MR. MCLAUGHLIN: Issue one: fiscal fitness.

PRESIDENT GEORGE W. BUSH (From videotape): We left more money in the hands of the American people, and the American people are moving this economy forward.

MR. MCLAUGHLIN: Seven-point-two percent, sizzling news for the president, as the GDP goes gangbusters; 7.2 percent in the third quarter, the fastest growth rate in 19 years. Consumers have gone on a buying spree, spending their Bush tax rebate dollars and refinancing their mortgages.

Get this: Mergers are back in style: Bank of America with FleetBoston, R.J. Reynolds with Brown & Williamson. Item: Stock market surging. Over 1200 points in the last six months, inching towards the 10,000 mark. In value, stocks have jumped over $800 billion since President Bush's initiative to reduce the double taxation of dividends. One hundred fifty thousand new jobs are predicted to come on line before spring.

Okay. Can the explosive growth continue, or will the press rain on the fiscal parade? Jack Welch cautions journalists in Thursday's Wall Street Journal, quote, "Even though many companies from battered sectors recorded positive results, their successes were almost universally reported with the word `but' prominently featured. The fact is the recovery will be a lot harder if we keep saying `but' about damn good news."

Question: The press is generally regarded as liberal leaning. Can we then assume that the press will disparage the achievement of the conservative George Bush in this wonderful news on the economy in an election year, and that accounts for this "but" fixation? I ask you, Pat.

MR. BUCHANAN: Well, John, the press, the big national press, has an anti-Bush bias, an anti-conservative bias and a bias toward negativity. A factory shutting down is far better news for a newspaper than a factory that's adding employees. But this news is so deep and so good -- 7.2 percent, the housing starts, the durable goods being purchased, the consumer confidence and all the rest of it -- that it looks like such a powerful recovery. And secondly, people have money in stocks and 401(k)s, so each month they get that good news. It will be tough to be negative if this good news continues. That's a big "if."

MR. MCLAUGHLIN: And the jobless claims, by the way, have reached a lower level, and 57,000 new jobs came on line last month. Also, inflation's holding steady.


MS. CLIFT; Unless you get over 100,000 new jobs coming on line each month, this recovery cannot be considered an unqualified success. It is premature to hoist the "mission accomplished" banner. (Laughter.) These numbers were fueled by the one-time refinancing boom, by the $300 checks that went out -- that were not part of Bush's original goal, but were pushed by the Democrats. And if additional jobs do not come on line, we can't say this is a success. We know these kind of numbers cannot be sustained in the next quarter.

But I want to congratulate Tony, who predicted this several weeks ago.

MR. BLANKLEY: Thank you.

MR. MCLAUGHLIN: Tony, what are your thoughts on Jack Welch's point? Do you think the press is trying to undercut this? Does it have anything to do with an election coming up next year?

MR. BLANKLEY: I don't -- the press is conventional. So far, there's been a lot of bad news on the economy. I've been bearish on the economy for a year and a half editorializing. I looked at it and two or three weeks ago decided I saw the turnaround, and I think we do have one. I think the media will catch up eventually to the reality. Eleanor's right, we're not going to get 7 percent every month. I think we have a very reasonable expectation of 4 percent, 4.5 percent growth for the next year. And without question if we get that, the economy's going to be solid and it will not be an issue the Democrats will want to be campaign on.

MR. MCLAUGHLIN: Is this economic turnaround also a political turnaround of Bush's stats, statistics, polling statistics on handling the economy, which dropped rather precipitously?

MR. ZUCKERMAN: It can be. It all depends if it's a sustainable economic growth. The odds are much better that it is, as a result of this past quarter. But, for the reasons that I think Eleanor is referring to, if employment doesn't grow -- I mean, after all, we've had 30 months of a decline in employment. If that doesn't change around, and it may not, then you have a very different kind of political dimension to this. But it seems to me the economy -- the odds are much better now that the economy will continue to grow.

It is true that the third quarter benefited from one-time events, particularly not just the $300 rebate, but the fact that all the tax cuts --

MR. BUCHANAN: Exactly.

MR. ZUCKERMAN: -- were accelerated into the third quarter. And you saw that in terms of the dramatic increase in consumer durables, which --

MR. BLANKLEY: But you --

MR. ZUCKERMAN: -- went up by (23 ?) percent.

MR. BUCHANAN: Exactly.

MR. ZUCKERMAN: These are one-time events. On the other hand, we've had three years of slow economic growth. The media was right in putting "buts" before the last three years. They may be wrong going forward. I do think the economy is going to grow at a faster rate than people had previously thought.

MR. MCLAUGHLIN: Does this put an end to the bugaboo of deflation? The CPI went up more than two points.

MR. ZUCKERMAN: Yeah. Deflation is still a concern. Okay? In part because we are faced with very little pricing power on the part of business and tremendous pressure from imports. The competition from imports is absolutely extraordinary, and wider and wider throughout the economy, including in the service sector.


MR. MCLAUGHLIN: Wait a minute.

MR. ZUCKERMAN: So I don't think there's going to be inflation. I also don't think there's going to be deflation.

MR. MCLAUGHLIN: Well, will the momentum hold? What do you think?

MR. ZUCKERMAN; I do believe it will hold through next year.

MR. MCLAUGHLIN: Well, how's he going to do it? As she points out, there are no new re-mortgagings that seem to be appearing in any great number.

MR. BLANKLEY: No, no, but --

MR. MCLAUGHLIN: And it's a one-time-only tax cut.

MR. BLANKLEY: No, let me --

MR. MCLAUGHLIN: That was the rail -- those are the rails on which it moves.

MR. BLANKLEY: It's not a --

MR. MCLAUGHLIN: I want to hear from him. One minute.

MR. ZUCKERMAN: Well, it will hold if employment begins to inch up, consumers continue their spending and business starts to spend. Right now it looks like business spending is beginning to pick up for the first time. If that --

MR. BUCHANAN: It's up 15 percent.

MR. ZUCKERMAN: Eleven percent.

MR. BUCHANAN: From a low level.


MR. ZUCKERMAN: It's also a false number.


MR. ZUCKERMAN: It is a calculated number.


MR. ZUCKERMAN: About 75 percent of that is what they call hedonic price method.


MR. MCLAUGHLIN: Well, is this lifting your lugubriousness, that cloud that's been hanging over your head?

MR. ZUCKERMAN: You may call it lugubriousness. I call it reality.


MR. ZUCKERMAN: I am very happy that I was a bear for three years.

MR. BLANKLEY: John. John --

Mr. ZUCKERMAN: I -- (inaudible word) -- a lot of things that protected me.

MR. BLANKLEY: Okay, look.

MR. MCLAUGHLIN: I want to hear from Tony. Poor Tony, he's -- you know, he's agitated over here.

MR. BLANKLEY: It's not entirely a one-time tax break. Yes, there are some one-time payments, the ones that came in July. But you have rates that are lower, you have capital gain -- you know, business tax cuts that are lower, (you need ?) those sustained. That's the dynamic nature of supply-side theory. And I expect to see that continue to be stimulative, though not as stimulative as the first kick-in in the third quarter.

MR. BUCHANAN: The Democrats are hurt by the fact that Howard Dean, their presumptive nominee, what is he going to do? He's going to repeal the entire Bush tax cut -- that's a $2 trillion tax increase -- when it looks like Bush is a prophet, saying, "When my tax cut hits, it goes off."

MS. CLIFT: Yeah, but --

MR. BUCHANAN: If you come to the spring and this is still going, and Howard Dean is yelling about repeal the tax cut, he's going to be "Mondale squared."

MR. MCLAUGHLIN: All right, these statistics came through at the end of -- at the end of --

MR. BUCHANAN: September.

MR. MCLAUGHLIN: Now, Dean has a caucus in January.


MR. MCLAUGHLIN: In Iowa, rather. The fourth quarter, those results will not be in. So this is not going to affect Dean's standing in Iowa.

MS. CLIFT: Yeah --

MR. BUCHANAN: The fourth quarter is one-third over, and it looks like about 4 percent growth, as Tony said.

MR. MCLAUGHLIN: Will it also -- will that optimistic prediction also hold true because it is expected that this is going to be a strong retail sales season, in view of the holidays?

MR. BUCHANAN: We've gotten all this money -- and Tony is right. Look, the tax rates have been cut. They're going to be cut again, in effect, in January, for the full year.

MS. CLIFT: Two quick points. Economists agree jobs are going to pick up. The question is, are they going to pick up enough where people notice them? Fifty-seven thousand jobs doesn't do it. A hundred thousand jobs will.

And secondly, the tax cuts were -- and that's per month. The tax cuts were exquisitely timed. But after the election, there will be a hangover when we see the deficits that will remain, and at what price did we pay for George Bush's recovery?

MR. BLANKLEY: This is not --

(Cross talk.)

MR. MCLAUGHLIN: Wait a minute. So you don't think Dean is going to be hurt by his strong appeal for the taxes to be repealed?

MR. BLANKLEY: Let me explain that.

MS. CLIFT: No, but the part he's talking about is not the part that we're experiencing. It's the future part that rewards people that are at the top end.

MR. BLANKLEY: He's not going to be hurt in the Democratic primary. He's not going to be hurt in the Democratic primary, because all the Democrats are proposing at least half of the tax cuts -- of Bush tax cuts repealed. He's proposing more of it. In that voter bloc, they don't care. They believe tax cuts are evil. It's in the general election, if and when he gets there, that he's going to get hurt.

MR. BUCHANAN: Exactly.

MR. MCLAUGHLIN: All right. Don't expand on this exit question answer. Just give me a yes or no, because we've made all the central points, as we are expected to do and we do every week. Is that true?

MR. BUCHANAN: That's -- (inaudible). (Laughter.)

MR. MCLAUGHLIN: Okay. Exit: Will the momentum in the economy be sustained? Yes or no?

MR. BUCHANAN: We have lift-off.

MS. CLIFT: Moderately.

MR. BLANKLEY: Yes, vigorously.


MR. MCLAUGHLIN: Answer: Yes.

When we come back, how much sleaze is there, if any, in major contractors in Iraq contributing to the Bush-Cheney 2000 campaign?


MR. MCLAUGHLIN: Issue two: Ramadan Offensive.

(Footage of the aftermath of attacks in Iraq.) Grotesque carnage is what greeted the start of Ramadan in Iraq. Suicide bombers in Baghdad struck the headquarters of the International Red Cross and three Iraqi police stations, wreaking devastation and horror -- 35 killed, 230 wounded.

In Fallujah, four were killed from another suicide bombing, a freight train was sabotaged, all in the wake of the rocket attack at Baghdad's Al-Rashid hotel, where Defense Deputy Paul Wolfowitz and many other U.S. officials were staying -- one killed, 17 wounded.

Ambushes on U.S. GIs are escalating at an alarming rate --

(Begin videotape.)

MAN IN IRAQ: We need a doctor! We need a doctor!


(End videotape.)

MR. MCLAUGHLIN: -- an average 33 attacks PER DAY, an increase over the past six weeks of more than 50 percent.

These intensified suicide strikes produce effects that seriously derail and undermine the overall U.S. strategy:

One: Donor nations balk. Governments are reluctant to send their troops into harm's way. Portugal, Bangladesh say no. South Korea is stalling. Also, money has been slowed.

Two: International groups exit -- the Red Cross, Doctors Without Borders, the United Nations all pulling out foreign staff. Also, construction companies are halting operations, pulling out or delaying arrival.

Three: U.S. transfer of power to Iraqis thwarted. Iraqis are not yet able to handle the power to secure their homeland.

The president blames both Saddam Ba'athists and foreign terrorists for the horror. But he says the mounting destruction means progress is being made.

PRESIDENT BUSH: (From videotape.) There are terrorists in Iraq who are willing to kill anybody in order to stop our progress. The more successful we are on the ground, the more these killers will react.

MR. MCLAUGHLIN: Others marvel at this logic.

SENATOR TOM DASCHLE (D-SD, Senate minority leader): (From videotape.) If this is progress, I don't know how much more progress we can take.

SENATOR BILL FRIST (R-TN, Senate majority leader): (From videotape.) I don't know whether this is progress. I wouldn't say that this is this progress that is any way precipitating the violence.

MR. MCLAUGHLIN: Question: What is President Bush implicitly saying when he says the more progress we make, the more the killers will react, Eleanor Clift?

MS. CLIFT: He's trying to put a happy face on increased violence and suggesting that the enemy is getting more desperate because we're on the verge of pulling off some great success. I think it's ludicrous. Even the Australians are telling their people to bail out of Iraq. It's too dangerous to expect any of our allies to want to come in. And the administration's rhetoric is all about staying the course and hanging tough, but behind the scenes, they're trying to hand it over to Iraqi kids, 18- and 19-year-olds with very little training, and they're going to draw down -- General Rove is going to draw down the troops before the election next year. I think the magic number is 100,000. They want fewer than 100,000 troops in there by next November.

MR. MCLAUGHLIN: Let's move on to the major consequences that are in that set-up. They are -- the donors are going to be reluctant or less willing to put in money and to send in their youth in this situation which is so unstable. What about those other -- three of them, all together, were listed there.

MR. BLANKLEY: Look, I've always argued, and a lot of people have, that we shouldn't expect a whole lot of help from the rest of the world. This is a job that, regretfully, we're going to have to do by ourselves, largely, with only a little bit of assistance. So I discount the loss, because I didn't think we were going to get much help.

Certainly, it's the case that if we -- there is a race between us and the saboteurs, the terrorists, to win the hearts and minds. And if we are making progress, then they need to hurt us hard, fast, because otherwise, our successes will begin to grow roots. I don't know whether we're there or not, but that's obviously what the president was -- (word inaudible).

MR. MCLAUGHLIN: All right. It should be said that there's good news in Iraq, and the good news is that the public at large has really turned against this kind of exaggerated, extreme resistance that's being shown by those who want to rid the country of the occupiers.

MR. BUCHANAN: That's not good news.

MR. MCLAUGHLIN: There are 7,000 Baghdad police now on duty, and the new police that are being processed every month are 2,500 a month, and the coalition benchmark says 19,000 in Baghdad and 75,000 nationwide.

MR. BUCHANAN: All right. That's not good enough. What is happening is the terrorists are going after the U.N., the Red Cross, aid workers, Jordanians, everybody who cooperates with the Americans, including the Baghdad police, Iraqi police, to drive them out. Then, they're killing the Americans to affect us at home. And the question, John, is exactly are the Sunnis in Iraq willing to stand up, fight and die in great numbers to have the kind of future we want for them, or are they going to be spectators, in which case, the Americans will be coming home?

MR. MCLAUGHLIN: All right. The bad news in Iraq in terms of death is that the military dead has now reached a total of 360 since the start of the war, and the U.S. military wounded and injured is 2,110. And I might add that it's very difficult to get the number of the wounded and the injured out of the Pentagon. One -- staffers tell me that they are moved from one bureaucrat to another, with very little effort to try to communicate how many have been wounded and how many have been injured.

Do you have any thoughts on the major consequences of the war; the donors are less willing to come forward, and it's making it more difficult to turn over the governance of the place to the Iraqis?

MR. ZUCKERMAN: Look, I think Tony's point is correct. The bulk of both the manpower and the finances are coming from the United States. Some of the donor money may be held back very little, but it's an easy way for them to make a contribution without having to send troops.

But there's another side to this thing. You know, a lot of Iraqis are getting killed in all of this. They're not going to be happy to be sitting there as the subjects -- or, the victims of this kind of terrorism, as well. And it's all coming, as everybody knows, from the Sunni tribes, particularly the Tikrit tribe, that really lived off of all of Iraq for the last 30 years.

MR. BUCHANAN: That's what I said!

MR. ZUCKERMAN: And the real question is will, in fact, the Shi'as, as well as the disaffected Sunni tribes, you know, join together and work to throw out the --

(Cross talk.)

MR. BUCHANAN: They've got to be able to fight and die, and they have not demonstrated that yet. The Shi'as haven't, and neither have the Sunnis. They're letting the Americans do it, and the Americans can't do it alone.

MS. CLIFT: The question is --

MR. ZUCKERMAN: Right -- you know, right now, there are no troops there --

MS. CLIFT: -- the question --

MR. MCLAUGHLIN: Eleanor --

MR. ZUCKERMAN: Let's get the Iraqi troops on board. It's going to take us some time to do that. This is not going to happen overnight, and we have to be patient for this. They've got to train troops and police from Iraq and get the intelligence out of Iraq.

MS. CLIFT: The question --

MR. ZUCKERMAN: We have no ability to walk into a Sunni town and know who is a friend and who is a foe.

MS. CLIFT: The question --

MR. MCLAUGHLIN: Do you believe that the first phase of this guerrilla strategy is to isolate the United States. The NGOs are pulling out. The United Nation (sic) is pulling out. What's the second phase, Pat?

And by the way, you were the one who predicted a Tet Offensive, in the manner of a holiday offensive that occurred in Vietnam.

MR. BUCHANAN: The second purpose, John, is to go at the will of the American people.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: That's what a Tet Offensive is all about. That's what these casualties are all about. Make sure it's only the Americans in there and keep going after them, killing them.

MS. CLIFT: And it is working.

MR. BUCHANAN: And frankly, the president of the United States has got to get up and tell us there's going to be, as Rumsfeld says, a long, hard slog.

MS. CLIFT: He -- what --

MR. MCLAUGHLIN: The second phase --

MR. BUCHANAN: His presidency is on the line.

MR. MCLAUGHLIN: The second phase of guerrilla strategy is to create a condition of ungovernability. And that would mean when people are in the streets, saying that this occupation is worth less than the price we are paying --

MR. BUCHANAN: If it --

MR. MCLAUGHLIN: -- and when that happens, then they have us on the way out.

MR. BUCHANAN: If the Iraqis --

MS. CLIFT: And what the --

MR. ZUCKERMAN: The other thing --

MS. CLIFT: Excuse me. And what this administration is now talking about is Iraqization, which is like Afghanization, and that's the turning over to the warlords, because if we turn it over to the Iraqis, with the minimal training that we're talking about, we're inviting that country to have a civil war. And I think they are ripe for a civil war and that could very well --

MR. MCLAUGHLIN: All right. We've got to get out on this. We didn't have a chance to discuss it, but I mentioned it in the tease to this program, and that is, on a scale -- a sleaze-scale factor from zero to 10, zero meaning no sleaze at all, 10 meaning extreme and crippling sleaze, how damaging are the revelations that major contractors in Iraq all gave political contributions to the Bush- Cheney 2000 campaign, the maximum amount apparently being $1 billion to Bechtel, and then it drops rather precipitously to about $113,000 to Dell.

MR. BUCHANAN: John, look, it's going to be American corporations that are going to be running the show in there.


MR. BUCHANAN: And every corporation gives to Cheney-Bush --

MR. MCLAUGHLIN: Zero? Zero sleaze?

MR. BUCHANAN: Zero to one.


MS. CLIFT: Oh, it's a healthy six or seven. (Laughter.)

MR. BUCHANAN: These --

MS. CLIFT: And the fact that all these contracts went to the buddies of the president and the vice president is one of the reasons that the rest of the world doesn't want any part of Iraq. If they don't get any economic goody out of it, what's the incentive?

MR. BLANKLEY: Look, you wouldn't expect Halliburton or any other oil company to have contributed to Gore, because he was in favor of getting rid of the internal combustion engine.

MR. BUCHANAN: (Laughs.)


MR. BLANKLEY: So even if Gore were president and were in this situation, you'd have to turn to the same companies. They're not lunatics. They voted for the right side.

MR. MCLAUGHLIN: Zero sleaze? Zero?

MR. BLANKLEY: Point-oh-one.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: What do you think?

MR. ZUCKERMAN: It's zero to one. There would have to be a major scandal that emerges before this becomes a political issue.

MS. CLIFT: It will.

MR. ZUCKERMAN: I don't see it coming up at all.

MS. CLIFT: (Chuckles.)

MR. MCLAUGHLIN: I agree with you. And also, we haven't heard the figures on those corporations that did not give to the campaign who are also getting contracts in Iraq.

Issue three -- you got that point on that?

MR. BUCHANAN: Gave, John. (Laughs.)

MS. CLIFT: Yeah.

MR. MCLAUGHLIN: If they haven't, they all will now! (Laughter.)

MS. CLIFT: Yeah. (Inaudible.)

MR. MCLAUGHLIN: How do you spell "Halliburton," right?


MR. MCLAUGHLIN: Issue three: Vlad the Impaler. Russia may be on the brink of political and financial crisis. Last Saturday, in a scene out of James Bond, masked men arrested Mikhail Khodorkovsky, Russia's richest man, an $8 billion oil oligarch and political opponent of Vladimir Putin. At 5 a.m. on a lonely airfield in Siberia, as he stopped -- stepped off his private jet, he was charged with fraud and tax evasion, and whisked away to a Moscow jail.

This set off a chain reaction in Russia. The trade index tumbled. Putin's chief of staff, Aleksander Voloshin, resigned in protest. Foreign investment deals stopped dead in their tracks. The Russian government froze 44 percent of shares in Khodorovsky's company, Yukos, currently involved in merger talks with ExxonMobil and ChevronTexaco. Now Russia's prime minister, Mikhail Kasyanov, has pitched himself against Putin and stated his deep concern with the Yukos crackdown.

Question: Is Russia sinking back into a KGB-style government, crushing political opponents and free market reformers, or is this arrest warranted, and is it an isolated event, Mort?

MR. ZUCKERMAN: Well, I don't think it's an isolated event. And I don't think it's warranted. It is warranted in the sense that I'm sure he broke laws back six and seven and eight years ago, as they all did. It is clear that he was selectably the target of this law because he was somebody who was supporting two of the major political parties opposing Putin in the Duma election. It is an expression of Putin's sense of insecurity about how that Duma election is going, because this guy's got enough money to really affect the election.

And the fact is that I don't think Putin anticipated both the political consequences and the economic consequences. To basically lose your chief of staff and to get the prime minister, Kasyanov, to speak out against you is an extraordinary thing in a Russia which is so completely dominated by Putin in terms of the way the government works.

MS. CLIFT: Well, even --

MR. ZUCKERMAN: And I think this is a very dangerous trend, because it is going to have an amazing economic impact on Russia over time. Foreign investors are going to be very wary about the repetition of this kind of stuff.

MR. MCLAUGHLIN: Well, let me set you straight, all right? Russia is dominated by oligarchs who have created a parallel state, Mort. They buy off officials, judges, political parties and the media to broaden their control. The oligarchs are largely monopolists who purchased, at kopecks on the ruble, former Soviet monopoly enterprises. For Russian capitalism and democracy to progress, Putin has to tackle the monopolists and the oligarchs just as Teddy Roosevelt did.

MR. BUCHANAN: Exactly.

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

MR. BUCHANAN: Because he's a trust-buster. These are the malefactors of great wealth. These are the robber barons. He's going after them, and he's doing it in his own KGB-style.

MR. MCLAUGHLIN: Which side is the public on in Russia?

MR. BUCHANAN: My guess is they're on the side of Putin.

MR. MCLAUGHLIN: They're on the side of Putin. They have no special love for Khodorkovsky.

MR. ZUCKERMAN: I agree. I agree with that.

MS. CLIFT: Even rich, corrupt oligarchs don't get locked up without due process if you're in a democracy.

MR. BUCHANAN: Well, you know --

MS. CLIFT: And President Bush is looking the other way because --

MR. BUCHANAN: He should look the other way!

MS. CLIFT: Yeah, but this oligarch --

MR. BUCHANAN: We've got big fish to fry in Russia, a lot bigger than Khodorkovsky!

MS. CLIFT: -- this oligarch has pals on K Street, and he's making a lot of noise about it.

MR. MCLAUGHLIN: Who will prevail? One-word answer. Putin or Khodorkovsky?



MS. CLIFT: Putin for the moment.


MR. BLANKLEY: Putin in the short term.


MR. ZUCKERMAN: Putin. You know, you don't cross the river or -- (laughter) -- and you don't cross the river until you've quieted the alligator.

MR. MCLAUGHLIN: Putin. It's a full deck.

We'll be right back with predictions. (Laughter.)


MR. MCLAUGHLIN: Out of time. Happy holiday weekend. Trick or treat! Bye-bye.


MR. MCLAUGHLIN: Issue four: Not married with children.

MR. : (From videotape.) Dearly beloved, we have come together in the presence of God --

MR. MCLAUGHLIN: National Marriage Protection Week has just ended, and the struggle to save the institutions of marriage and the family goes on. This time, the villain is not divorce, or drugs or alcoholism. The developing, and largely unnoticed, threat to marriage and family today is cohabitation. A cohabiting arrangement consists when two people in a sexual relationship with each other live together under the same roof and are not married to one another.

In 40 years, cohabitation has increased an astonishing 1,000 percent, from 439,000 couples in 1960 to 4,736,000 in the year 2000. More than 40 percent of cohabiters have at least one biological or step-child under the age of 18. In the last 16 years, that percentage has nearly doubled.

President Bush supports long-term wedlock. He has reduced taxes for married couples and is offering $300 million in marriage support funding. But Unmarried America, an equal rights group, says that federal marriage incentives are unfair and unwise. Eighty-six million tax-paying, unmarried Americans don't benefit from federal marriage bonuses, and in many instances these bonuses may help sustain married households that are harmfully dysfunctional.

What's the difference between promoting marriage and promoting the family?


MR. BLANKLEY: Well, look. It's pretty --

MR. MCLAUGHLIN: Don't all talk at once. (Laughter.)

MR. BLANKLEY: It's pretty similar. The idea of the government giving a tax break to people who have children makes a lot of sense because it costs a lot, as everybody knows, to raise kids, and we don't have a future without our kids. So the complaints of people who aren't having children that they're getting a bum break I don't think is a valid one.

MS. CLIFT: I always thought that conservatives were the ones who said the tax code shouldn't be used for social engineering, except it's to advance the goals that you-all espouse.

MR. BLANKLEY: You mean like having a future? Yeah, we favor that one.

MS. CLIFT: Well, I think that single people also need to get health care and need to pay a certain amount --

MR. BLANKLEY: But if they're not contributing to the next generation, then they're not contributing as fully as people who are having kids.

MS. CLIFT: Yeah, but we have this population --

MR. BLANKLEY: And given the cost of raising kids --

MS. CLIFT: We have overpopulation, and at some point --

MR. BLANKLEY: We don't have an over-population, we have an under-population.

MR. BUCHANAN: (Inaudible) -- population's dying out.

MS. CLIFT: We have 6 billion people on the planet, and --

MR. BLANKLEY: Oh, I was talking about Americans.

MS. CLIFT: Well, we consume 80 percent of the resources, so maybe we ought to calm down a little bit.

MR. BLANKLEY: We produce more than that.

MR. BUCHANAN: John, the family is the cinderblock, the building block of society. If it crumbles, the whole society is going to crumble, which is happening gradually.

MR. MCLAUGHLIN: But is marriage --

MR. ZUCKERMAN: Wait a minute.

MR. MCLAUGHLIN: Is marriage --

MR. ZUCKERMAN: Wait a minute! Wait a minute.

MR. BUCHANAN: Only one in four households is a married couple with children today. That's not a good sign.

MR. MCLAUGHLIN: Your friend Dobson promotes the cohesion of the family. He doesn't say anything about marriage.



MR. BUCHANAN: Dobson. Husband and wife and children. That's what he promotes.

MS. CLIFT: You can define family in other ways.

MR. ZUCKERMAN: What has happened is that women have jobs, they can work, they can support themselves, they also can control their pregnancy. And that means we're going to have many more women living alone and living separately and --

MR. BUCHANAN: Yeah, but your population is dying out.

MR. MCLAUGHLIN: Doesn't the high divorce rate show that the constraints of marriage has nothing to do with family cohesion?