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MR. MCLAUGHLIN: Issue one: Where's our daughter?

BILLY MARTIN (lawyer for Susan and Robert Levy, parents of intern Chandra Levy): (From videotape.) We remain optimistic that Chandra is alive. We want to bring back Chandra to her family alive, and we keep that hope alive on behalf of Dr. and Mrs. Levy.

MR. MCLAUGHLIN: The parents of Chandra Levy, a 24-year-old California native who disappeared seven weeks ago, have enlisted the help of a D.C. attorney in the search for their missing daughter.

This particular missing persons case, one of the current 800 missing persons in Washington, D.C., has become an insatiable media cause celebre.

The background: Ms. Levy had been interning at the Federal Bureau of Prisons in Washington. Levy was last seen on Monday, April 30, sometime before 10:00 p.m., at a health club in downtown D.C., Connecticut at M Street, three blocks from her apartment in an upscale neighborhood. On the next day, Tuesday, May 1, at about 12:30 p.m., her parents received an e-mail from Chandra regarding her return home to Modesto, California, on May 5 or 6. That was the last contact anyone had with Ms. Levy.

The media is frenzied. Ms. Levy is rumored to have had an intimate relationship with Democratic Congressman Gary Condit, representing her home district in California. Levy paged and cellphoned Condit up to 30 times only days before her disappearance.

Ms. Levy first met the married congressman, father of two, in his office seven months ago, introduced to him by her intern girlfriend working for Congressman Condit. Condit is not a suspect in Ms. Levy's disappearance and denies any romantic relationship with her, stating repeatedly that she had become merely a quote, unquote, "good friend." Condit is threatening to sue those media that do not retract accusations that Levy recently spent the night at Condit's home.

(Photograph is displayed on the screen.) He is also infuriated at this cropped photograph of Levy and Condit showing two persons. The original, uncropped photo depicts three persons: Levy, Condit, and Levy's friend, the intern who worked for Condit.

The lawyer under hire by Condit says the press outlets that publish the cropped photo are irresponsible.

JOSEPH COTCHETT (lawyer for Rep. Gary Condit): (From videotape.) The fact of the matter is that what the news media -- some of the news media, not all of it -- has taken this frenzied situation, turned it on its head, and is looking now only at the relationship between a congressman and an intern, when we should (be) devoting all our resources to finding this very fine young woman.

MR. MCLAUGHLIN: Question: In the context of allegations of an affair between Gary Condit and Chandra Levy, the publicized cropped photo of the two of them looks like corroboration, but in fact it is a falsehood. Is this a material misrepresentation that should bring embarrassment and shame on the press, Michael Barone?

MR. BARONE: Well, I think it goes up there with the cropping -- the cropped photo legends of the photograph of Senator Millard Tydings and Communist leader Earl Browder, which of course had never met, John.

I think the news media is seeing this in what I've called the "Columbo" template -- you know, like all those TV detective shows. And when you see the first scene of it, there's some fine, upstanding citizen, a businessman, a politician. You know he's going to be the culprit that they're going to finally catch in the end. He committed the crime. And they're imposing this on this situation because you've got somebody who had some connection with the intern who's a U.S. congressman. And so they're playing this like a "Columbo" show and adding irresponsibility to that.


MS. CLIFT: Well, I think it's a breach of ethics, but I must say, in the scale of breaches of ethics committed by the media, I think it's relatively minor. I don't think that picture suggests an intimacy.

I think there are two things fueling this media frenzy. One, there is a widespread suspicion that the congressman is not being fully frank about the nature of his relationship with this young woman. And we know how the media gets when they think a politician isn't being truthful about an extracurricular affair.

Secondly, the parents are helping to fuel the media frenzy, and I don't blame them. It's their only card that they have to play; it's the only way they can get attention and get everybody looking for their missing daughter. That's what's going on here.

MR. MCLAUGHLIN: Tony, a question for you. How politically damaging is this to Gary Condit?

MR. BLANKLEY: Oh, I think it's quite damaging to him.

MR. MCLAUGHLIN: He's very popular in his district, even though he is a Democrat. It's a very conservative district.

MR. BLANKLEY: He's got a lot of -- yeah, a pretty conservative Democrat.

MR. MCLAUGHLIN: And he votes conservative.

MR. BLANKLEY: And he votes pretty closely, yeah. He and John Kasich were soulmates in many ways on budgets and things.

MR. MCLAUGHLIN: And who was John Kasich?

MR. BLANKLEY: He was the former Republican chairman of the Budget Committee. Look, the sleaziest part of this story isn't the cropped photograph. There are three strains of this story. One, a back-bench congressman may have had a liaison with a 24-year-old woman, which is not much of a story. Maybe it's a one-day story. Second story, a person is missing, which usually isn't covered. And then the not-quite-stated -- and this is the sleazy part -- is that maybe the congressman is responsible for her -- her being missing and foul play is involved, and that's the sleazy part that creates the energy for this story, not quite said, and I think it's a horrid affair.

MR. MCLAUGHLIN: Why is the media so quick to land on the point that Condit may be -- might have misbehaved and is continuing to misbehave by concealment? Why is it -- what is it in the media's psyche that leads them to be so suspicious in this regard?

MR. CARNEY: Well, one, I think the media are missing our former president and the scandal that he brought to all of us to write about or put on television, so I think there's that aspect. There's a vacuum, there's a scandal vacuum in Washington. Here's one involving a politician. It involves, you know, potentially sex, potentially, you know, I mean, definitely disappearance and maybe something worse.

MR. MCLAUGHLIN: Could be worse, meaning that he could be involved in her disappearance?

MR. CARNEY: Well, or that something worse happened to Chandra Levy, whether or not Gary Condit was involved.

MS. CLIFT: Well, I -

MR. CARNEY: Hold on, Eleanor. I mean, I felt a lot of sympathy for Gary Condit early on when the media frenzy, or the speculation was intense and it was fueled in part by some irresponsible leaks from the Washington, D.C. police department. But the fact is, is that he's made his situation a lot worse by for a long time refusing to talk to, or not going and approaching the parents, the Levys, because he clearly had some sort of a relationship with this woman. It turns out that Chandra Levy called Gary Condit repeatedly on his pager. I mean, there is something here that may have nothing to do with why she disappeared, but certainly something to do with, you know, what was going on in her life in the last few days before she disappeared, and his silence is hurting him.

MS. CLIFT: Well, the media can't stand the fact that he won't take questions, and probably his lawyers are telling him that whatever he says is only going to lead to more questions. He has not been accused of anything. He has cooperated with the police, and maybe he's telling the police more than he's telling the media. I would hope that's the case.

MR. MCLAUGHLIN: There are --

MS. CLIFT: But the only thing he may know more about is her state of mind.

MR. MCLAUGHLIN: There are 799 other missing persons in the District of Columbia alone. Do you see the press covering those instances with anything bearing any resemblance to this?

MR. CARNEY: Well, no, but it has to --

MR. MCLAUGHLIN: Well, why are they doing it with this man? Why?

MR. CARNEY: Obviously because of the link between the missing person and the congressman.

MR. MCLAUGHLIN: It's only because of his status, correct?

MR. CARNEY: Exactly. Yes.

MR. MCLAUGHLIN: Well, what does that tell you about the press?

MR. BLANKLEY: It's typical of what the media does. I mean, it's offensive, but it's so predictable that it's hardly worth getting -- (word inaudible) -- over it.

MR. MCLAUGHLIN: Exit. On a media credibility damage scale of zero to 10, zero meaning zero damage, 10 meaning total credibility wipeout, like the networks' early calling of Florida for Al Gore, how much damage has the cropped photo and coverage excesses in this matter, done to the press's credibility? I ask you, Michael.

MR. BARONE: I'd say about a three --

MR. MCLAUGHLIN: Three? Eleanor.

MS. CLIFT: I think that's about right.



MR. BLANKLEY: Zero. The public loves it. They don't expect anything else from the media. (Laughter.)

MR. MCLAUGHLIN: (Laughs.) They've got their low base of credibility to start with --

MR. BLANKLEY: Yeah. They're right there.

MR. MCLAUGHLIN: -- and this keeps them right there. It's flat.

MR. BLANKLEY: No movement.

MR. MCLAUGHLIN: What do you say?

MR. CARNEY: Well, I think we have to rise above public expectation. I think four or five.

MR. MCLAUGHLIN: Four or five.


MR. MCLAUGHLIN: You're right on. You haven't lost your old touch --

MR. CARNEY: Well, John, thank you. (Laughter.)

MR. MCLAUGHLIN: It's exactly four or five.

When we come back, what explains President Bush's out-of-the-blue presidential decision to stop the Navy from live-fire training exercises on the island of Vieques?


Issue two: Political potpourri.

Item: Vieques vamoose.

PRESIDENT GEORGE W. BUSH (From videotape): My attitude is that the Navy ought to find somewhere else to conduct its exercises, for a lot of reasons.

MR. MCLAUGHLIN: A surprise political bombshell. Out of the blue, President Bush orders the Navy to end all military exercises on the Puerto Rican island of Vieques, used as a training site for 60 years. The Navy has until May 2003, two full years hence, to find a replacement site.

The most vocal protest against the Vieques decision came from members of the president's own party. They lambasted their leader, charging that closing Vieques will hurt military combat readiness. That without a new training site, American troops will be at risk.

REP. BOB STUMP (R-AZ): (From videotape.) I think this place is irreplaceable. There have been numerous attempts made to try to find an alternative training site, and so far, we've been unable to do that.

SEN. JAMES INHOFE (R-OK): (From videotape.) This is an issue that means American lives.

MR. MCLAUGHLIN: Question: Why did the president suddenly decide to stop Navy live-fire exercises on the island of Vieques? Eleanor Clift?

MS. CLIFT: Well, it's a recognition of the inevitable. They're going to lose the referendum on the island, and they've got to be out of there in three years anyway. So he tried to get some political mileage out of announcing what's going to happen regardless.

The problem with it is that Karl Rove, the political adviser, was so prominent in the decision-making, and it looks as though they put a bid for Hispanic voters ahead of military readiness, and it's driving the conservatives nuts.

MR. MCLAUGHLIN: What other factors are involved? Can you speak to that, Tony?

MR. BLANKLEY: Well, yeah. I mean, there's apparently no other location that we know of where you can have all three kinds of exercises -- bombing, landings and --

MR. MCLAUGHLIN: You've got two other alternative sites. One is Mona, which is an inhabited island, and the other is Dog Island, which is owned by the Brits, and they'll lease it to us.

MR. BLANKLEY: Well, according to Senator Inhofe, who has been focused on this very intensely for over a year -- he was part of the negotiations last year with President Clinton -- he believes that there is no other location the Navy has identified that serves the same purpose.

MR. MCLAUGHLIN: No other inhabited island. Vieques is inhabited, right?

MR. CARNEY: It is inhabited. And I think that President Bush made the right decision -- he will benefit from it politically -- although I think he did make it for political reasons. This president has focused, with Karl Rove's help, on two key constituencies here ever since he's been elected -- Catholic and Hispanics. And this is about those.

MR. MCLAUGHLIN: He's got to get at least 35 percent of the Hispanic vote in 2004, or he will not be reelected president.

MR. BLANKLEY: Well, he's also got to get about 98 percent of the conservative vote. And this is an action that has really upset the conservative wing of the party, and some conservative Democrats, as well.

MR. MCLAUGHLIN: Where else are they going to go? You know that. Vieques Island is not going to drive them out of the party.

MR. BLANKLEY: Ask his dad where they could go.

MR. MCLAUGHLIN: Who's the big winner?

MR. BARONE: I think the answer on this -- Eleanor's analysis, I think, was essentially correct.

MR. MCLAUGHLIN: Who's the big winner?

MR. BARONE: Who's the big winner? Well, one of the winners is Governor George Pataki of New York, who's been trying to get the -- who's been supporting ending the bombing of Vieques.

MR. MCLAUGHLIN: You're not --

MS. CLIFT: Hillary Clinton.

MR. MCLAUGHLIN: -- you're there, but no cigar.

MR. BLANKLEY: Al Sharpton and Hillary Clinton, who have been advocating that.

MR. MCLAUGHLIN: Okay. Who else?

MR. CARNEY: George W. Bush.

MR. MCLAUGHLIN: The big winners are the developers. The developers. They've got beautiful sandy beaches there.

MR. BARONE: They've got a few bomb shards down there.

MR. MCLAUGHLIN: Yeah, but it's only -- what, out of 35,000 acres, more than that, 35,000 acres, 900 is the gunnery area. They can clean that up overnight.

MS. CLIFT: Are you investing, John? Are you investing?

MR. MCLAUGHLIN: Item: Blame game.

(Line of song played: "Blame it on Texas, don't blame it on me.")

Summer officially began this week. Temperatures are heating up. So is the political "blame game."

California's electricity agony. With 52 House seats up in the 2002 elections, the stakes are staggering. The first waves of battle are over the airwaves.

VOICE: (Advertisement sponsored by the American Taxpayers Alliance.) He's pointing fingers and blaming others. Gray Davis says he's not responsible for California's energy problems, after all, the Public Utilities Commission blocked long-term cost-saving contracts for electricity. But who runs the PUC? The people Gray Davis appointed -- Loretta Lynch and other Davis appointees who left us powerless. That's why newspapers say he just ignored all the warning signals and turned a problem into a crisis. Grayouts on Gray Davis.

MR. MCLAUGHLIN: Question: How does this ad rate for pinning the blame on Davis?

I ask you, Jay Carney.

MR. CARNEY: Well, I think it's reasonably effective. Davis obviously has a problem in California.

MR. MCLAUGHLIN: Why is it effective?

MR. CARNEY: Well --

MR. MCLAUGHLIN: Shall I give you a hint here?

MR. CARNEY: You know why it's effective. (Laughs.)

MR. MCLAUGHLIN: Independent, third-party corroboration in the form of newspaper headlines. That helps a lot. You know that, right?

MR. BARONE: Well, the fact is that last summer, the utilities, Southern California Edison, PG&E, came to Gray Davis and said, "Please let us buy long-term contracts." And he said, "No, we can't do that because rates would have to go up a little bit." And of course Californians can't possibly have higher rates.

Well, since then, they've gotten much higher rates than that. And so there is an argument there. I mean, Davis is responding. He's hired, for $30,000 a month of taxpayers' funds, Chris Lehane and Mark Fabiani, the attack dogs of the Clinton and Gore campaign.

MS. CLIFT: The White House caved on price controls this week -- wisely so. And more information is emerging from California about price-gouging and about price manipulation. And so the White House is not out of the woods on this, and placing the blame on Gray Davis for that --

MR. MCLAUGHLIN: She has exactly stated the knee-jerk -- and I'm not saying -- (inaudible) --

MS. CLIFT: Correct! (Laughs.)

MR. MCLAUGHLIN: The knee-jerk reaction to this issue is: Big oil is gouging us --

MS. CLIFT: That's right.

MR. MCLAUGHLIN: -- or FERC, or the politicians, they're all in this. That's the knee --

MR. CARNEY: That's what the -- (inaudible) -- are saying.

MR. MCLAUGHLIN: I want to know, however, whether or not that has been neutralized by Bush.

MR. BLANKLEY: It hasn't been neutralized yet. But I must say, Bush has not handled it well over the first six months.


MR. BLANKLEY: Yes, because, obviously, when he came in, the problem existed because of the failure of Gray Davis and the California politicians and the California electorate. And in a matter of six months, the Democrats have been able to push the blame at least partially onto Bush. This is a little shove back; it's not enough yet.

MR. CARNEY: Look at the numbers, John. I mean, look at -- Bush's numbers are abysmal on energy and the environment. And Davis may be doomed because of this. His presidential ambitions are over, I think, and he may not get reelected. But Bush is paying a price as well.

MR. MCLAUGHLIN: Before you get hysterical on this, Bush's numbers are largely flat for the last couple of weeks. Take another look at them.

MR. CARNEY: Look at the issue numbers. His job approval is flat; look at the issue numbers.

MR. MCLAUGHLIN: All this green eyeshade stuff.

Item: Under the microscope.

PRESIDENT GEORGE W. BUSH: (From videotape.) I expect every member of this administration to stay well within the boundaries that define legal and ethical conduct. This means avoiding even the appearance of problems.

MR. MCLAUGHLIN: That was George Bush on the January day this year when his White House staff was sworn in.

Time wrap, January to June.

PRESIDENT BUSH: (From videotape.) My level of confidence with Karl Rove has never been higher. His a man of sound -- gives me sound advice. He adheres to the ethical rules of our government.

MR. MCLAUGHLIN: Question to you, Tony. Why is Bush now making this statement about Karl Rove?

MR. BLANKLEY: Well, Karl Rove has become the target by the Democrats of an accusation -- an unfair one, I believe -- of ethical impropriety --

MR. MCLAUGHLIN: What did he do, allegedly?

MR. BLANKLEY: He owned a lot of stock, and he requested the ethics lawyers for permission to sell it. They dilly-dallied. During the pendency of their dilly-dallying, that issue came up relating to that stock that he had some participation in. He then sold the stock as soon as the lawyers gave him permission to.

MR. MCLAUGHLIN: Well, who did he meet with in the interim, before he sold it?

MS. CLIFT: Yeah --

MR. MCLAUGHLIN: Who did he meet with?

MS. CLIFT: Executives from Intel. And he owns $100,000 stock in the company. And they were looking for a big merger. After the merger goes through, one of the executives at that meeting sends a thank-you note to Bush officials, including Karl Rove, thanking them for their help.

MR. BLANKLEY: Yeah. He would have made --

MR. CARNEY: Right.

MR. BLANKLEY: He would have made more money if he'd sold the stock in January than if he sold it now.


MR. CARNEY: Tony, the fact is, you're right. I don't believe Karl Rove was doing something to improve his financial situation.


MR. CARNEY: But he did create an appearance and --

MR. BLANKLEY: Right. I understand that.

MR. CARNEY: -- but I think you're -- also, interestingly, you're saying that the Democrats are, you know, targeting Rove on that. In fact, the Democrats have announced that they don't want an investigation.

MR. BARONE: Henry Waxman did make a statement.

MR. BLANKLEY: No, and the fact that they said it -- in the House they've been calling for an investigation. Daschle says he doesn't want to sell it, probably because he doesn't want to set the precedent --

MR. CARNEY: I'd be surprised if there is.


(Cross talk.)

MR. CARNEY: I'd be surprised if there is.


MR. BLANKLEY: The problem is that Daschle -- (inaudible) -- Daschle doesn't want the precedent of investigating Torricelli, the senator -- Democratic senator --

MS. CLIFT: He's already being investigated. (Chuckles.)

MR. MCLAUGHLIN: Clandestine meetings?

The Bush administration's energy task force released its extensive report last month. The task force was chaired by Vice President Dick Cheney, and the names of the 14 members of the task force and their positions were published prominently in the report.

But some Democrats on Capitol Hill want to know other names, the names of the people the task force met with.

REP. HENRY WAXMAN (D-CA): (From videotape.) We ought to have the basic information of who participated, what interest groups came in and made their case, so that we can look at the recommendations to see whether they got what they asked for.

MR. MCLAUGHLIN: Question: Is the White House barring trouble by not disclosing the names, or are they right to protect the privacy of those they counsel with? I ask you, Jay.

MR. CARNEY: I think they ought to disclose. I mean, we learned from the Clinton era, the health care report, just disclose the names. If people want to participate --

MR. MCLAUGHLIN: How are you going to get people to give candid judgments if they think --

MR. CARNEY: If they believe in --

MR. MCLAUGHLIN: -- go to the White House and give you their candid judgments? They're going to be all over the TV screen.

MR. CARNEY: It's tough luck. It's tough luck.

MR. MCLAUGHLIN: Tough luck.

MR. CARNEY: When the Clinton -- Clintons tried to do this, it was a mistake, and when Bush is trying to do it, it's a mistake.

MR. MCLAUGHLIN: When did he try to do it -- Clinton?

MR. CARNEY: In the health care plan. All they -- you know, when they tried to --

MR. MCLAUGHLIN: Well, you know --

MR. BLANKLEY: No, they -- in the health care plan, the Democrats, under Clinton, broke the law by having people who -- put on staff in a secret meeting --

MR. BARONE: Federal employees --

MR. BLANKLEY: -- which violated the federal law. They were federal employees.

This was private citizen coming in to meet privately with the president or his staff --

MR. BARONE: Ordinarily --

MR. BLANKLEY: -- and is not against the law, and they have every right to maintain their privacy.

MR. BARONE: Ordinarily --

(Cross talk.)

MR. MCLAUGHLIN: Well, if this goes to -- first of all, executive privilege is at issue here, or could be --

MS. CLIFT: No. No way. Oh, no. If they --

MR. MCLAUGHLIN: Why? Why? Why?

MR. CARNEY: What is it -- what interests of it are they hiding?

MS. CLIFT: Because -- yeah. These are people coming in, advising on policy. That doesn't -- that's not going to be covered by executive privilege.

And Jay is right. What are they hiding? The fact that they don't release --

MR. BLANKLEY: People come in to meet presidents all the time in private.

MS. CLIFT: Well --

MR. BARONE: And appointments.

MR. BLANKLEY: Every president has lots of people come in to meet in private. There's no reason why --

MS. CLIFT: But these people influence the energy policy that affects all of our lives. Why can't they tell us whose advice and counsel they sought?

MR. BLANKLEY: You can say that about every meeting that any president has. There's no requirement, there's never been a --

MR. BARONE: You can say that about every telephone conversation people have or indeed about what they read --

MS. CLIFT: Well, and they hounded the Clinton administration for everything.

(Cross talk.)

MR. MCLAUGHLIN: Well, what is the law, Michael?

MR. BARONE: The law here -- I don't think the law requires a disclosure in the way that it's --

(Cross talk.)

MR. MCLAUGHLIN: How about the Federal Advisory Committee Act? You ever hear of it?

MR. BLANKLEY: That's only if you're an employee of the government that it's got to be made -- would it have to be a public --

MR. BARONE: Which is not the case here.

MR. BLANKLEY: This isn't the case.

MR. MCLAUGHLIN: Well, don't you think executive privilege does apply here, if they wish to invoke it?

MR. BARONE: Probably not.

MR. BLANKLEY: No, that's a national security issue. I wouldn't go that far.

MR. BARONE: (Inaudible) -- executive privilege too far.

MR. MCLAUGHLIN: Well, it was invoked in the case of Al Gore trying to protect information deriving from the White House Commission on Aviation --

MR. BLANKLEY: Yeah, that's an abuse of the statute.

MR. MCLAUGHLIN: -- and there was a woman by the name of Victoria Cummock who sued, and the court decided in her favor, and they had to release the information.

MR. BARONE: I'll take your word for it, John.

MR. CARNEY: Smart policy --

MS. CLIFT: (Chuckles.)

MR. MCLAUGHLIN: So therefore there is a precedent there, and probably he would lose if they press executive privilege --

MR. BARONE: John, John --

MR. MCLAUGHLIN: -- but moreover, it looks bad if they do.

MR. BARONE: John, I think we -- John, I think you've got --

MS. CLIFT: The public --

MR. BARONE: I think we've gotten here where we've gotten on some of the issue you're talking about before, with Karl Rove's stock holdings, where we've got encrustations of regulations and got to hold ourselves above suspicion and so forth, and avoid appearance -- where there's nothing they could do.

Rove was told not to sell his stock, and now he's in trouble because he didn't sell the stock. How do you win in that situation?

MR. MCLAUGHLIN: Well, the advice was given to him not to tell (sic) the stock.

MS. CLIFT: Yeah.

MR. MCLAUGHLIN: It is unclear whether Rove said, "Hey, by the way, before I sell the stock, I have this meeting previously scheduled with Intel." If the lawyer knew that, the lawyer probably -- the lawyer giving him advice would probably have said, "Well, you better not have the meeting, or you better sell your stock." (Cross talk.)

There's one rule that Karl Rove definitely broke. What was that? A political rule.

MR. CARNEY: He created an appearance of conflict.

MR. MCLAUGHLIN: He created an appearance --

MR. CARNEY: Even when I completely --

MR. MCLAUGHLIN: You're right again.

Exit question: Who won the week, Bush and the Republicans or the Democrats?

MR. BARONE: I'd say Bush won it because the Virginia 4th District congressional race was won by a Republican. It's only the fourth time in the last 24 years that a race like that has -- out of 77 races where it's moved toward the president's party -- vastly underreported in the liberal media, like the New York Times and the Washington Post. (Laughter.) Big story.

MR. MCLAUGHLIN: Also, the issue used against Forbes, who won the race, was privatization of Social Security, and once again, the Democrats are scaremongering with Social Security, and they fired blanks once again.

MS. CLIFT: They didn't scaremonger enough.

MR. MCLAUGHLIN: What's the -- who won the week?

MS. CLIFT: Actually, the country's not riveted on the 4th District of Virginia. They are watching the Patients' Bill of Rights debate, and the Democrats are winning that one. Democrats win this week, easily.

MR. MCLAUGHLIN: What do you think?

MR. BLANKLEY: Yeah, you're right that at a functional level, the election in the 4th District of Virginia was very important. But Eleanor, unfortunately, is right that the public's focused -- because the media is focused -- on the Patients' Bill of Rights, and it's a Democratic week.


MR. BLANKLEY: Because that's an issue that every time it's uttered, Republicans are losing points.

MR. MCLAUGHLIN: What do you think?

MR. CARNEY: Well, Bush -- I'll just say that Bush probably came out even, because energy prices went down in California and across the country.

MR. MCLAUGHLIN: I can't believe how good you are. (Laughter.) You're absolutely right. That is the correct answer.

MR. CARNEY: Thank you, John.

MR. MCLAUGHLIN: It's a draw. We'll be right back with predictions.


MR. MCLAUGHLIN: Predictions, Michael, fast.

MR. BARONE: Bush will threaten to veto appropriations bills.


MS. CLIFT: Companies that get the contracts for new voting equipment in Florida will return the favor and contribute big to Bush's campaign.


MS. CLIFT: The companies that get the contracts for the voting machines.

MR. MCLAUGHLIN: Okay. Got it.

MR. BLANKLEY: Bret Schundler will win the Republican primary for governor of New Jersey next week.


MR. CARNEY: The Bush-Putin lovefest will turn sour after they meet in Genoa in July.

MR. MCLAUGHLIN: That's your first mistake. I predict President Bush's nominee to the position of U.S. ambassador to the United Nations, John Negroponte, will be confirmed by the U.S. Senate.

Bye bye!



MR. MCLAUGHLIN: Issue three. Bush's bellwether boost.

PRESIDENT GEORGE W. BUSH: (From videotape.) It's my honor to welcome the newest member of the United States Congress to the Oval Office. Randy Forbes ran a great race.

MR. MCLAUGHLIN: Virginia's Fourth Congressional District, won by Randy Forbes this week 52 to 48 percent commanded the attention of political analysts nationwide. This was a special election to fill the seat caused earlier this year by the death of long-time Democratic Congressman Norman Sisisky. Since this election is the first to follow the Senate power shift and President Bush's slippage in the polls and since the Forbes Democratic opponent, Louise Lucas, chose to hype privatization of Social Security in her political advertising, political gurus read the outcome as a bellwether of next year's mid-term elections 16 months from now.

Here's the Democratic challenger's big-lever ad weapon:

(Begin video.)

NARRATOR: Do you know Randy Forbes wants to privatize Social Security?

MR. : That's crazy.

MS. : Oh, my goodness, no!

NARRATOR: A scheme that could lead to cuts in benefits or raising retirement age. Your Social Security savings riding up and down on the stock market.

MR. : That roller coaster ride would cause a lot of people to have heart attacks.

MS. : I'd have the pudding scared out of me.

NARRATOR: Pudding?

MS. : My heart wouldn't take it.

NARRATOR: Randy Forbes, gambling with your Social Security.

MR. : If Randy Forbes is supporting privatization, I'm not supporting Randy Forbes.

(End video.)

MR. MCLAUGHLIN: Can we assume that this advertisement, built on scare-mongering of Social Security, since it didn't work and Randy Forbes won, can we assume that it has no impact or power in the upcoming mid-term elections?

MR. BARONE: I think it can have impact and power in some places, John, but you're right that Democrats have to be careful and not rely on the old saws; you know, Social Security as an issue to use against the Republicans. Because public attitudes towards privatization have changed, especially among younger Americans, and I think there's a willingness and openness to privatization that didn't exist before.

MR. MCLAUGHLIN: Is this fourth district a bellwether of what's to come, or is it just an opportunity for the media to indulge themselves? I ask you, Eleanor.

MS. CLIFT: First of all, Virginia is a pretty conservative state. the Democrat who held the seat was pretty conservative. You had an African American woman running in southern Virginia in a 40 percent black district.

So I think the cards were stacked against her. But frankly, Tony told me something I didn't know, and that is that that Social Security ad was cutting and that the Democrats pulled it in the last couple of weeks. So I invite Tony to explain that to --

MR. BLANKLEY: Well, actually, they pulled it for a week and then they put it back up.

MS. CLIFT: Well, let him explain.

MR. MCLAUGHLIN: And there was also a counter-ad that was introduced by Forbes.

MR. BLANKLEY: Yeah. I mean, Forbes defended vigorously the Bush position on Social Security. He didn't back away. And I think it was his willingness to stand and fight on it.

MR. MCLAUGHLIN: Tony, can we extrapolate from the 4th District an attitude in the country prevailing about privatization of Social Security? Yes or no?

MR. BLANKLEY: No, I don't think you can extrapolate. I think this is a bellwether district. It went for Clinton very closely. It can go either way. The fact that the Republican Forbes won is a good indication for Bush, but I wouldn't say that therefore you don't have to worry about Social Security. That issue will play in some areas, and sometimes the ad cuts. It depends who the opponent is. Forbes defended. If he had been negative and defensive, it might have worked even better.

MR. MCLAUGHLIN: Is it not true that it's not advertising, it's not consultants, it's not scare pieces like this, it's going to be the economy that will determine who wins the mid-term election coming up in, what, 16 months?

MR. BARONE: I think it's going to be a whole raft of economic and cultural issues. John, this was a district that was 49-49 in the last presidential election, so it's about as good a bellwether as anything. It's not perfect. And I think it shows the Social Security issue does not carry all before it. And that's that.