MR. MCLAUGHLIN: Issue one: Congress anthraxed.

HOUSE MINORITY LEADER RICHARD GEPHARDT (D-MO): (From videotape.) These are maybe terms of art. "Is it weapons-grade?" Hey, it's dangerous. It is easily aerosolized. It is obviously small enough to get through the nose and into the lungs. We don't need any more evidence to come to that conclusion.

MR. MCLAUGHLIN: Anthrax took over Congress this week. Only the Capital building itself, its wings and rotunda, escaped closure. All the other seven buildings of the legislative complex closed their doors for various periods of time: Russell, Dirksen, Hart, Cannon, Longworth, Rayburn, and Ford; 780 offices, 20,000 employees dislocated, with the deadly bacteria, anthrax, thus stalling, but not quite stopping, the legislative process, thanks to resourceful staffers working with laptops and cell phones in assorted basements around town.

The anthrax letter that was sent to Senate Majority Leader Daschle two weeks ago was the most deadly strain of the germ. Twenty-eight people suffered exposure from that letter. And even more dreadful, the anthrax traveled well beyond its sealed envelope. One man, never closer than 20 yards from the envelope itself, and outside the room where the anthrax was, tested positive for exposure through inhalation.

This means that in its high-grade milled particle form and its microscopic dimension, anthrax travels as though it were not matter, but an odor, a smell, unseen yet present. Like the smell of, say, bacon cooking at the end of a dwelling and traveling to the other end, so does this high-grade anthrax permeate in sinister and chilling fashion.

Question: We're not used to fighting on home turf. We are a security-flabby nation. Based on what we saw on Capitol Hill this week, are we getting into shape fast enough? Lawrence Kudlow.

MR. KUDLOW: Well, I think we are. Listen, John, this is all new territory. And I wouldn't say we're security-flabby. I'd just say we're a very free and open society. And until recently, we haven't had to put up with this kind of thing.

But I think the authorities, the public health authorities, the administration authorities, people in Congress, I think they're working towards it. I think they're going to get this thing. But it may go on. You know, don't forget, the Unabomber, who worked through the mails, took 17 years before that story was finally figured out. So they're going to have to do what they're going to do on the Hill and the White House.

MR. MCLAUGHLIN: What do you think, Eleanor?

MS. CLIFT: We don't have 17 years to wait. And there were two needless deaths this week because the government did not respond fast enough. So I think, you know, the only positive thing you can say about this is this is a small attack, considering what could be done. And it gives us a chance to see the vulnerabilities. But to say this administration is doing a good job -- there is nobody of authority who is reassuring, who is out there with information. And the lack of that figure, I think we're painfully aware of that.

MR. KUDLOW: I think --

MR. MCLAUGHLIN: Hold on, Larry. Isn't this the most germophobic nation on the earth? Sterile hand wipes, antibacterial products. Do you think that we are showing a disproportionately heavy and significant response to anthrax?

MR. BLANKLEY: Well, the answers are yes and no. Yes, we do, I think, as a society get particularly focused on health and cleanliness. But, no, I don't think it's an overreaction. I'll tell you why. The reason I think this is a big story is not just the tragic deaths, but the fact that this is a shakedown cruise for a more serious attack, and we're seeing that the systems are not nearly ready, the public systems.

I'm not blaming anybody, because we haven't dealt with this problem before. But, in fact, it's interesting. If you listen to Senator Frist talk, he's always been a voice for great calmness. By the end of this week, he was beginning to say, "You know, we don't even know the methodologies of these dangers. We have to start studying the phenomenon. We're at the beginning of the process of even understanding the nature of the danger before we can fully marshal it."

So, no, I think that we have a long way to go, not because anyone's particularly to blame but because these are new challenges that haven't yet been faced before.

MR. MCLAUGHLIN: What's he talking about? Different types of germ warfare?

MR. WARREN: Of course. It's a --

MR. MCLAUGHLIN: Different toxins? Is he talking about agricultural strain? Is he talking about encephalitis, as in Venezuela?

MR. BLANKLEY: Also talking about the danger of poisoning our agricultural system. The intelligence community is now beginning to think that the British hoof-and-mouth disease may have been a terrorist rather than a naturally-formed problem. The cropdusters that we were scared about may have been intended to poison the feed lots and the agriculture and the fruit. And we don't have any systems in place to protect our agricultural system.

MR. MCLAUGHLIN: You know the way the IRA bombed London during the shopping season at Christmas time. Shouldn't we be thankful that this is not like that?

MR. WARREN: Or we should -- first of all, I'm glad I -- I'm sorry I didn't bring my surgical gloves after Tony's apocalyptic outline of what faces us.

MR. BLANKLEY: Reasonable, rational.

MR. WARREN: I think more important for the British example is the fact they've learned to live with that. Life goes on. They realize that, you know, terror can occasionally be a part of life.

But to answer your basic question, are we security-flabby? Absolutely. Decades of passivity and inertia. And even now, we're focusing on absolutely, I think, the wrong dangers in many ways. Yes, we're going after -- we're putting security guards around this public space or that public space, while we're leaving alone tunnels and bridges and trains. You go to Chicago. One big federal building is ringed by security; anther big City Hall plaza is not. We really don't have a clue what to do.

MR. MCLAUGHLIN: We have no national strategy.

MR. WARREN: Absolutely no strategy.

MS. CLIFT: There's no way to protect everybody from everything all the time.

MR. KUDLOW: John, let me just weigh in on this. You just started this homeland security with Governor Tom Ridge. The guy's, you know, hardly found the men's room, for heaven's sakes. He's gonna staff up. He's gonna get organized. He's gonna create a group there.

By the end of last week, he had become the spokesman, thankfully. I don't think Governor Thompson over at HHS did anybody any good, especially attacking the patents for Bayer Corporation, the pharmaceutical. But I think Ridge is going to be a strong player. And I think -- look, there's a lot of problems here. We're going to have to feel our way through this. But give them time. This is a war effort, John. It's come on very fast.

MR. MCLAUGHLIN: Okay, even with the dislocation problems, Congress did manage to get work done this week. Here's one measure. The Senate passed the anti-terrorism bill, 98-1. This allows the FBI to detain foreigners for up to seven days without charging them, to use roving wiretaps to cover all phones, to track Internet use and e-mails, and to perform searches without notice.

Question: Will these new policing powers do real good, do you think, Eleanor?

MS. CLIFT: I don't necessarily think they're going to help in catching whoever's perpetrating the anthrax through the mails. But I think they will help give the government more powers in holding some of the people they suspect might have terrorist ties. And some of these provisions do sunset after four years. They are sort of crisis measures.

But I wonder if they really will sunset after four years. And some of them are also designed to catch up with modern technology, so you don't just have one person on one phone; you tap that person, whatever means of communications they're using.

I'm uncomfortable with some of the infringements on civil liberties. But frankly, in the climate we're living in, I'm not going to be out on the barricades protesting.

MR. MCLAUGHLIN: So you basically support the law.

MS. CLIFT: I do.

MR. BLANKLEY: I'm not uncomfortable with them. I'm in favor of them. I'm a civil libertarian, and I will be again as soon as the dangers subside. This is a good bill. I think it should have gone further. I think it should have given more powers but been sunset shorter; given only two years, but give more powers.

I'll give you one example: Detention of immigrants here. This expands it from 72 hours to a week to hold these people who are suspected but can't be proven to be involved in terrorism. I can't imagine why we don't want to be able to allow our government to hold these people longer than that if necessary.

MR. MCLAUGHLIN: Okay. CDC discriminatory?

SAM SAUNDERS (U.S. POSTAL WORKER): (From videotape.) I feel that they should have went directly to the post office when they found out there was an anthrax scare, even in the mailrooms. They were talking about the mailrooms in the Congress and the mailrooms in the news media, and it didn't make sense for them not to go directly to the post office.

MR. MCLAUGHLIN: Washington DC mail carriers are angry -- angry because congressional employees and media high-profilers got their prophylactic Cipro, while ordinary folk in the postal system got the short end of the stick. Capitol Hill police dogs were tested for anthrax before they were. Atlanta's Center for Disease Control -- the CDC -- had advised against testing or preventively treating the Brentwood postal workers who had processed the anthrax letter sent to Senator Daschle. With more inhalation anthrax deaths, now three, the CDC is on the defense.

Question: Was this a class-conscious lapse by the CDC, meaning the health care system has different standards for blue-collar workers versus white-collar workers? I ask you, James Warren.

MR. WARREN: First, Tony Blankley, the counterterrorism bill is total mess. Tough times make tough laws, but we've gone way overboard here. We should remember the obscenities perpetrated by the FBI and the CIA in the '60s when they went way overboard in surveillance of dissidents.

That having been said --

MR. BLANKLEY: This isn't political interrogation. This is war time. FDR, Roosevelt, Wilson, Lincoln, all --

MR. WARREN: (Inaudible) -- habeas corpus.

MR. MCLAUGHLIN: All right, address yourself to my question. My question --

MR. WARREN: (Inaudible) -- suspend habeas corpus. Don't forget that.

MS. CLIFT: And we don't defend that.

MR. WARREN: There's, I think, a clear class-conscious bias against the mostly black postal workers in America's cities. Has that been in evidence here? I actually don't think so. I think what you have here is just the absolutely expected bumbling of a public health care system that has met something for the very first time.

MR. MCLAUGHLIN: You know that the lords and ladies of Capitol Hill, they get special treatment.

MS. CLIFT: Well --

MR. MCLAUGHLIN: First of all, they write the appropriations for the CDC. And there's never a time -- look at the way Gary Condit was treated by the DC police.

MS. CLIFT: Oh --

MR. MCLAUGHLIN: Of course there is a difference between the two. You don't agree with me?

MS. CLIFT: In fairness, it looked like there was an elitist quality to who got the medicine. But the CDC based their decision on the fact that they didn't think these spores could escape from the envelope. And we now see that if you even put talcum powder in an envelope, clap your hands nearby --

MR. KUDLOW: Let me --

MS. CLIFT: Excuse me. I get to finish. The talcum powder can escape through the paper itself. And anthrax spores are a whole lot tinier. So this is a learning experience. Unfortunately, the postal workers were the guinea pigs.

MR. KUDLOW: The benign interpretation -- I basically agree with Eleanor -- is that the CDC figured out they had to go downstream to understand where this stuff was coming from. And that's when they got to the postal office, right at the source.

But I want to revisit this terrorist thing. You know, there's nothing more important than keeping our businesses open each day and going home to our families at night. And I'll tell you this. The thousand detentions that Attorney General Ashcroft has announced is roughly comparable to the increase in the Dow Jones stock market recovery points, and there's a linkage. There's a correlation between those two things.

MR. WARREN: Well, I'm glad there's no linkage to your past predictions, which had it up to 15,000 by now, Larry.

MR. KUDLOW: We cannot do enough -- we cannot do enough, during this emergency wartime period, we cannot do enough for domestic anti-terrorist security.


MR. MCLAUGHLIN: Don't you think that the workers at Brentwood, those postal workers, have a legitimate grievance and ought to be angry?



MR. MCLAUGHLIN: Don't you think so?

MR. BLANKLEY: I do. I wrote a column on this effect. I also think that, putting aside that, look how they treated the tabloid media in Florida versus the big media in New York. The tabloid had to wait five days, five days after they diagnosed it, before they bothered to say they should be checked. And up in New York, they did what they should have been doing for everybody.

MR. MCLAUGHLIN: All right, that brings us to the exit question. Grade the government's handling of the anthrax letter attack so far, A to F. Lawrence Kudlow.

MR. KUDLOW: I think it's gone from about a C- to about a B-, and I think they're going to get it up to a B+/A pretty soon.




MR. BLANKLEY: I guess I'd give them about a C-. I think they're trying at about a B+ level.

MR. MCLAUGHLIN: You're right. The average is C-. You're absolutely correct.

MR. WARREN: We'll bring it down, a totally-to-be-expected D.

MR. MCLAUGHLIN: D. The answer has to be broken up. Florida, they get an F. That's the American Media, the tabloid you were talking about. The New York Times and the TV networks, A. The postal workers, F. The average right now is a C-. Write that down in your column.

When we come back, are we facing an economic calamity?


MR. MCLAUGHLIN: Issue Two: Put the pedal to the metal.

PRESIDENT BUSH: (From videotape.) We need to accelerate the tax relief that is always -- that is already going to happen.

MR. MCLAUGHLIN: Well, the House of Representatives obliged Mr. Bush. It not only accelerated tax relief, but raised the ante from his $75 billion to $100 billion over the next year, $25 billion more than what the president had capped the limit at. The vote: 216 to 214. Why so close? Some Democrats, like Ohio's Dennis Kucinich, think that the tax package is weighted too much towards business.

REP. DENNIS KUCINICH (D-OH): (From videotape.) We need to take care of unemployed workers. We recognize that. They say, "Let's take care of the biggest corporations in America!" What hogwash!

MR. MCLAUGHLIN: Question: You heard Democratic Congressman Kucinich blast the Republicans for kowtowing to fat-cat businessmen. Will the stimulus package be the legislation that breaks the post-September 11 bipartisan spirit? Lawrence Kudlow.

MR. KUDLOW: Well, you know, one point about Mr. Kucinich is that you can't have jobs without businesses to hire people. And this has been a business-led downturn from day one.


MR. KUDLOW: Layoffs. Unemployment is going up. Next week, John, there's going to probably be a 300,000-person job loss. The unemployment rate is going to go up by at least half a point. All the indicators are pointing down. We're going to have a contraction in the third quarter and the fourth quarter.

So the House tax cut, which is not a perfect bill, does nonetheless have some important incentives for businesses, which will then give them better cash flow and better earnings so they won't have to lay off so many workers. You cannot have a healthy job force without healthy business. It's just that simple.

MS. CLIFT: Right. And these healthy incentives, $170 billion worth of basically tax giveaways to support corporations --

MR. KUDLOW: Long overdue. And small businesses and medium businesses and (factors?) appreciation for technology.

MS. CLIFT: This economic --

MR. MCLAUGHLIN: Let Eleanor finish.

MS. CLIFT: This economic stimulus package gives each party a chance to strut their stuff. And you're right, the Republicans are totally on the side of the corporate giveaways and the tax cuts. And the Democrats want to bail out the working people.

MR. BLANKLEY: Let me --

MS. CLIFT: And it seems to me that the White House --

MR. MCLAUGHLIN: Hold on, Tony. I want to hear --

MS. CLIFT: The White House is in the middle because the president is scared to death of looking like he doesn't care about people who are losing their jobs, the way his father appeared.


MR. BLANKLEY: Let me answer your question, as a novelty. I think you can make good arguments for different forms of a package than both the House and the Senate have passed.

MR. MCLAUGHLIN: Don't be too even-handed on this program, Tony.

MS. CLIFT: He won't be.

MR. BLANKLEY: I'm not gonna be. Thank you. And my guess is that the president is going to bring it to that center. However, when you question, "Are they turning partisan?" Yes. Look at the rhetoric the Democrats have been using. It's the old class -- (inaudible). They could have made technical arguments that might have been reasonable. Instead they turned to the political, the partisan, the class-warfare language.

MR. MCLAUGHLIN: You know what's going on? The Democrats and many others think that the recession is going to last through next year. Next year is an election year, and they know that the economy is going to be what people will be voting on, come November of next year, not anthrax, not the way the president has handled the war -- the economy. And they want to go on record as preferring demonstrably the individual over the corporation, failing to realize that the "beige book" that the Fed put out emphasized one thing this week, layoffs, and how it is hurting the economy.

MR. WARREN: Thank goodness the Republicans have absolutely no political motives here. I mean, I think Larry's hero -- Treasury Secretary O'Neill is his hero, because I think he had breakfast with him, if I remember, a couple of months ago.

MR. MCLAUGHLIN: Oh, he's turned against him. He's turned on him. He's turned on him.

MR. WARREN: But anyway, Mr. O'Neill --


MR. MCLAUGHLIN: Let him finish. What did O'Neill say?

MR. WARREN: Mr. O'Neill, who occasionally commits rare, politically incorrect declarations of political candor, got it right about --

MR. MCLAUGHLIN: What did he say about the House bill?

MR. WARREN: "That's show business" -- called it show business.

MR. MCLAUGHLIN: Show business. But he's now eating his words and he's trying to rebuild his relationship --

MR. KUDLOW: He was blown out of the water. Listen, the White House had to chastise him.

MR. WARREN: (Inaudible) -- a little bit of demagoguery on both sides. Unfortunately there'll be some confessions by both --

MR. KUDLOW: Paul O'Neill is a bright guy, but he's been on the wrong side of this issue. He's lost any ear for the music.

MR. WARREN: No breakfast in a couple of months for Larry.

MR. MCLAUGHLIN: He's for the Senate version now.

MR. KUDLOW: No. Actually, the Senate version is not a stimulus bill. It's just a spending bill. The key point here is two-fold. Number one, this is a bit Daschle versus Bush. There's a lot of bad friction. In Bush's speech to the business people on Friday, he said at least five times, "If the Senate will give me a bill." He said it on tax cuts. He said it on energy. He said it on trade. So there's one issue.

The second issue is the final product coming out is going to be a lot closer to the House business tax-cut bill for the very simple reason that the economy is contracting and the unemployment rate is going up. And calmer heads are going to prevail. Look for the moderate John Breaux/Zell Miller Democrats to push Daschle towards a bigger tax cut.

MR. MCLAUGHLIN: You mentioned Zell Miller. Isn't it true that you would like to see Zell Miller replace Paul O'Neill as soon as possible as secretary of the Treasury, a Democrat?

MR. KUDLOW: I think that Zell Miller makes a terrific economic contribution for the growth argument, and I think that --

MR. MCLAUGHLIN: I've got a question. My question is, it had been predicted by economists of stripe -- and I would include Larry in that --

MS. CLIFT: Especially today, if you're talking about stripes.

MR. MCLAUGHLIN: -- that the economic cost of the horrendous September 11th attack -- attacks, plural -- plus the cost, the ongoing cost of the anthrax, which they're predicting is going to hurt the economy more in October and November than September the 11th cost us in September, but that it will amount to about 1 percent of GDP loss?

MR. KUDLOW: Right.

MR. MCLAUGHLIN: Is that where you come out?

MR. KUDLOW: Yeah, that was my original take. And I think the tax-cut bill should cover that 1 percent of GDP. That's why the House number of $100 billion is just about right. You know what, John? Here's a counter-view, though. Don't get too pessimistic. The stock market is roaring. It likes the business tax cuts. It likes the anti-terrorist measures. It likes the conduct of the war. The stock market is telling you that we could have economic recovery by next spring, as long as we do something to help businesses and jobs.

MR. MCLAUGHLIN: Don't you find, living out in Chicago, where you have a luxurious mix of various kinds of Americans -- it's luxuriously ethnic -- don't you find that what Americans are really doing is that they're not withholding their spending, they're shifting it? Granted, they may be afraid of going to the Caribbean, but they're going to recreations near home and they are spending. Aren't you finding that?

MR. WARREN: The answer is no. You take a look at what's happened, say, at a paper like the Chicago Tribune. Our help-wanted ads are down 50 percent. That is gargantuan sums of money, $70 million, $80 million. We've got -- the executives in Chicago are already writing off the Christmas retail season. So the answer, John, is no. They are simply not spending.

MS. CLIFT: Tax incentives --

MR. MCLAUGHLIN: Don't you think resources are really being redirected, for example, into security and into counterterrorism? That's where the resources are going. Those are going to be the economic winners.

MR. WARREN: Well, hopefully coming out of the Senate will come a greater mix of tax cuts and --

MR. KUDLOW: (Inaudible.)

MR. MCLAUGHLIN: We have to sum it up, Larry. We're out of time. How much will the September 11th attack and the unpredictable spread of bioterrorism cost the economy? Are we facing an economic calamity? Is the bottom falling out? Lawrence Kudlow.

MR. KUDLOW: We were going into recession anyway because of the Federal Reserve deflationary policies.

MR. MCLAUGHLIN: And we're there.

MR. KUDLOW: This is going to make it one or two quarters longer and about one and a half percentage points deeper.

MS. CLIFT: Recession is a certainty. And tax incentives for business are not going to do any good if people don't have any money to buy what business produces. You've got to give working people the money.


MR. BLANKLEY: Yeah, I think we -- it's not quite a calamity; a deep and prolonged recession.

MR. WARREN: Yes, in part because a stimulus package, beloved and dreamt of by Larry Kudlow, will not work.

MR. KUDLOW: You know, John --

MR. MCLAUGHLIN: I have to give my answer. My answer --

MR. KUDLOW: You have to produce before you can consume. I just want to correct Eleanor on that.

MR. MCLAUGHLIN: The answer is the bottom is not falling out. On the very week when the "beige book," as the Federal Reserve book came out, with its pessimism, the market somewhat rallied. Correct? While there will be pain, there will also be gain.

We'll be right back with predictions.


MR. MCLAUGHLIN: We're almost out of time. I'll give you, James Warren, the opportunity to make your guest prediction.

MR. WARREN: Fitting post-11th development: The New York Yankees win the World Series. President Bush calls the locker room and announces that Rudy Giuliani is the new homeland security director; Tom Ridge out. Victory for New York.

MR. MCLAUGHLIN: Are you serious?

MR. KUDLOW: CIA. CIA perhaps.

MR. MCLAUGHLIN: Are your sideburns getting longer? You're starting to look like the Count of Monte Cristo. I predict that the virulent, ultra-refined anthrax in the Daschle letter will be found to have originated in a U.S. federal laboratory.

Bye bye.


MR. MCLAUGHLIN: Issue three: Trouble in the air. New airline regulations are not always good regulations, or maybe it's the way they're enforced.

TRANSPORTATION SECRETARY NORMAN MINETA: (From videotape.) Some places they take tweezers away; they take eyelash curlers away; they take -- and then yet, yesterday we heard of this situation where someone goes on through the screening system with a gun. I mean, that is outrageous.

MR. MCLAUGHLIN: One solution: Federalize the entire airline security system.

HOUSE MINORITY LEADER RICHARD GEPHARDT (D-MO): (From videotape.) The pilots are with us. The flight attendants are with us. The customer service employees back our approach. The vast American people are with us.

MR. MCLAUGHLIN: The Senate this week unanimously passed a bill, pushed by the Democrats, to have the government take over airline security. But House Republicans are not as swift to move, charging the Democrats with union-stacking.

HOUSE MAJORITY LEADER DICK ARMEY (R-TX): (From videotape.) With them, it's all about union membership in a union that imposes compulsory dues that fund their campaigns.

MR. MCLAUGHLIN: Question: Is it a good idea that airline security be turned over, top to bottom, to the feds? Or is Dick Armey right; this is a manipulative Democratic strategy to simply enlarge a Democratic union so as to alter the election vote in November 2002? I ask you, James Warren.

MR. WARREN: By and large, it's probably not a bad idea. I don't see the specter of some left-leaning new union to help the Democrats in the next election.

MR. MCLAUGHLIN: You want the feds to take over top to bottom?

MR. WARREN: Well, look at all the things we don't think of contracting out, all the security matters such as Border Patrol. So I think a case can be actually made here for doing it. You have --

MR. MCLAUGHLIN: What's wrong with just supervision?

MR. WARREN: Because otherwise I think you have real tough questions of how you recruit and train people, how you monitor them, and also what sort of cooperation you have between the FBI sharing information with a private security group.

MR. BLANKLEY: The federalizing proposal goes against the experience that Europe's had. Europe has got standards, but they have it privatized. This is what the president --

MR. MCLAUGHLIN: Standards are enforced by a supervisory federal authority.

MR. BLANKLEY: Yes. In Europe, they're different.


MR. BLANKLEY: But here it would be the federal government establishes the standards and enforces them, but it's done by private companies. Now, there are some advantages to this.


MR. BLANKLEY: To doing it the way the president wants, which is not to federalize. One of the advantages is you can fire contract employees. You can't fire civil service employees.

MR. MCLAUGHLIN: Yes, and he said that.

MR. BLANKLEY: Yeah. And the other point is that the president's proposal will provide protection for all means of transportation. It would place in the Department of Transportation -- this is a bureaucratic point, but it's important, because they're ready to implement.

MS. CLIFT: You know --

MR. MCLAUGHLIN: You heard --

MR. BLANKLEY: The Senate proposal would put it at Justice --

MR. MCLAUGHLIN: Now, you heard Mineta. Mineta says it's outrageous the way they're trying to enforce this law against anything that has the smallest point on it.

MR. BLANKLEY: Of course. It's got to be standardized, and that's what the president's proposal will do.

MR. MCLAUGHLIN: Whatever happened when you had rent-a-screeners, as we have rent-a-cops?

MS. CLIFT: I wouldn't make fun of those people. They are getting minimum wage, and they're there because the airlines don't want to affect their bottom line. It's not their fault. But you need --

MR. MCLAUGHLIN: Oh, thank you for the little homily.

MS. CLIFT: Well, the country would thank me for it, too. And frankly, if they professionalize --

MR. WARREN (?): (Inaudible.)

MS. CLIFT: If they professionalize and give them a career path, that's what we need to do. And maybe there'll be a mix of federal and private. But the Republicans are scared to death to bring that to a vote, because nobody's going to vote against it. People in this country want the government to protect them.

MR. KUDLOW: You know, the people that run the airports are the state and local government authorities, and they ought to have some say in this on a region-by-region basis.

MR. MCLAUGHLIN: They don't want to pay for anything.

MR. KUDLOW: No. That should be done -- I think Tony's right --

MR. MCLAUGHLIN: The airlines are now paying for those screeners.

MR. KUDLOW: The important thing is we need better security. The second thing is, the airlines cannot do it. It's a terrible industry, and they're bankrupt most of the time.


MR. KUDLOW: Why not set up independent authorities privately to do it, as Israel has done, for example.

MR. MCLAUGHLIN: You mean, like management comes in and manages prisons today.

MR. KUDLOW: Well, that's correct. But state and local governments should have the piece of the regulation --