marty Meehan.



MR. MCLAUGHLIN: Marty Meehan in Massachusetts. Where do they get the power to insert their legislation and command the situation?



MR. BLANKLEY: Well, because a couple of years ago they threatened what's called a "discharge petition," which forces the leadership to let them get their bill before -- they got the votes.



MR. MCLAUGHLIN: And you think that they can execute this?



MR. BLANKLEY: Yeah.



MR. MCLAUGHLIN: How are you, Clarence?



MR. PAGE: You're really excited about that discharge petition. Let me mention that, John.



MR. MCLAUGHLIN: (Laughs.)



MR. PAGE: I know the machinations of government excite you greatly.



MR. MCLAUGHLIN: You want me to move that around? (Laughter.)



MR. PAGE: I think this does have a lot of momentum going into the House, but it's got obviously stumbling blocks, some of which have been mentioned. It's remarkable how many Democrats now see this as a real Trojan horse, because the dirty little secret is that Democrats have benefited from raising more soft money, while the Republicans have benefited from having more of those large, big-ticket, hard-money donors. A ban --



MS. CLIFT: Larry Kudlow's is one.



MR. PAGE: Well, what you call small --



MR. BLANKLEY: Well, one thousand is the maximum -- has been the maximum hard-dollar contribution.



MR. PAGE: What you call small, but which Democratic contributors call $1,000 a lot a money. The Republicans have a lot more of those kind of hard-money contributors and now you're going to raise that limit while killing soft money. No wonder the AFL-CIO hates it. Also the freedom of the press thing is, you're right -- freedom of press, freedom of speech -- were you to try to --



MR. KUDLOW: Yes! Yes!



MR. BLANKLEY: And freedom of association.



MR. PAGE: -- get in the way of the -- (inaudible word) -- media this way than they do -- (inaudible).



(Cross talk.)



MR. MCLAUGHLIN: Quickly!



MR. KUDLOW: This bill stomps out minority rights.



MR. PAGE: Yes, it does.



MR. KUDLOW: In this case, it's the minority of some well-to-do people who --



MS. CLIFT: That's all right.



MR. PAGE: However -- however, there is a caveat here. The courts have said if there is a sense of corruption --



MR. KUDLOW: In this country --



MR. PAGE: -- then you can restrict speech. I think they're going to have a hard time proving that --



MR. KUDLOW: This country spends more on Starbucks coffee than campaign finance, and John, I don't --



MR. MCLAUGHLIN: Well, also -- (Cross talk.)



MR. PAGE: Starbucks coffee is more important. (Laughter.)



MR. MCLAUGHLIN: Exit question. Assuming that McCain-Feingold passes the Congress substantially in its present form, will the Supreme Court take action against it?



MR. KUDLOW: Oh, I think they absolutely will. They're going to strike it down. And I don't know --



MR. MCLAUGHLIN: You mean in toto.



MR. KUDLOW: Well, I don't know. They might take a piece of it. But eventually they'll strike it down.



MR. MCLAUGHLIN: If they take a piece, will the rest remain?



MR. KUDLOW: Yeah, legally it will remain in place, but constitutionally it's going to be struck down at some point.



MR. MCLAUGHLIN: You think so.



MR. KUDLOW: Absolutely.



MS. CLIFT: I --



MR. MCLAUGHLIN: I'm going to change my question for you. If it comes out of the House in substantially the form it's in now, will Bush sign it?



MS. CLIFT: I think Bush is boxed in and he doesn't want to be seen as the enemy of reform. He's hoping that the bill doesn't get to him. But I think now he's going to sign it.



MR. MCLAUGHLIN: If he's boxed in, he's in an upholstered box. You know why? Because they raised the hard money from $1,000 per head to $2,000 per head. That's all he needs.



MR. BLANKLEY: Yeah. I mean, putting aside the principles, Bush is in a great -- the Republican Party is in a great position because it benefits them. Yeah, I think he'll sign it. I don't think the Supreme Court's going to hold all of it unconstitutional. They'll certainly hold the restriction on issue advertising unconstitutional; the soft-money question is up for grabs.



MR. MCLAUGHLIN: Since the soft money gained by the Democrats this year, about $250 million, was comparable to the soft money raised by the Republicans, did Bush put them in panic by saying, "Hey, I'm open to signing this"?



MR. BLANKLEY: He certainly upset them a lot. But they were so deep into the box, they couldn't get out of it themselves.



MR. MCLAUGHLIN: Is there no way they can wriggle out of this now, the Democrats? Should they protest?



MR. PAGE: They could wriggle out of it in terms of using certain procedural parliamentary methods. But since they aren't in charge now, it becomes more difficult. When Foley was in charge, they were able to wriggle out from under anything.



MR. MCLAUGHLIN: What about saying that the raising of the hard money from $1,000 to $2,000 makes this insupportable for us? Can they dredge any kind of a cover for voting against it? I'm talking about the Democrats in the House.



MR. KUDLOW: Yes.



MS. CLIFT: No.



MR. KUDLOW: The Democrats should absolutely take a freedom position and raise the --



MR. BLANKLEY: Yeah, but they're not --



MR. KUDLOW: -- individual contributions to about $50,000 --



MR. BLANKLEY: But they're not going --



MR. KUDLOW: -- and then say, as they do in the state of Virginia, where it's virtually unlimited --



MR. BLANKLEY: And cut taxes --



MR. KUDLOW: -- that as long as they put it on the Internet and disclose, it's fine.



MS. CLIFT: You know --



MR. MCLAUGHLIN: Wait just a moment, Eleanor. I want to ask a question. The question is this: Are any of you taking a kind of perverse satisfaction, a perverse gratification, a kind of a "delectatio morosa," as the theologians say, in the fact that Democrats for years have been screaming that they favor campaign finance reform, knowing that the Republicans were going to kill it? And now, when they're on the block, they're deathly afraid it's going to be enacted.



MR. BLANKLEY: That's been the game for years. Each party knows that the other party's going to block it, push it forward. Now, unfortunately for the Democrats, they've pushed the game and they've lost.



MR. PAGE: They haven't lost yet.



MR. MCLAUGHLIN: All right. Is there something else that ought to be clearly stated here? This whole thing is a charade.



MR. KUDLOW (?): Right.



MR. MCLAUGHLIN: The Republicans don't want it, the Democrats don't want it; the only ones who want it are the true believers, and they are in the great minority. So, what is this, anyway? We are playing games again.



MS. CLIFT: All you have to do is look at how hard various groups have fought against it; and therefore, I believe, it's the right thing to do and it's a good thing to do.



MR. MCLAUGHLIN: I'm not talking about that.



MS. CLIFT: Democrats -- (inaudible) -- as well.



MR. MCLAUGHLIN: I'm saying that in terms of the heart of hearts of the people on Capitol Hill, they know it's a charade. They don't want it.



MS. CLIFT: Well, I'm glad to have representatives who have the nerve to vote for what they think is the national interest --



MR. MCLAUGHLIN: Nerve?



MR. KUDLOW: Nerve?



MS. CLIFT: -- opposed to their own political interest. They should be congratulated.



MR. MCLAUGHLIN: They're scared to death to do otherwise.



MR. PAGE: They are scared, John. They're scared of the fact that this is a very popular idea with the American people.



MS. CLIFT: Yes.



MR. PAGE: McCain -- (inaudible) --



MR. KUDLOW: Oh, no one in the country cares about it.



MR. MCLAUGHLIN: The American people --



MR. KUDLOW: This will be forgotten.



MR. PAGE: -- (inaudible) -- close, but the --



MR. KUDLOW: This will be forgotten the minute the ink is dry.



MR. PAGE: -- John -- Larry, don't speak while I'm talking, Larry. (Laughs.) Okay? Don't speak while I'm thinking, either. The fact is, if this did not have political momentum with the American people right now, we wouldn't even be discussing it. The fact is that McCain has been able to gain mileage precisely because of that.



MR. BLANKLEY: Clarence, it only --



(Cross talk.)



MR. MCLAUGHLIN: Unlike you, the American people treasure their freedom of speech.



MR. KUDLOW: That's right.



MR. PAGE: And McCain -- and we know that here. Right, John? (Chuckles.)



MR. MCLAUGHLIN: When we come back, is it right to give blacks, Hispanics, and Native Americans preference when they apply to college?



MR. PAGE: Especially me.



(Announcements.)



MR. MCLAUGHLIN: Issue two: Hostile takeover.



It was a skittish week in the markets. The NASDAQ continued its fall, hitting a 29-month low. The Dow, on the other hand, was buoyed by encouraging news about consumer confidence and made up some of its substantial losses.



But as for the macroeconomy, President Bush had this to say:



PRESIDENT BUSH: (From videotape.) The American economy is like a great athlete at the end of the first leg of a long, long race: somewhat winded, but fundamentally strong.



MR. MCLAUGHLIN: Bush seems to be right -- fundamentally strong. Unemployment, inflation, interest rates are staying low, and consumer confidence, as noted, up.



Mr. Bush isn't taking any chances, however. He wants voters to know that the current downturn, to the extent that it exists, started before he took office.



PRESIDENT BUSH: (From videotape.) I believe this: I believe I must speak straight with the American people. The American economy began slowing last summer.



MR. MCLAUGHLIN: The president's remedy for the economy is his $1.6 trillion tax cut. But he seems to have lost the offensive. His plan remains too much backloaded, 82 percent of the cuts reserved for after four years from now.



But now is when we need stimulus, so Democrats have seen the vacuum and rushed in to co-opt and lead.



SEN. TOM DASCHLE (D-SD, Senate minority leader): (From videotape.) Every taxpayer, including those who pay only payroll taxes, will receive a check for $300.



Second, we will reduce the 15 percent tax rate, the rate that -- currently paid by all taxpayer, to 10 percent.



MR. MCLAUGHLIN: At week's end, Bush tried to recapture his control and ownership of the issue.



PRESIDENT BUSH: (From videotape.) I appreciate very much what the leadership in the Senate has -- Tom Daschle, for example, talked about immediate tax relief or immediate rebates, plus reducing rates permanently. You just need to reduce more rates than the ones he suggested.



MR. MCLAUGHLIN: Question: Have the Democrats co-opted the tax issue -- a hostile takeover, in other words -- Eleanor Clift?



MS. CLIFT: Well, you know, Bush is roaming around the country, trying to rally support in states that have moderate Democratic senators, but nobody much is paying attention. And the real game is going on on Capitol Hill, where his plan has been unmasked for having no short-term impact on the economy. People -- the stock market has really, I think, affected people's confidence in whether these surpluses will ever materialize. And the Democrats have now advanced a very rational short-term plan, which Bush wants to hold hostage to get his tax cuts for people down the road. And the public has figured out that the rich get most of the benefits. And so I think that his tax plan is really in trouble.



MR. MCLAUGHLIN: In Canada a few months ago, the Canadians gave out $200 per person because they had a surplus. And Daschle is proposing $300 in rebate to everybody. Is that a good idea? I ask you, Larry.



MR. KUDLOW: It's not a good idea, for a number of reasons, most importantly (sic) of which is, this is not a consumer-led recession. This is an investment- and production-led downturn, which has been inflicted by the plunge of the stock market.



And my own view is that Bush must announce a shock therapy plan immediately, which will bolster investment spirits. Number one, he should move to a lower capital gains tax. Number two --



MR. MCLAUGHLIN: Is that your idea or Jack Kemp's idea?



MR. KUDLOW: It's my idea. And number two, he should accelerate the income tax rate reductions. And number three, he has got to have a powwow with the Federal Reserve, so that they inject more cash into this economy. Shock therapy is the only thing that's going to stop this market plunge.



MR. MCLAUGHLIN: All right. I have this question. As I recall the bill of Bush, he wants to reduce the marginal rates' top 39.6 (percent) to 33 (percent), but he wants to reduce that one point per year at a time, right?



MR. KUDLOW: Over five years.



MR. MCLAUGHLIN: Over five years. Now would you tell me whether or not you couldn't sacrifice that, number one? Number two -- we'd like to see it, but couldn't you sacrifice it, number one? Number two, couldn't he give it away without losing very much?



MR. KUDLOW: No, I --



MR. MCLAUGHLIN: What does one point a year mean for earners like you, in terms of your willingness and incentive to make an investment?



MR. KUDLOW: I made this point on this show several weeks ago, exactly this point. You cannot stagger it five years. It has no credibility.



Look, remember this -- remember this --



MR. MCLAUGHLIN: Oh, you want him to have it, but have it all at once and bring it back to January?



MR. KUDLOW: As soon as possible. We have had a $5 trillion deflation of American capital and wealth through the market plunge, and therefore tax rates on capital and tax costs on capital have got to be reduced.



MR. BLANKLEY: Let's go back for a moment to the question, which was, has Bush lost control of the tax bill? I don't think he has. The House has been moving Bush's tax bill with great alacrity.



MS. CLIFT: The House is irrelevant, Tony, and you know it. (Laughs.)



MR. BLANKLEY: No, of course it's not irrelevant.



MS. CLIFT: It's not where the game is.



MR. MCLAUGHLIN: Why does it --



MR. BLANKLEY: And it's going to -- the game is going to be in the conference -- the game -- the game --



MS. CLIFT: It's as relevant as the Gingrich passages were in your day.



MR. BLANKLEY: We passed welfare reform. We balanced the budget. We ended --



MR. KUDLOW: Cut the capital gains tax.



MR. BLANKLEY: Yes.



MS. CLIFT: Most of what you did died in the Senate. (Laughter.)



MR. BLANKLEY: Now -- no, it didn't. Eighty percent of it passed, number one. Clinton, your president, signed it.



But to go back to the present, the fact is that Bush is going to have basically his bill in the conference report, whatever the Senate does. The polling data now is showing -- the most recent poll I saw -- that the majority of the country is in favor of it.



MR. KUDLOW: Yes.



MR. BLANKLEY: They consider it a major issue.



MR. KUDLOW: Yeah.



MR. BLANKLEY: This was not an issue that was even on the map until Bush started talking about it.



MR. MCLAUGHLIN: What's the question?



MR. BLANKLEY: And I think, although he lost a couple of weeks of control of the message, I think he's back on it, and it's in pretty good --



MR. MCLAUGHLIN: Don't you think it's time for Cheney to get the senators in one room and talk straight to them and tell them, "No White House access, no White House dinners, no White House support in your next campaign; in fact, the White House will run in favor of your challengers, helping them in their campaigns, if you don't get on board this"?



MR. PAGE: You mean Co-President Cheney ought to bring the hammer down here?



MR. KUDLOW: No soft money! No campaign --



MR. MCLAUGHLIN: No soft money, nothing.



Huh? Don't you think he's got --



MR. PAGE: You mean Co-President Cheney ought to bring the hammer down here.



I think that if Bush had a problem with his message --



MR. MCLAUGHLIN: No, because it's his role.



MR. PAGE: If Bush had a problem with his message here, it was not so much in that the tax cut benefits the rich, although that did have some salience; it was the fact that it's backloaded, that you're not going to have much benefit in the first five years.



MR. KUDLOW: He's right. You're right. Right. Quite right. Right.



MR. PAGE: Folks have really picked up on that, and that's where the Democrats are seizing the issue.



MR. MCLAUGHLIN: We're running late. I want a one-word answer at the exit question. Is it too late for Bush to regain control of the tax issue? One word!



MR. KUDLOW: No. No.



MR. MCLAUGHLIN: Eleanor?



MS. CLIFT: No, he's -- (chuckles) --



MR. BLANKLEY: No. (Chuckles.)



MR. PAGE: No.



MR. MCLAUGHLIN: The answer is no. (Laughter.)



Issue three: Politics and race.



Michigan may be a winner on the football field, but they were no winner in federal court this week. The U of M Law School was dealt a stunning blow when U.S. District Judge Bernard Friedman ruled that the law school violated the Constitution, the equal protection clause, when whites were discriminated against by unspoken preferential admissions quotas favoring non-white students. The judge cited, quote, unquote, "irrefutable" statistical evidence that black, Hispanic, and Native American candidates were 100 times more likely to be admitted than a white student with equal grades and equal LSAT scores.



Even at the federal district court level, Friedman's ruling may have wide reach.



TERRY PELL (Center for Individual Rights): (From videotape.) This victory for us today sends a very strong signal to the higher education community that they can no longer judge applicants by the color of their skin; rather, they have to look at them as individuals.



MR. MCLAUGHLIN: The university will appeal, and that may force the U.S. Supreme Court to take up the issue. Twenty-three years ago, the high court ruled, five to four, in University of California v. Bakke, that race could be a factor in admissions, but not quotas. Incidentally, every one of the five Supreme Court justices who voted for affirmative action in the Bakke case has now left the court.



Well, what do you think of the disposition of this case by Judge Friedman?



MR. PAGE: Well, it wasn't a big surprise in legal circles because they figured he was going to lean toward the conservative end. But this decision --



MR. MCLAUGHLIN: Why? Why?



MR. PAGE: Well, this decision refutes Bakke, really. The Supreme Court decided Bakke -- in Bakke --



MR. MCLAUGHLIN: No, no, no. Bakke was talking about race. This -- (inaudible) -- quotas.



MR. PAGE: The important thing here is not quotas. Bakke said you can take race into account but it cannot be the decisive factor. Michigan argued that they were taking a lot of factors into account. And indeed, there were a number of white students who scored less but still got in -- scored lower than the plaintiffs in this case and still got in. The judge singled out race, just as the appellate court did in Texas. The important thing here is, John, this is going to the Supreme Court now, and it's got --



MR. MCLAUGHLIN: We don't know that. We don't know that.



MR. PAGE: It's going to head that way and this debate's going to end up in the Supreme Court, where it's going to be very close. There's a possibility Bakke could be overturned.



MR. MCLAUGHLIN: If it goes to the Supreme Court, do you think the Justice Department or that John Ashcroft will file an amicus brief on the side of equal opportunity, meaning pro-white?



MR. KUDLOW: Yes.



MR. PAGE: Meaning anti-affirmative action?



MR. KUDLOW: Yes.



MR. MCLAUGHLIN: Yes.



MR. PAGE: Yeah. Well, Ashcroft's record certainly shows he's going to be anti-affirmative action.



MR. KUDLOW: And with good reason.



MR. MCLAUGHLIN: Can you imagine the political impact of that if he does that?



MR. PAGE: I can easily imagine the political impact because it will be a big surprise -- (inaudible).



MR. MCLAUGHLIN: I've got -- there's a point I want to make here. There's a point I want to make here. The argument that the university made to defend their preferences is that they wanted diversity, not that they wanted to correct the social abuse of the past. They feel that the educational environment is optimized if you have a diversity of races.



MR. KUDLOW: It's a flawed -- it's a fundamentally flawed argument, for this very simple reason. You can still reach out and affirmatively recruit. You can teach. You can give them help during the summer to bring them up to speed.



MR. BLANKLEY: Yeah, but --



MR. MCLAUGHLIN: Quickly!



MR. KUDLOW: Let me finish my point.



MR. BLANKLEY: But the problem is --



MR. KUDLOW: But that's much different than racial quotas.



MR. BLANKLEY: The problem is that that kind of outreach has not got the kind of entry of blacks and Hispanics in schools that they want.



MR. PAGE: Right.



MR. BLANKLEY: And so the interests of diversity can't be accomplished without quotas. Thus you have this conflict of values between color-blindness and diversity, and it's going to go to the Supreme Court.



MS. CLIFT: Well, Judge Friedman --



MR. MCLAUGHLIN; First of all, if they want diversity, if they want diversity --



MS. CLIFT: Judge Friedman suggested reaching out, doing better educating younger kids, also suggested maybe the children of alumni shouldn't get advantage.



MR. KUDLOW: You can tutor, you can mentor --



MR. BLANKLEY: That's not a race-based issue.



MS. CLIFT: I'd like to --



MR. KUDLOW: -- you can reach out --



MS. CLIFT: It's discrimination. They discriminate --



MR. KUDLOW: -- but racial quotas is fundamentally unconstitutional.



MR. MCLAUGHLIN: If we want diversity, why don't we reach out according to socioeconomic level and get some poor people in there of all races, and middle-class people, who are now effectively shut out?



(Cross talk.)



MR. MCLAUGHLIN: We have to leave, but before we leave, I want to point out that this week Washington said good-bye to one of its great journalists, Rowlie Evans. He stood at the top of his craft. Not only journalists, but also Washington will miss him deeply. Our heartfelt sympathy to his wife, Kay, and his children, Sarah (sp) and Rowland, Junior.



We'll be right back with predictions.



(Announcements.)



MR. MCLAUGHLIN: Predictions. Lawrence?



MR. KUDLOW: George Bush's tax-cutting budget will pass the Senate.



MR. MCLAUGHLIN: Eleanor?



MS. CLIFT: Congress will appropriate more money to defuse land mines around the world, thanks to lobbying by Queen Noor.



MR. MCLAUGHLIN: Tony?



MR. BLANKLEY: President Bush has decided, although he hasn't yet announced, that he will deny sale of Aegis class destroyers to Taiwan.



MR. PAGE: The environment is going to be Bush's gays-in-the-military setback.



MR. MCLAUGHLIN: The hunt for loopholes in the new campaign finance bill will be so successful that reform will be practically neutralized.



Bye bye!



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PBS SEGMENT



MR. MCLAUGHLIN: Issue four: Kyoto sayonara.



PRESIDENT GEORGE W. BUSH: (From videotape.) We'll be working with our allies to reduce greenhouse gases, but I will not accept a plan that will harm our economy and hurt American workers.



MR. MCLAUGHLIN: So, the White House will not support the international treaty to reduce greenhouse gases, like carbon dioxide emissions, that are said to cause global warming. The treaty was negotiated in 1997 in Kyoto, Japan, four years ago. It requires the U.S. to cut greenhouse gases by approximately one-third before 2012. That's 10 years from now. The Bush administration says the treaty is flawed, as is demonstrated, they say, by its failure to gain acceptance.



CHRISTINE TODD WHITMAN (administrator of the Environmental Protection Agency): (From videotape.) There isn't a single industrialized country in the world that has endorsed that particular treaty.



MR. MCLAUGHLIN: Not only Bush, but also the U.S. Senate, dislikes Kyoto. In 1997, the Senate voted 95 to zero against it. Notwithstanding this, Democrats are now apoplectic. But Bush's EPA administrator, Christie Whitman, sounds ecstatic.



SEN. CHARLES SCHUMER (D-NY): (From videotape.) We are not going to stand for the Bush administration's latest assaults on our environment.



SEN. BARBARA BOXER (D-CA): (From videotape.) We believe that George W. Bush has declared war on the environment.



MS. WHITMAN: (From videotape.) But mostly, the administration is going to surprise everybody with how much we're -- how much progress we're going to make.



MR. MCLAUGHLIN: Question. Bush is saying that on merits, Kyoto is fatally flawed. Will the public buy that over the environmentalists' criticism, and is Bush right on merits? Is it fatally flawed?



MS. CLIFT: Are you directing that to me?



MR. MCLAUGHLIN: Eleanor. (Chuckles.)



MS. CLIFT: Well, no industrialized country has ratified the treaty because it is too hard to achieve, but there is a whole Kyoto process in place, and to pull out of that treaty without having any kind of program in place really hits hard at American credibility internationally, among our allies, and that's the argument that Christie Whitman made to the president. And if you can do it to a woman, he's emasculated her in terms of how she is going to do this job. And it looks as though he's done it as a payoff to industry --



MR. MCLAUGHLIN: You mean --



MR. KUDLOW: No, no.



MR. BLANKLEY: No.



MR. MCLAUGHLIN: You mean this is like the new arsenic standards. Is that what you mean, Eleanor? (Laughter.)



MS. CLIFT: Yeah. It's great issues for Democrats --



MR. BLANKLEY: It's not -- it has nothing --



MS. CLIFT: -- because it confirms the worst stereotyping by the Republicans.



(Cross talk.)



MR. MCLAUGHLIN: What is Eleanor forgetting? What is she forgetting?



MR. KUDLOW: Well, Eleanor is forgetting the economy. That's the crucial point here.



MR. MCLAUGHLIN: And what is that?



MR. KUDLOW: We have just had -- look, the world is --



MR. MCLAUGHLIN: Well, what is -- what's the word that Bush used?



MR. KUDLOW: A slump. The world is in a slump.



MR. MCLAUGHLIN: No, no, that's not the word Bush is using. "Crisis."



MR. KUDLOW: Oh, a crisis.



MR. MCLAUGHLIN: Crisis, not economy; crisis in energy. Is it a crisis when you don't have electricity in an operating room in a hospital in California?



MR. KUDLOW: Yes, yes, yes.



MR. MCLAUGHLIN: It's a crisis.



MR. KUDLOW: Yes.



MR. MCLAUGHLIN: Could that energy --



(Cross talk.)



MS. CLIFT: It doesn't have anything to do with the CO2.



MR. MCLAUGHLIN: When you have a crisis, you have a new set of laws.



MS. CLIFT: It has nothing to do with the CO2. And in fact, Al Gore, if we can dare mention his name, actually had a viable plan, an emissions trading system, where you sort of buy the right to pollute, and then you gradually reduce the pollutants in the air. Bush --



(Cross talk.)



MR. MCLAUGHLIN: Why didn't you bring up the -- why didn't you bring the Gore plan up on this program to help the administration out?



MR. BLANKLEY: I hadn't reread it recently, unfortunately. But look, the basic problem is that the cost of manufacturing, because -- based on energy, would go up so much, we'd lose millions of jobs.



MR. MCLAUGHLIN: Right.



MR. BLANKLEY: And in fact, we -- rejecting the treaty doesn't mean you're rejecting dealing with the problem. And --



MR. PAGE: That's right. That's right. This only begins the process.



MR. BLANKLEY: And every single Democratic senator --



MR. MCLAUGHLIN: Do you favor drilling in ANWR?



MR. PAGE: ANWR isn't the issue.



MR. MCLAUGHLIN: Would you favor drilling in ANWR?



MR. PAGE: ANWR's not the issue in Kyoto. Kyoto is a good political issue for Democrats because most Republicans call themselves strong environmentalists.



But Tony's right that this is only the beginning of a process.



MR. MCLAUGHLIN: You don't think --



MR. PAGE: They can come back to the table with a better treaty that will have the kind of incentives that Al Gore was suggesting --



MR. MCLAUGHLIN: You don't think --



MR. PAGE: -- and that's the kind of plan that's going to work.



MR. MCLAUGHLIN: You don't think the Greens is a fading snapshot on the American scene, the Greenism and environmentalism?



(Cross talk.)



MR. PAGE: I'm wondering where it went. I'm wondering where Al Gore is right now. In fact, the very fact that he hasn't spoken out right now is indicative of -- Al Gore probably is going to come back in a few years.



MR. MCLAUGHLIN: You don't think that crisis has taken over?



MR. KUDLOW: There's a worldwide economic slump going on. There's a worldwide stock market slump. So --



MR. MCLAUGHLIN: That's crisis, and you get a new set of principles, right?



MR. KUDLOW: Right.



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