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MR. MCLAUGHLIN: Issue one: Dealing with the dragon.

A routine mission by a high-tech Navy reconnaissance plane exploded into headlines on Saturday, March 31. The lumbering turboprop collided with a Chinese fighter jet over the South China Sea. The Chinese plane and its pilot went into the ocean, and the Navy plane and its crew of 24 limped to the ground on a Chinese air base.

Beijing violated treaties and international law, first by detaining the U.S. service members and refusing to allow appropriate visits from government representatives, secondly by boarding the sovereign aircraft and removing some or all of its equipment.

In the meantime, those who oppose U.S. trade with China seized their opening, namely, cancel PNTR. Congress last year approved and President Clinton signed PNTR, permanent normal trade relations status, for China, but it is by no means a done deal. The law that passed last year requires China to become a member of the World Trade Organization before the new status becomes effective, and that had been expected to happen by this coming June, but China has resisted some of the WTO's key requirements and won't make the June date. That means China's trade status is up for a U.S. Congress vote again this summer, with a new president, a very different Congress, and a lot of negative provocation.

The Bush administration and much of the business community, however, are not necessarily singing along with that song.

PRESIDENT GEORGE W. BUSH: (From videotape.) I believe that China ought to be a trading partner of ours. I think it's in our economic interests to open up the Chinese markets to U.S. products.

MR. MCLAUGHLIN: Question: How badly has China set back its own cause to gain wide acceptance in the international community? And you heard what the president just said. He wants trade relations with China. Pat Buchanan -- by the way, welcome back, Pat.

MR. BUCHANAN: Thank you, John.

MR. MCLAUGHLIN: Haven't been many sightings of you lately.

MR. BUCHANAN: Yes, I've been in my Howard Hughes phase, John. (Laughter.)

MR. MCLAUGHLIN: You haven't been down to Palm Beach to visit your seniors down there who are so fond of you? (Laughter.)

MR. BUCHANAN: (Laughs.) We're thinking of running for mayor after I saw the numbers. (Laughs.)

MR. MCLAUGHLIN: Did you bump into Theresa LaPore and thank her for that butterfly ballot? (Laughter.)

MR. BUCHANAN: (Laughs.) Collector's item.

Let me tell --

MR. MCLAUGHLIN: You know everybody here. You know Eleanor. You know Tony.

MR. BUCHANAN: I know the folks. I recognize some of the people.

MR. MCLAUGHLIN: You know Lawrence O'Donnell.


MR. MCLAUGHLIN: He's the creator and the producer of "West Wing" --

MR. BUCHANAN: "West Wing," yes.

MR. O'DONNELL: Writer. Just a writer, not the --

MR. BUCHANAN: Tony (sic) Ziegler is based on Pat Buchanan in the Reagan White House. (Laughter.)

Let me talk about China briefly, John. What's happened here is the Chinese have intercepted an American plane, forced it down, stripped it, held our people hostage, and then demand an apology from the United States. And Mr. Powell has virtually said we regret it, and Mr. Bush says we ought to pray for the soul -- repose of the soul of the pilot. This is a defeat for the United States. Every day this went on it was a humiliation for the United States of America. Instead of offering an apology, we should have demanded one. And I think the United States and its prestige have been seriously damaged in Asia.

As for China, they have behaved in a Cold War fashion and got the United States to bend to their will. It is an unmitigated defeat for Mr. Bush.

MR. MCLAUGHLIN: I think that sums it up, doesn't it, Eleanor?

MS. CLIFT: Pat, as usual, floats like a butterfly, sings like a bee. Look. President Bush is tamping down the kind of rhetoric you just heard from Pat Buchanan, who represents, I guess, maybe a feather of the Republican Party. It's no longer a wing, Pat.

And the stakes in this confrontation are huge for China. They have 54,000 students in this country. They want to get the Olympics. They want to keep trade going. And the stakes for this country are also huge. We don't want to create an enemy where there is none. And China today is a very different country. You're not going to get students in the streets protesting for democracy. They think their leadership is too soft. So I think most leaders in both parties are giving China the grace period to resolve this, and I think there is an expectation on both sides that it's going to be resolved peaceably.

MR. MCLAUGHLIN: How badly has China set back its course to win wide acceptance in the international community? Can you try that question, Tony?

MR. BLANKLEY: Yeah. Yeah. I think that a month from now, this will be a largely forgotten or diminished issue. It's playing out, I think, pretty well, resolved pretty well so far. And I think that it seems like a big deal this week, but soon it won't. In fact, I believe there's a lot of pressure in both parties to move forward with trade. It will be a hard fight, but there's a coalition, I think a winning coalition, to maintain trade relations.

MR. MCLAUGHLIN: Do you think the dominant part of the international community assigns the rap to Bush or to the Chinese? To the Americans or to the Chinese?

MR. BLANKLEY: Well, they ought to, obviously, blame the Chinese; there's no question about that. Bush is getting overwhelming polling numbers in the United States in support of his handling of this affair.

MR. MCLAUGHLIN: Can you handle that last question? Where do you think the international community is, especially the Third World?

MR. O'DONNELL: The international community is very sympathetic to the Chinese. They're wondering what are we doing with this reflexive old Cold War mentality of flying these missions in the first place. And they're right. There's absolutely no reason for it. Everything you need to know about China you can find out within a couple of hours of getting off the plane there and just -- it's a very free country to travel around. We have satellites to pick up all the other stuff we need.

MR. BLANKLEY: The reason -- no, they don't. The satellites --

MR. O'DONNELL: This is a crazy --

MR. BLANKLEY: No, that's --

MR. MCLAUGHLIN: Let him finish, Tony.

MR. O'DONNELL: It's a stupid risk.

MR. BLANKLEY: It's not.

MR. O'DONNELL: It yields very little and puts us in -- (inaudible) -- standoff we don't need.

MR. BLANKLEY: Let me explain. Let me explain. The satellites can't pick up any radar signals. The spy plane --

MR. O'DONNELL: We don't need them. We're not at war with this country.

MR. BLANKLEY: The Chinese just came into possession of new Soviet naval craft, and they're building up down there across from Taiwan, and we did need that information.

MR. MCLAUGHLIN: I have a question. The question is: We have various sources of leverage against the Chinese to show them our disapproval as a consequences of these events. One, we can deny them PNTR. That would be, of course, a congressional decision. The president could also decline to visit with them on October the 20th, when he's scheduled now tentatively to go from Shanghai to Beijing. He'll go to Shanghai anyway, it would seem.


MR. MCLAUGHLIN: Thirdly, we can -- not disrupt, but we might be able to slow down their entry into the World Trade Organization.

MR. BUCHANAN: What the United States should do, John, is pull the ambassador home right now. The president of the United States should say, "I understand why Americans are boycotting Chinese goods, and I believe that if this thing is not resolved satisfactorily, it will be time to suspend PNTR for exactly one year." It is the Communist Chinese who are behaving as a Cold War power right now. We were in international airspace, and this character almost crashed and killed 24 Americans. If Slobodan Milosevic had brought that plane down, stripped it, put these people in prison, the United States would be bombing Belgrade. I don't think we should bomb Beijing, but we should behave like a great power.

MS. CLIFT: Pat, as a student at --

MR. BUCHANAN: I'll just remind you of one thing. Eisenhower refused to apologize for the U-2, and even blew up a summit, and we were a lot more at fault then.

MS. CLIFT: Nobody is recommending that President Bush apologize. But you are a student of history, and you surely understand that there is a succession struggle going on in China. And if we were to react as you are advising this country react, we would bolster the hard-liners over there, Pat, to our eventual detriment.

MR. BUCHANAN: There's going to be a succession struggle in this country if he doesn't behave better.


MR. MCLAUGHLIN: Exit question: After these events, can we partner with China on trade and business, Pat Buchanan?

MR. BUCHANAN: I'm afraid we will, just as Tony says, because these people are in the back pocket of big business.

MR. MCLAUGHLIN: Can we, Eleanor?

MS. CLIFT: Yes, and President Bush is his father's son on this issue, thankfully so.

MR. MCLAUGHLIN: What do you think, Tony?

MR. BLANKLEY: Yeah, I think it's virtually inevitable, unless the Chinese behave even more foolishly than they have.

MR. O'DONNELL: We can and will partner with them, because the power of capitalism is our most important weapon, if you want to call it that, in making the Chinese most resemble us. You sell them more Levis, more Coca-Cola, and they're going to look more like us economically every day.

MR. BUCHANAN: Larry, Larry, why do they not look more like us after 10 years and 400 billion in trade surpluses?

MR. O'DONNELL: Because it's only 10 years. Give them another 30.

MR. MCLAUGHLIN: You want to tell Lawrence with which country we have our largest trade deficit?

MR. BUCHANAN: You have an $85 billion trade deficit --

MR. MCLAUGHLIN: With whom?

MR. BUCHANAN: -- with China. We gave them their --

MR. MCLAUGHLIN: Bigger than what?

MR. BUCHANAN: Bigger than Japan.

MR. MCLAUGHLIN: Bigger than Japan.

You are all correct.

MR. O'DONNELL: That's because we like buying their goods. We're buying their goods for the United States Army. The black berets that we're going to use -- they're going to be made in China.

MR. BLANKLEY: Yeah, Monica's berets, right?

MR. MCLAUGHLIN: Six hundred and eighteen thousand black berets will be worn by Army troops, U.S. Army troops -- made in China.

MS. CLIFT: Actually --

MR. MCLAUGHLIN: They're wearing Chinese berets.

MR. O'DONNELL: (Laughs.)

MS. CLIFT: Actually --

MR. MCLAUGHLIN: What do you think of that, Pat?

MR. BUCHANAN: Well, I think it's -- look, this is not the country it used to be.

MR. MCLAUGHLIN: That sums it up.


MS. CLIFT: Well, I think it was your president, your past employer, who opened the door for us to China. Surely you didn't agree -- disagree with President Nixon.

MR. BUCHANAN: On China trip -- I dissented on that trip. (Laughter.)

MR. MCLAUGHLIN: When we come back, Barbra Streisand's sour note.


MR. MCLAUGHLIN: Issue two: United States of the Americas.

PRESIDENT BUSH: (From videotape.) Good relations in our neighborhood is not going to be an afterthought for our foreign policy in America. And the best foreign policy starts with making sure that relations in our own hemisphere are very positive and --

MR. MCLAUGHLIN: A good neighbor policy with our hemisphere neighbors. How many times have we heard that? Every American president in memory has talked the talk about good neighborliness with Latin America, and nothing of note has happened. But George Bush, if you believe him, may actually walk the walk. The president's first state visit outside the country was to Mexico, one month into his term, to visit with Mexico President Vicente Fox. Following that, three Latin American presidents visited the White House -- Brazil, Colombia, and El Salvador -- all during Bush's first 85 days.

Of course, Presidente Bush has another motive besides diplomatic outreach -- to wit, commercial outreach. Bush wants to create the world's biggest free-trade bloc, from Tierra del Fuego at the southern tip of Argentina to the Arctic Circle, 745 million consumers, almost a half a billion outside the U.S. That's more than twice the population of the EU, the 15-state European Union. Brazil alone has 170 million customers, who currently pay a 14 percent tariff on imported U.S. goods.

The FTAA -- that stands for Free Trade Area of the Americas -- will eliminate that Brazilian tariff and extend NAFTA from its existing three markets: Mexico, the U.S. and Canada, to 34 markets in North, South and Central America; every nation except Cuba -- one market with the U.S. as its hub.

Question: Isn't the FTAA a pipe dream, given the make up of this Congress, Eleanor Clift?

MS. CLIFT: Actually, no. I mean, I think this is a Congress that is disposed to trade. I think most Republicans are free traders, and --

MR. MCLAUGHLIN: Have you heard of the labor -- the union movement?

MS. CLIFT: Oh, I definitely have --

MR. MCLAUGHLIN: You don't think they're going to --

MS. CLIFT: -- but have you heard the Republicans are in charge of the House and the Senate, John? (Laughs.)

MR. MCLAUGHLIN: You don't think Dick Gephardt is going to make hay out of this whole subject? He's going to rip the Republicans apart, true or false?

MS. CLIFT: They're going to try to get some -- they're going to try some agreements about the environment and labor.

But I want to mention also, a little news happened this week which does throw into doubt President Bush's salesmanship: vote on the budget resolution in the Senate. After all the talk of this president's bringing a new tone to Washington and working in a bipartisan way, the bipartisan victory was not the White House it belonged to

MR. BLANKLEY: Well, look --

MS. CLIFT: It belonged to Senator John Breaux.

MR. MCLAUGHLIN: Let's pick that point up. The Senate voted $1.289 trillion for his budget instead of his proposed $1.6 (trillion). She sees that as a failure on the part of Bush, bearing in mind that Gephardt started a $250 billion --

MR. BLANKLEY: Yeah, last --

MR. MCLAUGHLIN: -- and they've climbed to $1.289 (billion).

MR. BLANKLEY: Last summer the Democrats were around $200 billion, now they've up to $1.28 billion -- at least 15 of them, enough for a majority -- that the --

(Cross talk.)

MR. BLANKLEY: The Congress voted on the House side for $1.6 billion (sic). When all is said and done, it's going to be very close to the president's original objective.

MR. MCLAUGHLIN: How much is up front where it's needed for fast spending and big spending?

MR. O'DONNELL: Very little, but the Senate --

MR. BLANKLEY: $85 billion.

MR. O'DONNELL: The Senate vote was a huge win for Bush. It will not be described that way because the Republicans are always terrible at claiming victory. I mean, this is an amazing victory: 65 votes, 15 Democrats plus 50 Republicans for something that is on the order of 90 percent of what Bush was asking for.

MR. MCLAUGHLIN: The Republicans held solid. In unity there is strength, Pat.

MR. BUCHANAN: They didn't hold solid --

MR. MCLAUGHLIN: How much is up front? My understanding it's the $60 billion that is up front, which --

MR. BLANKLEY: They upped it to $85 (billion), I think.

MR. O'DONNELL: Which is tiny, you know, in all --

MR. MCLAUGHLIN: They upped it to $80 (billion)?

MR. BLANKLEY: Eighty (billion) or $85 (billion).

MR. MCLAUGHLIN: You want to speak to this, Pat?

MR. BUCHANAN: Well, here, let me just say on this thing, John, I don't think it's a great victory. I don't think it's a massive defeat, but it's clearly a defeat. Bush has got $1.6 billion (sic). He didn't get it. Two Republicans bailed on him. He didn't get what he wanted.

When you're a free trade zone, John, first you got to get fast track. Secondly, a lot of problems: Brazil and Canada have got problems, Argentina is on the verge of default and devaluation. Third, the whole country, outside of NAFTA -- that's only 15 percent of the hemisphere once you get south of Mexico. You're talking peanuts, John, and there's no guarantee it's going to go into go into effect.

MR. MCLAUGHLIN: Pat, Jiang Zemin --

MR. BUCHANAN: Jiang Zemin?

MR. MCLAUGHLIN: -- is in Latin America this very weekend, correct?

MR. BUCHANAN: Yeah, I think he's been asking for an apology. (Laughs.)

MR. MCLAUGHLIN: Do you think that should cause raised eyebrows on our part?

MR. BUCHANAN: No, that's a very -- I'll tell you, they are behaving -- the Chinese are running this show well. He's saying, "This is not a great concern. We've got a conflict with the United States; holding their people. I'll continue my trip." Look at Bush and look at the secretary of State working until 2:00 a.m.!

MR. MCLAUGHLIN: You don't see any virtue in us shifting our export volume away from China and into Latin American?

MR. BUCHANAN: I'll tell you what'll happen: If you suspend MFN for one year, that will -- all of that investment will move out of China into Free Asia, Mexico, Latin America -- it will move out like that. (Snaps fingers.)

MS. CLIFT: Well, Jiang Zemin is regarded by his people as too soft on the West. So he's got to show that he's tough. That's his objective, and I think that's appropriately -- and I understand it on his part.

MR. BUCHANAN: Are you the ambassador for Jiang Zemin here?

MS. CLIFT: No, I --

MR. BUCHANAN: Well, look -- (laughter) -- you are explaining it from Jiang Zemin's point of view! (Laughs.)

MS. CLIFT: And are you the ambassador from a portion of the Republican Party that would like to turn this into --

MR. BUCHANAN: No, we are Americans.

MS. CLIFT: Well, of course we're both Americans. We see this confrontation in a very different way. And President Bush is actively engaged because people think that he is not engaged so he's got to prove he's engaged. You know, Pat, be realistic.

MR. MCLAUGHLIN: Pat, don't you think you can make a case for trade with Latin America --

MR. BUCHANAN: Look, I agree with trade, but I just don't think there's free trade zone as big as you say it is.

MR. MCLAUGHLIN: They're three countries, they're all democracies --

MR. BUCHANAN: John -- John --

MR. MCLAUGHLIN: -- they believe -- they practice human rights, and --

MR. BUCHANAN: Well, John, look, do you know what Mercosur is? Mercosur is the Southern Cone NAFTA. It is just in terrible trouble right now because Argentina has broken the deal with Brazil and they're putting tariffs on certain goods. John, these things --

MR. MCLAUGHLIN: Okay, exit question: Will Bush create a Free Trade Area of the Americas, yes or no?

Pat Buchanan.

MR. BUCHANAN: No, I don't think it will be done. It will not be done.

MS. CLIFT: I think he will do it.

MR. MCLAUGHLIN: First term?


MS. CLIFT: Ha! No, you can -- I'm not going to assume there will be a second term, so sure! (Laughs.)

MR. MCLAUGHLIN: Can't get her to lurch into that!

MR. BLANKLEY: His secretary of Commerce said that it will be 2005, adjusting up from 2003, before they're going to get it. It's going to be a hard call because Brazil, in fact, will probably resist it.

MR. O'DONNELL: He won't get all of the Americas, but he might be able to add Chile to NAFTA as the next country added.

MR. MCLAUGHLIN: In the first term?


MR. MCLAUGHLIN: If there is a second term, he will get FTAA, Pat. Sorry, Pat.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Issue three: The way we were. (Music played of Barbra Streisand singing, "The Way We Were.")

The way Democrats were is what liberals like Barbra Streisand remember and want back big time. In a memo to key Democrats leaked to the press this week, the diva tries to rally her Democratic troops. Quote: "What has happened to the Democrats since the November election? Some of you seem paralyzed, demoralized, depressed. Let's not let them" -- the Republicans -- "divert attention from the success of President Clinton's administration over the past eight years. Let's not allow the Republicans to take away the gains we've made. This is not a time to be weak." Unquote.

Well, Barbra's on to something, and she's not the only one on to it. Robert Reich, former secretary of Labor, FOB, Friend of Bill, and Rhodes Scholar with Mr. Clinton at Oxford, extends the Streisand insight: Party lacks power. "I know a dead party when I see one, and I'm looking at a dead party right now. Just consider the past eight years -- lost the presidency, both houses of Congress, almost all its majorities in state legislatures, most governorships. Will lose additional House seats in the next redistricting. Most of the current justices of the Supreme Court appointed by Republicans, also most current federal judges."

More Reich: "Party lacks leadership. Who speaks for the Democrats? Clinton is utterly disgraced, Gore ran a lousy campaign. And don't tell me the Democratic Leadership Council, with all that talk about being from the vital center -- why, even Hillary joined up -- is going to revive this bird. The DLC stands for nothing, nada, zero, except it's anti-union. No grassroots, no troops."

Reich then goes on to fault the party for having no message, no theory, no vision, no conviction. Quote, "It's not play dead, it is dead."

Question: Are the Democrats' prospects as gloomy as Reich portrays?

Lawrence O'Donnell?

MR. O'DONNELL: They're not. The difference between Reich --

MR. MCLAUGHLIN: Now you worked for --

MR. O'DONNELL: I worked for Pat Moynihan --

MR. MCLAUGHLIN: Pat Moynihan, excuse me. But you were there for years, so you know the Democrats?

MR. O'DONNELL: Yeah. Interesting difference between Reich and Streisand. Reich does not harken back to some glory days of liberalism under Bill Clinton because he knows Clinton was not a liberal. And Ms. Streisand has not gotten that through her head quite yet. She talks about this past as if Clinton has a single liberal achievement to point to in his eight years. He doesn't. In his last six years, he was more conservative than Ronald Reagan or Richard Nixon ever were, building up this budget surplus in cooperation with Republicans, signing all their legislation, no help at all to the people without health insurance in America, a number that increased under Bill Clinton.

MS. CLIFT: Well, if this is --

(Cross talk.)

MR. O'DONNELL: So Reich comes in and tells you what the Clinton legacy really is, which was loss of the House, loss of the Senate, loss of the legislatures, loss of the governorships --

MR. MCLAUGHLIN: Because he was not liberal?

MR. BLANKLEY: Yeah, look --

MR. O'DONNELL: -- because in his first two --

MR. MCLAUGHLIN: But that's all true.

MR. O'DONNELL: No, because, in fact, in Clinton's first two years, he tried to push so far to the left that he lost everything.

MR. BLANKLEY: Look, look --

MR. O'DONNELL: Then he just ran to right.

MR. BLANKLEY: Look, this --

MR. MCLAUGHLIN: Do you think that Reich ought to be on Prozac or have a vacation in the Caribbean, or wonder if he's on to something?

MR. BLANKLEY: Look, I don't want to be -- I think it's, as Rush Limbaugh would say, B.S. -- Barbra Streisand. (Laughter.)

Look, this is a gross overstatement. Every party, after they lose an election, say it's the end of the party. In fact, the Democrats, while they're going to do badly on reapportionment and redistricting -- they'll probably lose 10 or 15 seats in the House after the Census calculations come through -- nonetheless are in very solid position over the coming years, based on demographic shifts, to be a very powerful party again. I think that this is a matter of years before they're back in --

MS. CLIFT: Boy, Tony has actually lurched into the truth here. Look, you didn't pay nearly as much attention to what Bob Reich had to say when he was secretary of Labor. You dismissed everything he had to say then.

And secondly --

MR. MCLAUGHLIN: That's unlike me, isn't it, Eleanor?

MS. CLIFT: And second -- right, yeah. (Laughs.) Secondly, I mean, the Democrats are suffering from the loss of the White House, obviously, but if you look ahead, they're probably going to gain control of the Senate. Look at some governors' races -- New Jersey, possibly Virginia, maybe even Florida -- look at the mayors of Los Angeles and New York; they've got some victories coming up ahead. And --

MR. MCLAUGHLIN: Hey, Pat -- Pat, you've got the --

(Cross talk.)

MS. CLIFT: And the debate over liberalism versus conservatism, Lawrence, we're never going to resolve here. (Laughs.)

MR. MCLAUGHLIN: You've got for the Republicans a downturn in the economy -- no one knows how long that's going to last -- you've got the electricity problem, which could ravage other parts of the United States; you've got a potential airline strike of great magnitude. So -- you've got gas lines, too, right, because of the cost of energy --

MR. BUCHANAN: John, if I had to bet right now -- and it's not a hope, but I would think the Republicans would lose both houses of the Congress in this coming -- in '02.

And the problem with the Democrats -- excuse me -- is that their great leader, Clinton, when he left, went out on a banana peel.

MR. MCLAUGHLIN: Okay. Then that leads me to this exit question.


MR. MCLAUGHLIN: It's a little conspiratorial, but go with it. (Laughter.) How should the GOP treat these dismal Democratic memos? As documentary evidence of the enemy's disarray, or as deliberate misinformation?

MR. BUCHANAN: Neither. They just -- there's a left-wing liberal who's a very unhappy little guy. (Laughs.) That's --

MR. MCLAUGHLIN: You don't think this could be disinformation? For what reason?

MR. BUCHANAN: No, it's not. He's -- I think --

MR. MCLAUGHLIN: To lull the Republicans.

MR. BUCHANAN: Look, he's a very principled left-wing socialist, and he's very unhappy, and that's all it amounts to.

MS. CLIFT: And I would --

MR. MCLAUGHLIN: And so is B.S., right? Barbra.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: And I wouldn't let Barbra Streisand, if I were a Republican, dissuade me from the storm clouds on the Bush horizon --


MS. CLIFT: -- principally the environment and foreign policy woes --

MR. MCLAUGHLIN: So you think it could be disinformation, that leaked memo of Streisand's?

MS. CLIFT: No, it's heartfelt concern that liberalism isn't being practiced.

MR. MCLAUGHLIN: What do you think?

MR. BLANKLEY: Yeah, if I were a Democrat trying to leak persuasive evidence to the Republicans, I wouldn't do it from Barbra Streisand.

MR. MCLAUGHLIN: What do you think it is?

MR. O'DONNELL: I think the Republicans have to learn from these memos how much they've actually won and how to describe their victories. I mean, you know, Bill Clinton in his '93 tax bill got far less than George Bush is getting in the Senate, and that was always described as a Clinton victory.

MR. MCLAUGHLIN: I think that Republicans should treat it as disinformation, whether it is or not, because there's a long way to go before 2002, and there a lot of storm clouds on the horizon -- and with us, in fact.

We'll be right back with predictions.


MR. MCLAUGHLIN: Time for one prediction, "Return of the Native" prediction. Pat?

MR. BUCHANAN: The almighty dollar will crash like NASDAQ in Bush's first term.

MR. MCLAUGHLIN: Next week: Easter special. Bye-bye!





MR. MCLAUGHLIN: Issue four: SAT showdown. Just as high school seniors are getting their letters of acceptance about which colleges they can attend this fall, one of the main entrance criteria may fall by the wayside. The SAT test, dreaded by the millions who take it, is under attack. Critics call the test biased. Whites score higher than most minorities, males higher than females, affluent higher than poor. And critics say the test is an inadequate measure of actual college performance.

Now the president of the University of California, the largest state college system in the country, wants to drop the SAT as an admission requirement. Others fear that with no SATs, admission standards will plunge.

RICHARD ATKINSON (President, University of California): (From videotape.) It's a test with verbal items and quantitative items, but how they relate to a curriculum that a student studies in school, I would say, is truly a mystery.

MR. : (From videotape.) To drop the SAT in the application process would be as crazy as thinking about dropping grades as a criteria for college admission.

MR. MCLAUGHLIN: Another criticism of Atkinson's plan is that it will resurrect affirmative action, which was killed by Proposition 209, the initiative passed in 1996 that prohibits racial preferences in deciding who gets into California's state university.

Question: What is the big objection to dropping the SAT? Tony Blankley?

MR. BLANKLEY: Well, the biggest objection, it's the one objective criteria of capacity to perform at a university level. There's a lot of grade inflation going on in schools. There are a lot of private schools who want to get their kids into the best schools and they're pushing the grades up. This is the one honest way of measuring performance.

MR. MCLAUGHLIN: You're saying that college admission would then be based on a high school achievement record. And he says there's grade inflation, and he says there's a dumbed-down curriculum. But we also know that almost universally in the United States, we're having trouble on the high school level. So why not stick with this SAT?

MR. O'DONNELL: It doesn't mean that if you drop the SAT, you don't put something else in its place. The SAT began in the '40s essentially as an intelligence test, not as a predictor for academic performance in college. And President --

MR. MCLAUGHLIN: I beg your pardon. It was an aptitude test. Now they call it an assessment test.

MR. O'DONNELL: I understand. But it came out of the intelligence test that the Army started doing in World War I. And President Conan (sp) at Harvard, what he was interested in finding through this test is the possibility that there might be some Nobel Prize-winning physicist in the mix that we might otherwise miss. It's a different use.

MR. BUCHANAN: John, this is ideological. We have an egalitarian ideology. When the evidence and the facts contradict the ideology, they throw out the evidence and the facts. The problem with the SAT for all these people is they measure ability, excellence, how well you can handle studies; and people don't want that because they don't like the returns an objective test gives.

MS. CLIFT: Well, the SAT may have started out to advance the meritocracy, but in fact people are now buying better scores. And if you have a good income, you send your kid to be trained how to take the test. So --

MR. MCLAUGHLIN: Well, that's an abuse. That should be corrected.

MS. CLIFT: How is that going to be corrected? (Inaudible) --

MR. BLANKLEY: As a matter of fact, as a matter of fact --

MS. CLIFT: So I think it's perfectly --

MR. BLANKLEY: -- there was a study just recently showing that the test --

MS. CLIFT: I get to finish, Tony.


MR. BLANKLEY: Well, you were wrong.

MS. CLIFT: As a matter of fact, when -- I don't think I was wrong.


MR. MCLAUGHLIN: Don't rise to his bait. Quickly! Quickly!

MS. CLIFT: I'm not. Okay.

You can downgrade the importance of the SAT. It's not going to go away completely. But this comes at a time when President Bush is pushing a slavish devotion to tests at every level through elementary school. You're beginning to have parents who protest taking --

MR. BLANKLEY: There was a --

MR. MCLAUGHLIN: I'll give you two -- we only have two seconds.

MR. BLANKLEY: There was a recent study that showed that all the preparations for the SAT scores didn't help a lot. It's a great measure of ability.

MR. MCLAUGHLIN: Sixteen percent benefit.