DATE: FRIDAY, MAY 13, 2005

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MR. MCLAUGHLIN: Issue One: Bolton Unchained.

SEN. GEORGE VOINOVICH (R-OH): (From videotape.) This is not the behavior that should be endorsed as the face of the United States to the world community in the United Nations. Rather, Mr. Chairman, it is my opinion that John Bolton is the poster child of what someone in the diplomatic corps should not be.

MR. MCLAUGHLIN: Senator George Voinovich has not changed his mind from three weeks ago about John Bolton, the president's nominee to be U.N. ambassador. Nevertheless, the Senate Foreign Relations Committee voted 10-8 to send Mr. Bolton before the full Senate for a vote, without a committee recommendation and without a vote on a recommendation. But make no mistake: Mr. Bolton has his skilled defenders.

SEN. GEORGE ALLEN (R-VA): (From videotape.) We are not electing Mr. Congeniality. We do not need Mr. Milquetoast in the United Nations. We're not electing Mr. Peepers to go there and just be really happy and drinking tea with their pinkies up and just saying all these meaningless things when we do need a straight talker. And someone is going to go there and shake it up, and it needs shaking up.

MR. MCLAUGHLIN: Question: What's the impact of sending Bolton's nomination to the floor without a recommendation? Pat Buchanan.

MR. BUCHANAN: On a pass-fail system, John, this is an incomplete. I think the effect of it is really to put a little cloud over Mr. Bolton, but I still believe Bolton is going to win approval on the floor by some 50-plus votes, and I think he goes to the U.N. And I think the president has been mussed up just a minor bit, Bolton a pretty good bit, but I think he's still going to be our U.N. ambassador.

MR. MCLAUGHLIN: Well, Republicans could defect. So could Democrats from their position.

MR. BUCHANAN: No, I don't think so. I think it's going to happen.


MS. CLIFT: Well, I think this is about the best possible outcome from the Democratic point of view, because you have a Republican, Senator Voinovich, saying that this is a terrible appointment. You have the secretary of State, Condoleezza Rice, trying to reassure Senator Voinovich, saying, "Oh, don't worry, we'll keep him on a short leash." So you have Republicans mussing up his credibility as he goes forward.

And it also keeps -- the Democrats can now separate out the issue over judges. I mean, after all, Bolton is not a lifetime nomination. He'll come and go, and maybe we'll have a lot of fun with him as he shoots off his mouth. And all this business about how tough he is -- he's tough to underlings. I don't see any evidence of him being tough going up the chain of command.

MR. MCLAUGHLIN: Okay, enough opining. Vox populi: Let the people decide. Watch this.

(Begin videotaped excerpt of exchange between Mr. McLaughlin and John Bolton on McLaughlin Group in August 2001.)

MR. MCLAUGHLIN: Does our government ever have the power to sign away constitutional rights, any constitutional right, in a global accord? I ask you, John Bolton. Now, we know that you have first- hand knowledge of this. MR. BOLTON: We have no --

MR. MCLAUGHLIN: Why do you have first-hand knowledge?

MR. BOLTON: Because I was at the United Nations giving the good news of the Bush position to a happy audience there in the general assembly. The idea that the United States should modify its constitutional structures or its domestic policy, largely through international agreement rather than through domestic political debate, is fundamentally wrong. And that was the point we were trying to make in New York.

MR. MCLAUGHLIN: If this had been the Clinton or the Gore administration, do you think the United States would have taken a different view?

MR. BOLTON: I think that substantively their position would have been the same, but I think they would have gone out of their way to try to appeal to the audience, as they signed the International Criminal Court statute, although not intending to ratify it, as they signed the Kyoto protocol, although not intending to ratify it. I just think that was their PR spin on things.

Bad treaties from little acorns grow, and this is how it works in the U.N., starting with a small reference in an obscure document growing into treaty negotiations that become binding. And our effort was to step on the acorn at the front end.

The question for the United States's sovereignty, which is all that I really care about, is whether we maintain our constitutional structure of government, whether we decide questions that affect us, or whether we lose our autonomy and our popular sovereignty in a web of international agreements and organizations.

(End of videotape.)

MR. MCLAUGHLIN: Question: Bolton is making a larger point about the U.N. What is it, Tony?

MR. BLANKLEY: Yeah, it's an important larger point, which is that American sovereignty is absolute. The U.N. is not any form of a world government.

MR. MCLAUGHLIN: Well, we know -- beyond that point.

MR. BLANKLEY: But rather it's merely there to be used by us as we might deem. But we're never going to submit ourselves to final decisions by the U.N.

MR. MCLAUGHLIN: We know all that. But he makes another more subtle point there. What is it? He says that if it were in the hands of Gore and Clinton, they would have gone along with the Kyoto treaty knowing that it would never be ratified. Bolton says he doesn't want to do it that way. Why doesn't he want to do it that way?

MR. ZUCKERMAN: Well, because what happens is, in a sense, you raise a level of expectations which is never delivered upon by the American government.

MR. MCLAUGHLIN: Then what happens?

MR. ZUCKERMAN: Well, then we get into trouble all around the world because we are not conforming to the world's view.

MR. MCLAUGHLIN: What happens to the U.N. body if that is continuously the way we treat it? Does it not trivialize the U.N.?

MR. ZUCKERMAN: Absolutely it trivializes it. In one sense, it weakens the U.N. And what he is trying to do is to say, "Let's have an honest relationship with the U.N." That's his basic approach.

MR. MCLAUGHLIN: Well, that's a pretty good line of thinking, is it not?

MR. ZUCKERMAN: Yes, I think it is a good line of thinking.

MR. MCLAUGHLIN: So he really is trying to protect the U.N. against these subterfuges.

MR. BUCHANAN: He wants honesty and he wants clarity, and he does not want to surrender any constitutional authority. But he's more open and honest than Clinton and Gore.

MS. CLIFT: I'm sorry, what comes across is a total disdain for any kind of collective action. And we're in it totally for ourselves, when the truth is we live in a world --


MS. CLIFT: We live in a world -- excuse me.

MR. MCLAUGHLIN: Tony, you're lunging out of that chair.

MS. CLIFT: We're living in a world where we share an environment and -- MR. BLANKLEY: You don't think we should be interested in America's interests first?

MS. CLIFT: We should be interested in America's interests, but --

MR. MCLAUGHLIN: Okay, wait a minute.


MR. MCLAUGHLIN: There was another member of the McLaughlin Group that supports Eleanor's view, and this is from the August 2001 Group session. He tells us what he thinks about Undersecretary Bolton's view; Edward Gresser, Progressive Policy Institute.

EDWARD GRESSER (PROGRESSIVE POLICY INSTITUTE): (From videotape.) I think what the undersecretary is saying is something like what you would have heard from Calvin Coolidge and Herbert Hoover and the Republicans of the '20s.

MR. MCLAUGHLIN: What about that?

MR. BLANKLEY: Coolidge was Reagan's favorite president, and for good reason. That guy was not Reagan's favorite. But look, obviously, if you want to characterize and slander people, as that person did, you can call him Coolidge. But the fact is, the fundamental principles of American sovereignty are no longer honored by elements of the Democratic Party, and Bolton is one of the men who's standing up and defending that. And that's why he's going to get --

MS. CLIFT: When you talk about slandering people, it's Bolton who wants to bully the rest of the world. And, Tony, if the rain forest goes in Latin America, it's going to hurt you and your grandchildren as well. We have collective interests around the world and we have collective interests in trying to contain --

MR. BUCHANAN: Bolton's job --

MS. CLIFT: -- violence everywhere, in Darfur and lots of other places.

MR. BUCHANAN: Tony's right. Look out for America first at the United Nations. And it is subordinate to the United States.

MS. CLIFT: The America First movement, Pat, died a long time ago.

MR. BUCHANAN: But it's coming back. (Laughs.)

MR. MCLAUGHLIN: Okay. What happens to Bush if he loses this nominee? MR. ZUCKERMAN: Well, I think Bush would really be damaged, not fundamentally damaged, but he would be damaged politically not to be able to get his own representative through a Senate controlled by the Republican Party. It would do real damage to Bush, I think.

MR. MCLAUGHLIN: Do you think it was a mistake for him to invest so much political capital in this candidacy?

MR. ZUCKERMAN: Well, once he made the appointment, I don't think he anticipated that there would be this kind of difficulty getting it through the Senate Foreign Relations Committee.

MR. MCLAUGHLIN: It's a bold gamble, is it not? It's like a game of blackjack. You're holding 17 in your hand and you say to the guy, "Hit me again."

MR. BUCHANAN: Once he appointed him, Bush does the right thing. He goes to the wall for his people and he won on it. He did a great --

MR. MCLAUGHLIN: Oh, Pat, please.

MR. BUCHANAN: John, you recommended he dump him.

MR. MCLAUGHLIN: I mean, your gushing is just excessive here.

MR. BUCHANAN: Two weeks ago --

MR. MCLAUGHLIN: Two exit questions. First --

MR. BUCHANAN: Two weeks ago, you said, "Dump him."

MR. MCLAUGHLIN: I said the political capital expenditure was not worth it.

MR. BUCHANAN: You said, "Dump Bolton" in --

MR. MCLAUGHLIN: All right, now, listen to me. You've got to remember, he hasn't won this yet. First exit question: Is Bolton sufficiently fit or unfit to be U.S. ambassador to the U.N.? Pat.

MR. BUCHANAN: He's overqualified.

MS. CLIFT: I'm on the side of Senator Voinovich.


MS. CLIFT: It's exactly the wrong message to send to the world.

MR. MCLAUGHLIN: Fit or unfit?

MR. BLANKLEY: Well, he's obviously fit. Whether he's going to be effective -- I don't know who's going to be effective there. MR. MCLAUGHLIN: What's your sense? Is he fit?

MR. ZUCKERMAN: I think he's fit as well, absolutely.

MR. MCLAUGHLIN: Yeah, I'm surprised that he was, as good as he was, there.

And I think he's pretty good. And if the president wants a conservative, why shouldn't he have a conservative in the U.N.?

MR. ZUCKERMAN: I think it was --

MR. MCLAUGHLIN: So I think -- I have to say, on merits, I think he's fit.

Second question: Will Bolton be confirmed by the Senate? Yes or no?

MR. BUCHANAN: Yes. And why did you recommend Bush dump him, John, if you think he's fit?

MR. MCLAUGHLIN: Because I don't think it's worth the political capital.

MR. BUCHANAN: You said he's fit and qualified and he nominated him, and you want him to run away.

MR. MCLAUGHLIN: Now, wait a minute. I didn't quite say that.

MR. BUCHANAN: Yes, you did.

MR. MCLAUGHLIN: I did not quite say that. Well, I say he's fit on the basis of his argumentation. But clearly there are other problems with him. He tends to read people out. But what impressed me was Robert Kimmitt's endorsement of him. Robert Kimmitt has worked with him. Now, it's true that Robert Kimmitt just got himself a job over at the Treasury Department. But then there's Lawrence Eagleburger.

MR. ZUCKERMAN: Lawrence Eagleburger.

MR. MCLAUGHLIN: Lawrence Eagleburger, I think, correctly said you can read somebody out, and maybe that is a characteristic to be disapproved of, but it's not sufficient reason for depriving the U.N. of his candidacy.

MR. ZUCKERMAN: If you were going to --

MR. MCLAUGHLIN: That's Lawrence Eagleburger. MR. BUCHANAN: Why did you recommend he be dumped?

MR. MCLAUGHLIN: Because I don't think it's worth the political capital.

MR. BUCHANAN: All right.

MR. MCLAUGHLIN: Eleanor. I don't think it's worth the risk. And he's still going to lose political capital whether he wins or not. And it's a win for the Democrats whether he wins or loses.

MS. CLIFT: Right.

MR. MCLAUGHLIN: Why not have this guy, you know, the Tasmanian devil, running the corridors of the U.N., maybe shoving Valentines under their door and a rose in his hair? Who knows? I mean, what's going to happen with that?

MS. CLIFT: I sure don't feel better knowing that Condoleezza Rice feels she has to keep him on a short leash. She'd better watch out. He might turn around and bite her.


MS. CLIFT: She didn't want -- excuse me. Excuse me. Let me finish.

MR. MCLAUGHLIN: Let her finish. Let her finish.

MS. CLIFT: She did not want him as her deputy at the State Department. She nixed him for that.


MS. CLIFT: This is the price she had to pay to take him. A lot of people --

MR. MCLAUGHLIN: I've got another question.

MS. CLIFT: If this were a secret vote, he would not get through.

MR. MCLAUGHLIN: Did Rumsfeld want him?

MS. CLIFT: I don't think Rumsfeld wanted him either.

MR. MCLAUGHLIN: The answer is no. Who wanted him?

MS. CLIFT: Dick Cheney.

MR. ZUCKERMAN: Dick Cheney.

MS. CLIFT: He's Dick Cheney's man. MR. MCLAUGHLIN: How about Lynne Cheney?

MS. CLIFT: Okay.

MR. MCLAUGHLIN: You heard it here first.

MS. CLIFT: Pillow talk, fine.

MR. MCLAUGHLIN: Get to the point here.

MR. BLANKLEY: The point is that Condoleezza Rice never used the phrase "short lease." This is something the Democrats are using to mischaracterize what she said.

MR. MCLAUGHLIN: She did not want him at the State Department.

MR. BLANKLEY: No, I'm not talking about -- I'm talking about the appointment to the United Nations. She said, "We're going to be working together as a team," which the Democrats are now misrepresenting as a short lease.

MR. MCLAUGHLIN: Quickly, we've got to get out. We're over.

MR. ZUCKERMAN: I just want to point out, Madeleine Albright did not want Dick Holbrooke as the representative to the U.N., right?


MR. ZUCKERMAN: And he is not exactly Mr. Congeniality. His effectiveness is not just a function of whether or not he is the most -- since he is one of the more difficult people to work with. But he was still quite effective. And Bolton will be equally effective.

MR. MCLAUGHLIN: I think that --

MR. ZUCKERMAN: And he will be approved.

MR. MCLAUGHLIN: I think that the subtext of what Bolton said on this program is that he really wants the U.N. to succeed in what he conceives to be the U.N.'s true mission.


MR. MCLAUGHLIN: I think he's going to pass. How many -- we've got one defector here, you, Eleanor.

MS. CLIFT: No, I think he's going to squeeze through, but I don't think he's going to excel in the job.

MR. MCLAUGHLIN: Issue Two: Kiss Your Pension Goodbye. ROGER HALL (RETIRED PILOTS' ASSOCIATION): (From videotape.) United is bent on terminating the plans. They just want to get out of the pension business. It's like a scorched-earth policy.

JAKE BRACE (UNITED AIRLINES CFO): (From videotape.) We are doing what we need to do to make United Airlines successful for the long-term. That's what we've been focused on the entire case. That's what this is all about.

MR. MCLAUGHLIN: It's the biggest pension collapse in U.S. history -- $10 billion -- pension money promised by United Airlines to former and current employees, now defaulted. United went bankrupt two and a half years ago. To help it get out of bankruptcy, a federal judge ruled this week that United can terminate its pension plan.

Namely, United does not have to pay out the $10 billion. Instead the money will be paid out by the government's pension insurance agency. It's called the Pension Benefits Guaranty Corporation, the PBGC. But the PBGC won't cover the whole amount. The Pension Benefits Guaranty Corporation is $23 billion in debt, meaning many of United's 134,000 pensioners will have their benefits cut in half.

BRAD BARTHOLOMEW (THE NEWFOUNDLAND GROUP): (From videotape.) For employees that are losing their pension, this is a horrible event. It's a life-changing event. And it's promises that have been made to them for 10, 20, 30 years that are now being broken.

MR. MCLAUGHLIN: United's pension catastrophe won't be the last domino to fall. Delta Airlines may seek a bankruptcy bailout on its pension plan. And the pension squeeze is taking its toll on other industries as well, leaving the nation's 44 million pensioners wondering whether years of hard work will be eased by a predictable monthly check.

Question: Is United's reneging on its pension plan an isolated case? Eleanor Clift.

MS. CLIFT: No, they're going to be lining up. You pointed out, Delta is already queuing up. Look, this is a dismantling of the retirement systems that we put in place in the 20th century. And you can make the argument that we can no longer afford these supposedly generous benefits, the defined benefits. But you don't change the rules in the middle of the game. You tell future workers, who have time to prepare, that they can't count on these benefits. But you don't tell 60-year-olds --

MR. MCLAUGHLIN: Well, who's changing the rules?

MR. ZUCKERMAN: Who's changing the rules? MS. CLIFT: United is, by bailing out.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: You mean, the corporations should stay with it, no matter what.

MS. CLIFT: Well, they should say to future workers, "We can't keep the faith."

MR. MCLAUGHLIN: Should they continue to pay benefits when they're hemorrhaging?


MR. ZUCKERMAN: They're bankrupt.

MR. BLANKLEY: They're going bankrupt. And whatever their best intentions may or may not be, there's a bigger problem than this. The government fund is underfunded, and Congress and the president have not agreed to enough money to start properly funding the backup fund.

MR. MCLAUGHLIN: So you want taxpayer money to go into this.

MR. BLANKLEY: It's already being negotiated on the Hill.

MR. MCLAUGHLIN: Yeah. Well, why do you want taxpayer -- the corporations now underwrite the PBGC.

MR. BLANKLEY: I'm telling you that the existing entity has to be funded, because the legislation requires it. And now there's negotiations on the Hill and the White House for how much they're going to put in. And they haven't agreed to put enough in.


MR. BLANKLEY: The problem is that it's going to keep rippling through, (like with?) General Motors.

MR. ZUCKERMAN: It is not --

MR. MCLAUGHLIN: Do you have a -- (inaudible)?

MR. ZUCKERMAN: It is not only going to affect the airline industry. It's going to affect the automobile industry. And at some point, every old-line manufacturing industry is going to be in trouble. And we have no way of guaranteeing the pensions that were previously guaranteed by these companies. So we have a huge -- the obligation alone from the auto companies is $45 billion to $50 billion, which is more than twice what this is. MR. MCLAUGHLIN: I want you to take -- since you've now got the floor, I want you to take a larger view. I want you to tell me what role globalism plays in this.


MR. MCLAUGHLIN: By that I mean --

MR. BUCHANAN: Huge, John.

MR. MCLAUGHLIN: -- that corporations now have to be lean and mean, do they not?

MR. ZUCKERMAN: Absolutely. But --

MR. MCLAUGHLIN: And that means that they're going to shed their pensions, are they not?

MR. BUCHANAN: They're going to shed their workers, exactly.

MR. ZUCKERMAN: They're going to --

MR. MCLAUGHLIN: Wait a minute.

MR. ZUCKERMAN: They have more than one problem. They're going to have to redo their union agreements. If the unions don't go along with it, they're going to force a lot of these companies into bankruptcy. It's not just the pension obligations. It's union work rules. And this is going to create a crisis in all the old-line industries.

MR. BUCHANAN: John, it's legacy costs.

MR. MCLAUGHLIN: Let Pat answer.

MR. ZUCKERMAN: It's basic fact of life.

MR. MCLAUGHLIN: What was that again?

MR. ZUCKERMAN: It's not blaming the unions. As you say, there is competition from the Japanese, for example, in the automobile business.


MR. ZUCKERMAN: They are putting General Motors and Ford -- those two companies are going to have to merge to survive.


(Cross-talk.) MR. MCLAUGHLIN: Wait a minute. Wait a minute. What's the psychological impact if General Motors goes bankrupt, on this country and the world?

MR. ZUCKERMAN: It will be a huge impact on this country. General Motors was the icon of American manufacturing for 50 years.


What message will be transmitted to the world?

MR. ZUCKERMAN: The message is that we cannot compete with the world. And that is going to be --


MR. MCLAUGHLIN: This is a concession to the superiority -- the putative superiority of the Japanese and the --

MR. ZUCKERMAN: We've seen it in the steel industry. We're now seeing it in the automobile industry.

MR. MCLAUGHLIN: Let Pat in here.

MR. BUCHANAN: Look, these are called legacy costs. It's taken down the airlines. It's taken down the steel industry. It's taken down the auto industry. Mort is right. Every big manufacturing concern it overpromised isn't going to be able to pay. They're going to raise the pension benefit so me and people like you are going to have to pay more. They're going to have to bail it out.

And globalism -- I'll tell you what it's doing, John. Every single manufacturer will get rid of its American workers because they carry legacy costs. You go to China -- no pensions. There's no health care. They're all leaving. It's free trade and globalism.

MR. MCLAUGHLIN: Wait a minute. If there's any doubt about whether the Pension Benefits Guaranty Corporation, the PBGC, can go dry, here's Bradley Belt, the executive director, in a heartstopping interview.

BRADLEY BELT (PENSION BENEFITS GUARANTY CORPORATION): (From videotape.) When we run out of money, which we will do at some point in time without a change in law, we would no longer be able to send out benefit checks.

MR. MCLAUGHLIN: Exit question: Which crisis is more critical, Social Security or national pension collapse? Pat Buchanan.

MR. BUCHANAN: Pension collapse is far more immediate, and there will have to be a bailout. It is just like the savings and loan, only about 10 times as large. MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: I agree with that. And fiddling with Social Security now is a luxury. But one thing we know: We need that safety net.


MR. BLANKLEY: It's all part of the same problem. In the mid to late 20th century, the West promised itself more retirements than it could afford, both in the public and the private sector.

MR. MCLAUGHLIN: Equally critical?

MR. BLANKLEY: It's all part of the same problem. That's why the Germans are cutting back on their pensions.

MR. MCLAUGHLIN: Well, what do you want? Do you want Bill Thomas to go forward with his plan of integrating all these pension programs?

MR. BLANKLEY: John, it's not what I want. It's the reality. There's not enough money to pay all these benefits. Boomers are going to retire --

MR. MCLAUGHLIN: Mort Zuckerman, which is more critical?

MR. ZUCKERMAN: Well, this one is more critical because it's shorter-term.


MR. ZUCKERMAN: And it's large-scale. And we are on the verge of seeing a number of other companies go bankrupt. So we must do something about this literally in the next 24 months.

MR. MCLAUGHLIN: You know if they go to the variable rate to determine the premiums that the corporations have to pay, that their junk-bond status, as is the case with General Motors, will be an enormous burden on them and force them into bankruptcy.

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: So the proposed resolution of the problem -- that is, by beating up on General Motors -- will mean more bankruptcies, and it will make the problem even more aggravated.

MS. CLIFT: I want to ask one question.

MR. ZUCKERMAN: You can't solve --

MS. CLIFT: Excuse me. I want to ask one question. It's my turn. It's my turn. MR. ZUCKERMAN: No, it's not. I'm not finished, Eleanor.


MR. MCLAUGHLIN: Quickly, quickly.

MS. CLIFT: Why is it the working men and women always get stuck with the short change here and the CEOs are making record amounts of money?

MR. MCLAUGHLIN: The answer to that is globalism.

Issue Three: Joy Ride.

(Video clip of President Bush and President Putin in vintage Russian car.)

MR. MCLAUGHLIN: Drive my car, my prize 1956 mint-condition Volga. This inspired Bush-Putin photo op said more about their warm camaraderie than thousands of words. Driving lessons aside, however, President Bush's visit to Eastern Europe was no joy ride. His five- day trip to Latvia, Russia and Georgia aimed to keep relations with Russia on an even keel, and at the same time offer a stern admonition to Putin not to centralize power.

PRESIDENT BUSH: (From videotape.) It is the strength of Russian democracy that will determine the greatness of Russia. And I believe the Russian people value their freedom and will settle for nothing less.

MR. MCLAUGHLIN: But Vladimir Putin is not one to give up the -- (inaudible).

RUSSIAN PRESIDENT VLADIMIR PUTIN: (From videotape.) In the United States, you first elect the electors and then they vote for the presidential candidates. In Russia, the president is elected through the direct vote of the whole population. That might be even more democratic. And you have other problems in your elections. Four years ago, your presidential election was decided by the court. But we are not going to poke our nose into your democratic system, because that's up to the American people.

MR. MCLAUGHLIN: Question: Does Putin have a good point? Is Bush in any position to lecture Putin about democracy? I ask you, Mort.

MR. ZUCKERMAN: Oh, absolutely. There's no comparison between American democracy and what's going on in Russia. The comparison is ridiculous.

MR. MCLAUGHLIN: Do I have to remind you that the year 2002, we had an election, and that -- excuse me, the year 2000 we had an election? And there are millions of Americans today who do not accept the validity of that outcome. Millions of Democrats do not accept it. MR. ZUCKERMAN: (Inaudible.)

MR. MCLAUGHLIN: Exit: Who won this round?

MR. ZUCKERMAN: I have to say one thing. At least it was the rule of law that determined the outcome of that, which is not what happens in Russia.

MR. MCLAUGHLIN: Who says so?


MR. MCLAUGHLIN: Putin has his answers to you, too.

MR. ZUCKERMAN: He has answers. They're just not valid.

MR. MCLAUGHLIN: Exit question: Who won the round, Bush or Putin?

MR. BUCHANAN: Bush won the week with a great speech in Latvia.

MS. CLIFT: Oh, come on.

MR. BUCHANAN: And his friendship with Putin is maintained with that car ride. He had a tremendous week.

MR. MCLAUGHLIN: The speech, the speech. Talk is cheap, Pat. Talk is cheap.

MR. BUCHANAN: The Yalta speech was great.

MS. CLIFT: Putin won. He's dismantling democracy in Russia, and Bush is riding around having a wonderful time and trashing FDR.

MR. MCLAUGHLIN: What do you think?

MR. BLANKLEY: I don't think there were winners or losers.

MR. MCLAUGHLIN: Oh, here we go. Here we go.

MR. BLANKLEY: Well, I'm going to tell you, Bush got what he wanted to get accomplished and both of them got what they wanted, which is not to break up, because they have to have an alliance over terrorism.

MR. MCLAUGHLIN: Who won the week? MR. ZUCKERMAN: Bush still wins the week on this. The problem is, the relationship between the two is going to go at the speed of that car.

MR. MCLAUGHLIN: The answer is it was a draw.

Issue Four: Snubbing America.

The weather is finally heating up. And for many of the loveliest spots across the country, that means one thing: Tourists. Millions of foreign visitors bring billions of dollars into the U.S. every year and spend, spend, spend -- but not this year. The travel industry is saying that foreign travel to the U.S. is down, way down, with the U.S. market share of foreign visitors dropping 38 percent in the last 12 years.

The industry says two factors are to blame: One, more bureaucratic visa red tape; and two, more importantly, America's terrible image abroad.

Question: Given the highly favorable exchange rate between the Euro and the dollar, why isn't America attracting more tourists? Pat Buchanan.

MR. BUCHANAN: Well, John, one of the reasons -- two of the reasons are the reasons you gave. But there's also another reason, John. There are more places all over the world that are accessible to people to go to, and they come out each year. And so people go there. America is still expensive. All the Asian currencies are tied to the dollar. The Europeans -- there's probably a good deal to what you say, a dislike of the good old USA.

MR. MCLAUGHLIN: Pat, it's like getting a 30 percent discount for a European, in view of the change in the money, to come to the United States. And they're not coming.

MR. ZUCKERMAN: Look, I don't understand that. In fact, our tourism was up 12 percent last year and they expect it to be up 16 percent this year to a record 52 million visitors.

MR. MCLAUGHLIN: What is this? Are you doubting the statistics that I put on the board?

MR. ZUCKERMAN: All statistics have meaning. Some of your statistics have more meaning than others. All I'm saying to you is that it's coming back. We, after all, did suffer 9/11, and a lot of people decided not to come to this country. If you want an example, just see what happened to Disney World and all of those places. Their attendance dropped by 25 percent.

MR. MCLAUGHLIN: Are you saying to me that statistics don't lie but statisticians do? MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: Is that what it is?

MR. ZUCKERMAN: That is my experience.

MR. MCLAUGHLIN: Do you want to comment on the xenophobia that's developing in the United States and is perceived by tourists? Xenophobia means "We don't want these people." Is that what we're projecting to the world by our behavior?

MR. BLANKLEY: Now you're taking French xenophobia of America and accusing us of inducing French xenophobia. I mean, this will --

MR. MCLAUGHLIN: Do we look like we're xenophobic to an outsider, that we don't want foreigners here?

MR. BLANKLEY: I'm no longer an outsider. I don't know.

MS. CLIFT: Well, we've put up an awful lot of security barriers, and we make it harder for people to travel here. But I still --


MR. MCLAUGHLIN: We have Karen Hughes in the White House to project an image of --

MS. CLIFT: No. She's going to the State Department, but she doesn't get there till September.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Palestinian moderates and Israelis scared to death of the elections because they will raise -- Hamas will win. Palestinian elections will be postponed.


MS. CLIFT: The man who will succeed Tom DeLay was sitting next to him at the glittery tribute in Washington, and that's Roy Blunt of Missouri.


MR. BLANKLEY: That's wrong. He doesn't need a replacement.

MR. MCLAUGHLIN: Keep going.

MR. BLANKLEY: But Tony Blair --

MR. MCLAUGHLIN: She didn't say that.

MR. BLANKLEY: Yes, she did. MR. MCLAUGHLIN: Tony, don't lunge out of your chair at her either. (Laughter.) Go ahead. Keep talking, quickly.

MR. BLANKLEY: Tony Blair, contrary to what people are saying, is going to hold on to the premiership for at least a couple of years.


MR. ZUCKERMAN: Arlen Specter will retire shortly and be replaced by Governor Bob Casey, former Governor Bob Casey.

MR. MCLAUGHLIN: Why would they want to --

MR. BUCHANAN: (Off mike.)

MR. MCLAUGHLIN: What, are we having a private conversation here? Donald Rumsfeld will stay on as Defense secretary for the entire Bush second term. Don't forget, you can watch the McLaughlin Group on streaming video worldwide at

Next week, Bill Frist. Does he ban the judicial filibuster and thus protect President Bush's two future Supreme Court nominees? Coming soon: Any "faulta" at Yalta? Bye bye.