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MR. MCLAUGHLIN: Issue one: Budget buckle.

PRESIDENT BILL CLINTON: (From videotape.) This is a very, very good day for America.

I would like to thank the leaders of the Republican Party who made these agreements with us.

SENATOR TRENT LOTT (R-MS, Senate majority leader): (From videotape.) I think it's not a question of who won and who lost. If the American people won, that's all we needed to know.

MR. MCLAUGHLIN: They came, they saw, they caved. Republicans on Capitol Hill this week went into full white-flag retreat. In the frenzied midnight budget battles to end the 105th Congress, the GOP leadership handed one victory after another to Bill Clinton: $1.1 billion to hire 100,000 new teachers; $6 billion in emergency aid for farmers; $18 billion for the IMF; and the $80 billion Republican tax cut cancelled, in the name of quote, unquote, "saving the budget surplus for Social Security."

Why did the Republicans fold? Intimidation. Even with Clinton on the ropes, Republicans were terrified of playing budget hardball with the ace who always wins -- at least in public opinion. A government shutdown three weeks before the election was the GOP's worst nightmare.

And there's more to the story. Even those issues that on budget terms Democrats lost, on PR terms they won, namely, no HMO reform, i.e., health care bill of rights; no tobacco legislation, no minimum wage increase, no campaign finance reform -- all snatched away by Republicans. Stay tuned for Democratic campaign ads on these populist causes championed by Clinton and company, and denied by the skinflint GOP.

Despite the strategic capitulations of the Republicans, House majority leader Dick Armey assured the country that the GOP held the line against Democratic attempts to raid the budget surplus.

REP. DICK ARMEY (R-TX, House majority leader): (From videotape.) We fought off a lot of insistence on increased spending. And I can tell you, Mr. and Mrs. America, for the most part, your surplus is still intact.

MR. MCLAUGHLIN: Republicans also boasted having gained more money for defense, $9-1/2 billion, the first increase of this magnitude in almost 15 years, and increased spending for anti-drug efforts.

Question: Will Democratic victories in the budget process, Pat, translate into Democratic victories November the 3rd, two weeks from next Tuesday, in the congressional elections?

MR. BUCHANAN: Look. There's no doubt the Democrats have really helped themselves, John. They have beaten the Republicans, horse, foot and dragoons. They've changed the subject from Monica over to this budget victory for them. They've energized their party. John, the GOP has a very serious problem. They took away the tax cut from the middle class and gave it to the IMF to bail out the hedge funds. They haven't cut a single agency. They broke the caps on the budget. Compared to the Republicans, the Redskins are having a good year. (Laughter.)


MS. CLIFT: The Democrats are in a much stronger position today than they were three weeks ago, thanks to Republican mistakes. First of all, Republicans overreached on impeachment, which has cast a huge shadow over this Congress. And secondly, the Republicans forgot, because they were so driven by their distaste for Clinton, they forgot that even in his weakened state, he has a lot more credibility than they do on issues like education.

But this victory is relative. It's going to contain damage. You know, the Democrats are not going to win seats in November.

MR. MCLAUGHLIN: Do you think that this uptick is faulty because the Democrats, on the basis of this uptick, are peaking too early? (Laughter.)

MR. BLANKLEY: No, I don't think they're peaking too early. I don't know that they're going to sustain this uptick. But what really happened in this little budget showdown is that each side took little policy plowshares out of it that don't mean much -- I mean, this is not a big policy fight -- and they're going to bang them into little political swords to try to take home and fight their battles with. So the Republicans got some useful little swords -- on crime, on defense -- and the Democrats got some useful little swords. I don't think on a policy basis this was a cave-in, because this wasn't about policy, it was about politics. But the Democrats had a good week, but they only had one week, and I think they would like to have had about three weeks to sustain this fight message in order to penetrate with the public.

MR. MCLAUGHLIN: Well, you seem to sound as though it factors out. Is that what you're saying? By the time we get to election two weeks from Tuesday?

MR. BLANKLEY: I don't think too many people are going to change their vote because of what happened and how it was reported this week.

MR. MCLAUGHLIN: What do you see here?

MR. O'DONNELL: I am stunned by Republicans' inability to describe victory. The biggest item that the president of the United States got in this budget was a billion dollars. A billion dollars for teachers. Back when the Democrats ruled this whole game, only four years ago, when I was on the Democratic staff in the Senate, the budget charts that were given to me, if it was a billion dollars, that was represented as an asterisk. It was so small, we didn't care about it. Staffers could put billion-dollar items in bills in those days. This is an amazing defeat for Democratic governance, which Bill Clinton claims to represent --

(Cross talk.)

MR. MCLAUGHLIN: Let him finish. Let him finish.

(Cross talk.)

MR. MCLAUGHLIN: Let him finish. I want to hear this.

MR. O'DONNELL: The Republicans have no rhetorical capacity to describe this as victory.

MR. MCLAUGHLIN: You mean they just don't know how to handle --

MR. O'DONNELL: They don't know when they've won, and they don't know how --

(Cross talk.)

MR. MCLAUGHLIN: Well, was there a strategic reason for muting any kind of ecstasy that they ought to be feeling? (Laughter.)

MR. O'DONNELL: Yeah. Now, the good thing about this for Republicans is that in fact this is about the outcome that the public wants. They want about this kind of governing. And the fact that the Republicans do comply with these "minimalistic" approaches that the president wants is something that the public --

MR. MCLAUGHLIN: What about no tobacco, no HMO reform, et cetera? Even those alleged -- those victories for Republicans, don't they score negatively with the voters?

MR. O'DONNELL: (No ?) -- they were all drowned by the impeachment debate. They weren't even part of this week's -- (word inaudible).

MS. CLIFT: Yeah. This is one place in the country where it always rains on Democrats. You know, the days when Democrats had lots of money to spend, Lawrence, those are gone. This is not the '60s or the '70s.

MR. O'DONNELL: (Laughs.) They certainly are.

MR. MCLAUGHLIN: When you say "this" --

MS. CLIFT: And frankly, when you --

MR. MCLAUGHLIN: -- do you mean "this set here"?

MS. CLIFT: Yes. Right. (Laughs.)

MR. MCLAUGHLIN: This is when it rains all the time on Democrats?

MS. CLIFT: All the time for Democrats. (Laughs.)


Republican grievance: Republicans say negotiation with Clinton is in itself a "mission impossible."

REP. ERNEST JIM ISTOOK JR. (R-OK): (From videotape.) When you are trying to negotiate with someone who is known for using deception -- deceiving his Cabinet, deceiving the American people, not being truthful in testimony under oath -- how do you negotiate with him? This is man who isn't even sure what the word "alone" means. It makes an extremely difficult negotiation to try to come up with language and approvals and agreements, when you know that the president is apt to put some strange twisted, distorted interpretation on how that will actually be put into practice.

MR. MCLAUGHLIN: Question: Does Istook have a point here? Now, you have been in negotiations with Bill Clinton. Is what he is saying substantially true? And does it create a dilemma of, you know, "What is he saying, and what's the best thing for me to do?"

MR. O'DONNELL: It's been true. And everyone's known it since 1993, when he did this flip on the BTU tax, which he kept secret from House members, as they were voting on it, knowing that Senate members never would vote on it.

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: Hold off for one minute. I want to ask Tony, because he's been in negotiations with him, too.

MR. BLANKLEY: Oh, yeah. I mean, Istook is correct in that you cannot believe what Clinton says. We were once in a meeting with him -- during the budget negotiations, he had agreed to seven years for the balanced budget. We took our cars from the White House to Capitol Hill; by the time we got there, Panetta was out talking about eight or nine years. (Laughter.)

(Cross talk.)

MR. BUCHANAN: John, let me --

MR. O'DONNELL: And it was a hard deal in the Oval Office, when he made it 20 minutes before.

MR. BUCHANAN: Look, look. I mean, you've got -- what we've got here is an excellent grasp of the little picture.

Take a look at the larger picture. Federal social domestic spending has never been a larger share of the GDP than it is now. Peacetime tax consumption of the economy has never been a larger share of the GDP than it's been now. And we are in peacetime, John. And I'll tell you, the Republicans have given up their one core issue, which is tax cuts.

MR. MCLAUGHLIN: Pat, you've been reading a lot of Jack Kemp, haven't you?

MS. CLIFT: Well -- wait. No, I want to --

MR. BUCHANAN: Let me say, Jack Kemp's right on this.

MR. MCLAUGHLIN: He's right on it?

MR. BUCHANAN: He's right on this one.

MR. MCLAUGHLIN: You mean the whole budget is too big?

MR. BUCHANAN: Jack Kemp, in criticizing this thing across the board and saying the Republicans walked away from their principles, he's dead right.

MR. MCLAUGHLIN: You mean principally because they didn't fight for the tax cut, which, by the way, was demagogued to death by the administration --


MR. MCLAUGHLIN: -- because it's 10 percent of the total surplus, $1.7 trillion, which is peanuts, spread over five years.

MS. CLIFT: Yeah, but you don't know that that surplus is going to exist. That's all on paper.

But Pat is right to the extent there is now a consensus, and most Republicans sign onto it as well, that we need government, we want government to help us educate our kids --


MS. CLIFT: -- and to play a role. And that's what Mr. Istook doesn't like.

MR. MCLAUGHLIN: Okay, we've got to roll, Pat. Okay.

MR. BUCHANAN: But educate the kids at the local level.

MS. CLIFT: (Inaudible) --

MR. BUCHANAN: Educate the kids at the local level.

MR. MCLAUGHLIN: Okay. Lobbying interruptus, Pat. Over an eight-day period, ending October the 15th, the president and first lady lobbied round the clock on the budget. Their tenacity paid off. The legislative harvest this week -- despite Lawrence O'Donnell -- is the proof. The only interruption of their lobbying marathon was the dual state visit last Friday, October 9th, of Peruvian President Fujimori and Ecuadoran President Mahuad, plus their delegations. They were here to seek a mediation of a long-standing border dispute.

(Videotape of the three presidents is shown.)

MR. MCLAUGHLIN: Question. Those who have seen this tape are of divided minds. Some see the president's behavior as normal, perhaps over-friendly, but normal. Others believe it is abnormal, especially against the backdrop of events.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Would you care to comment, Tony?

MR. BLANKLEY: Sure. I think it's typical, at least of Bill Clinton. And would be suggestive that chancelleries of the world will have to start sending shapely women if they want to negotiate with the president.

MR. BUCHANAN: (Laughs.)

MR. BLANKLEY: But given the conduct that apparently he's able to get away with, allowing him the leer would seem to be par for the course. (Laughter.)

MR. MCLAUGHLIN: Now wait a minute! There's no controlling legal authority that says that what he did was a leer or that he ogled or that there was recidivism here.

Did you see any recidivism?

MR. O'DONNELL: I saw nothing untoward in that whole -- (laughter) --

MR. BUCHANAN: Did you see --

MR. BLANKLEY (?): I'll defend him on that!

MS. CLIFT: This is a man who appreciates the finer things in life, and that behavior was certainly within bounds. Maybe Ken Starr will subpoena his eyeballs next!

MR. BUCHANAN: Did you see the rest of those guys in there? Who would you have been looking at, John? (Laughter.)

MS. CLIFT: (Laughing) Good point!

MR. MCLAUGHLIN: So you think it's normal behavior?

MR. BUCHANAN: She's a beautiful woman, for heaven's sake! (Laughter.)

MR. MCLAUGHLIN: All right, well let's take another -- one more look at it to satisfy ourselves that this is normal behavior.

(Videotape of the three presidents is shown again.)

MR. MCLAUGHLIN: Look at eyes. Is he flirting with her?

MR. BUCHANAN: I can't see if he's even looking at her very clearly.

MR. MCLAUGHLIN: Yeah, he is.

MS. CLIFT: I can't believe all the attention paid to that! This is pathetic. You don't have enough existing scandal, you have to try to manufacture more? (Laughs.)

MR. BUCHANAN: John, I hope I would have taken a second look at that young lady! I think she is -- (off mike).

MS. CLIFT: (Laughing.)

MR. MCLAUGHLIN: That's President Mahuad on his left. (Laughter.)

Well there you are. You can make your own determination.

Exit: Was the GOP capitulation to Clinton at the end of this congressional session more foolish or was it more wise?

And by the way, that is the new question of the week at

Pat Buchanan.

MR. BUCHANAN: I think, John, they might save a couple of seats in getting out of a fight. But they've invited a challenge to the leadership, I think, of the Republican Party when the new Congress comes in.

MR. MCLAUGHLIN: That means "more foolish"?

MR. BUCHANAN: Well, no. I think -- from a leadership standpoint, I think they've demoralized their base.


MS. CLIFT: Incumbents need something to run on whether they're Republican or Democrat. The Republicans did the right thing.


MR. BLANKLEY: It was wise. It was a policy they decided on at least 2-1/2 months ago. The policy consequences are negligible. They've avoided a longer, more embarrassing fight, and it will pay off on election day.

MR. MCLAUGHLIN: How do you feel, Lawrence?

MR. O'DONNELL: It's very hard to second-guess choices made in the last week of a session. I don't see it as capitulation for the Republicans. I do see it as the right choice.

MR. MCLAUGHLIN: The answer is: He who fights and runs away lives to fight another day. It was a wise move.

When we come back: If the November 3rd election is really a referendum on Bill Clinton, how should candidates position themselves towards Clinton?


MR. MCLAUGHLIN: Issue two: Referendum, si! Election, no!

(Videotape of political ad shown.)

NARRATOR: A 21-year-old intern from Beverly Hills. A simple blue dress. A silver hatpin from you-know-who. Some politicians want to spend the next two years fighting over these matters, but then they wouldn't be fighting for smaller class sizes, lower property taxes, or a Patients Bill of Rights. And they wouldn't be Wendell Young (sp). Wendell Young: fighting for all that matters.

(End of videotape of political ad.)

MR. MCLAUGHLIN: Wendell Young (sp) is a Pennsylvania politician who wants to win in the November election two weeks from Tuesday. Young is saying that Republicans are so consumed by scandal, Congress is paralyzed.

Young, a Democrat, says that he won't let Monica, despite the intrigue and the pulp allure, distract him from the issues: school class size, property taxes, HMO reform, et cetera.

Question: By any calculus, this political commercial is inventive. When you first see it, you think a Republican was behind it. Right, Pat? Then it has an O. Henry twist. But does it work? I ask you, Tony.

MR. BLANKLEY: I think, on the general principle, I would not, if I were a candidate, raise the Clinton issue whether I was a Republican or a Democrat. I think that is in the public consciousness. Those voters who are going to go one way or the other are going to be there anyway. And by raising it explicitly, I think, you risk antagonizing voters. I think always --

MR. MCLAUGHLIN: Well, that's very high-minded, Tony. But how do you avoid raising it if a constituent comes up to you and says, "How are you going to vote on the impeachment question?"

MR. BLANKLEY: Well, there's a difference between ducking a question in a town hall meeting and buying advertising.

MR. MCLAUGHLIN: All right, what's the best way to duck it?

MR. BLANKLEY: I don't know. I'm --

MR. MCLAUGHLIN: I'll tell you early. Shall I tell you early?

MR. BLANKLEY: I don't duck it.

MR. MCLAUGHLIN: You duck it the way Al D'Amato's ducking it. Al D'Amato says, "I'm sorry, I can't talk about that whole subject."

MR. BUCHANAN: He's a senator.

MR. MCLAUGHLIN: "No, I'm not. I'm going to keep my intellectual honesty. I'm going to keep the purity of my judgment pure. And because I'm going to have to sit in the United States Senate, perhaps, and judge" --

MS. CLIFT: Well --

MR. BUCHANAN: But that's a senator, John.


MR. BUCHANAN: That's a senator. A congressman can't do that, because they've all -- they've all --

MR. MCLAUGHLIN: Well, a congressman will do the same. He has to vote on -- don't you understand he has to vote on --

MR. BUCHANAN: -- they've all voted!

MR. MCLAUGHLIN: No, they have to vote again.


MR. MCLAUGHLIN: They have to vote on the articles of impeachment.

MR. BLANKLEY: When they see the evidence.

MR. BUCHANAN: But look, if you're behind -- if I were a Democrat, and I were far behind, and I needed an issue, I would say, "Look, I'm not going to fool with this stuff. We're going to go down there, do America's work. Let them do this" --

MR. MCLAUGHLIN: No, no, it's better to say, "I'm going to be a juryman, whether it's the articles of impeachment" --

MR. BUCHANAN: Well, that doesn't do anything for you.

MR. MCLAUGHLIN: Yes, it does!

MR. BUCHANAN: He's neutral. He's --

MR. MCLAUGHLIN: It gets you out of the situation.

MR. BUCHANAN: He doesn't want to get out of it. (Laughs.)

MS. CLIFT: Well, first of all --

MR. MCLAUGHLIN: All right, the direct approach, Eleanor. The Wendell Young (sp) ad defends Bill Clinton obliquely. Here's the head-on kamikaze version of the Clinton defense.

(Beginning of videotape of political advertisement.)

NARRATOR: October 8th, 1998: Congressman Rick White votes to continue the impeachment proceedings against the president. Rick White's vote on impeachment will drag us through months and months of more mud and politics.

JAY INSLEE (Democratic candidate for the House, First Congressional District, Washington): I'm Jay Inslee. What the president did WAS wrong. He should be censured, but not impeached. Rick White and Newt Gingrich shouldn't be dragging us through this. Enough is enough. It's time to get on with the nation's business.

(End of videotape.)

MR. MCLAUGHLIN: Jay Inslee is the Democratic candidate in Washington state's First Congressional District. He's running against two-term Republican incumbent Rick White, who voted for impeachment.

Question: Is Jay Inslee's frontal defense of Clinton smart politics? Eleanor Clift.

MS. CLIFT: Well, he's in a very tight race. And he's operating off polling that shows if you have a generic Republican who thinks what Clinton did is terrible and he should be impeached, and you have a generic Democrat who says let's investigate but let's go for censure, that the Democrat wins. And that's what he's doing. He's one of two Democrats in major races in this country who are using this. Most Democrats are going to stay far away from it.

MR. BUCHANAN: I think it's a very good ad. I think it's an effective ad. It's perfectly consistent with what most of the country thinks. I think he should have ended it, however, hitting two or three big Democratic issues that are controversial and popular.

MR. MCLAUGHLIN: You like the Inslee ad?

MR. O'DONNELL: Yeah. I agree with Pat. I think that's a very effective ad. I think the first one was terrible. I think the first one sets you up to dislike the conduct the president was engaged in, and it doesn't turn you out of that.

MR. MCLAUGHLIN: Totally counterproductive.

MR. BUCHANAN: Exactly.

MR. O'DONNELL: Very much so.

MR. MCLAUGHLIN: I want to ask you to see whether you can handle this question. This is a serious test. What is the logic, the rationale behind referendizing the election?

MR. O'DONNELL: Well, the problem for the Democrats is they generally don't have anything else. It's what they have to do. They've got poll numbers that say the public doesn't want this impeachment process; you might as well run against it.

MR. MCLAUGHLIN: That's close, but no cigar, so to speak. Try it again. What is the rationale? What is the motivation for doing it? What is the logic? You try it.

MR. BLANKLEY: I agree with him. (Laughter.)

MR. MCLAUGHLIN: Well, you're wrong. He was close when he said they have nothing else. But what they must do is transcend the current situation by going to the party and not the man.


MR. MCLAUGHLIN: They've got to keep it away from Clinton so they appeal to party loyalty.


MR. MCLAUGHLIN: Yes, they are. Yes, they are.

(Cross talk.)

MR. MCLAUGHLIN: That means that the die-hards are going to love this, and the die-hards will come out, but the die-hards are a disappearing species. Only 20 percent of the Democratic electorate are die-hards.

MR. O'DONNELL: I don't think that strategy is for the die-hards. I think that strategy --

MR. BUCHANAN: Exactly.

MR. O'DONNELL: -- is for that marginal voter who's not even sure about showing up.

MR. BUCHANAN: This is perfectly satisfactory to the Democrats, and it goes right into the center. The people said, "He's a bum, but let's get it over with."

MR. MCLAUGHLIN: Now wait a minute. You think referendizing is a ploy, a tactic to draw in the independents and the ticket splitters?

MR. BUCHANAN: The swing votes -- and look, you use the issue to your advantage. You can't just say, "I'm going to be a juror and I'm not going to talk about it."

MS. CLIFT: Yeah. People are angrier at the investigation than they are at Bill Clinton, and that's what the Democrats are trying to appeal to. But they don't want this to be a referendum on Bill Clinton's conduct. That would be terrible.

MR. MCLAUGHLIN: Right. They want the party over the man.

MS. CLIFT: (Inaudible) -- referendum on the impeachment proceedings and the fact that they're obscuring issues, and most people go along with that.

MR. MCLAUGHLIN: Okay. Standing by their man.

Maryland Democratic Governor Parris Glendening now thinks his reelection bid is best promoted by a profession of party unity, despite the fact that just last month Glendening refused to appear on the same stage with Bill Clinton.

GOVERNOR PARRIS GLENDENING (D-MD): (From videotape.) And a very, very special welcome, a warm welcome to our president, President Clinton. (Applause.)

MR. MCLAUGHLIN: Senate Minority Leader Tom Daschle also hammers home the unity theme.

SENATOR TOM DASCHLE (D-SD): (From videotape.) I say we put our future in the hands of this administration, this president, and Democrats in Congress! (Applause.)

MR. MCLAUGHLIN: Question: Is the November 3rd election in reality a de facto referendum on Bill Clinton? And will standing by their man on election day -- unity, in other words -- help the Democrats?

You've got two questions there: Do you agree that this election is essentially, if not 100 percent, close to it, a referendum on Bill Clinton?

MR. BUCHANAN: It is a referendum on Clinton, on impeachment, but also on sort of the whole record "do you want a change."

MR. MCLAUGHLIN: How do you like party unity as a way of approaching this problem?

MR. BUCHANAN: You know, I think that's nice, but that won't do it. They've got to go for the swing voter.

MR. MCLAUGHLIN: I gave you the reason for party unity; it's got to be party over man. That's the way they can hopefully get through it.


MS. CLIFT: Well, Mr. Glendening didn't want to appear with Clinton just a few weeks ago. Now he's right there next to him. Glendening learned that you can't stick your finger in the eye of the Democratic constituency and expect them to vote. So unity is important.

MR. MCLAUGHLIN: It is true that Clinton can deliver on one front. What is that?



MR. BLANKLEY: Raised in hotel rooms, not at rallies. They want to keep him out of sight but in the wallet. (Laughter.)

But in Maryland, the reason why Glendening went back to Clinton was very specifically because the 97 percent black vote was turning against him.


MR. O'DONNELL: The referendum is over the public -- is basically with Bill Clinton, and so they're looking for people who are going to try to end this process.

MR. MCLAUGHLIN: No. By saying that, you drive us into a consideration of polls, then we have to talk about various kinds of polls, plus the ones that don't want to be polled. You can't say categorically that people are with Clinton.

MS. CLIFT: (Laughs.)

MR. O'DONNELL: Well, the most important polls will be the exit polls. They will tell you whether this was a referendum on Clinton.

MR. MCLAUGHLIN: I'll go along with that.

MR. O'DONNELL: (Chuckles.)

MR. MCLAUGHLIN: We'll be right back with predictions.


MR. MCLAUGHLIN: Very fast. Republicans have 55 senators now. How many will they have after the election. Pat?



MS. CLIFT: Plus three; 58. (Laughs.)


MR. O'DONNELL: Fifty-eight.

MR. MCLAUGHLIN: The answer is 60.






MR. MCLAUGHLIN: Issue three: "Hardened soldiers."

REP. CYNTHIA A. MCKINNEY (D-GA): (From videotape.) When the military brass was on Capitol Hill saying that our reasonable belt-tightening had resulted in an impotent military, I guess I didn't fully understand the scope of the problem. With $50 million worth of Viagra, the entire military-industrial complex will be locked, cocked and ready to rock.

MR. MCLAUGHLIN: What has made Representative Cynthia McKinney so angry is a last-minute Pentagon request for $50 million worth of Viagra. That's how much the military will need just to begin meeting the demand for the anti-impotency drug, from 6 millions troops and retirees, and that's if they strictly ration the blue pills. Fifty million dollars is enough to buy two new Harrier jets, 45 Tomahawk missiles or 6 million hits of Viagra. McKinney thinks the money could be better spent.

Question: Is Viagra necessary for military readiness -- (laughs) -- I ask you, Lawrence O'Donnell?

MR. O'DONNELL: Well, having no personal experience with Viagra, I will have to venture the guess that like many drugs, it has secondary effects. And one of the obvious secondary effects would be perhaps increased aggressiveness. And perhaps that's what the military has in mind in having this around.

MS. CLIFT: (Chuckles.) Well --

MR. MCLAUGHLIN: What do you think, Tony?

MR. BLANKLEY: Well, I mean, I think it creates esprit de corps. (Laughter.)

But the real matter is this is for retired military, and it's part of the service -- the wraparound benefits package to keep men and women in the military. And it's in fact logical, although it's humorous.

MS. CLIFT: Well --

MR. MCLAUGHLIN: Well, is it really humorous? After all, the military, a large number of them, gave up the best years of their lives -- and that means the best year (sic) of their normal sexual lives -- so that the rest of us could live free. And now, in their twilight years, is it asking so much as to deny them a piddling $50 million so that they can enjoy making a little whoopee? I ask you.

MS. CLIFT: (Chuckles.) Well, first of all, American troops have fathered so many children around the world, I'm not sure they gave up the best years of their sexual lives. And I'm from the "make love" --

MR. BLANKLEY: Oh, that's not fair. That's not fair. (Chorus of groans and demurrals.)

MS. CLIFT: Well, it happens to be true. I'm from the "make love, not war" generation, and so I basically don't begrudge this. But I think it needs to be controlled, and if we're going to be giving out Viagra, the least they can do is to not fight about paying for contraceptives.

MR. MCLAUGHLIN: See, if her logic is true, we would deny Social Security benefits to drug addicts and alcoholics, would we not?

MR. BUCHANAN: This is to me, John? (Laughter.) Well --

MR. MCLAUGHLIN: Can you handle that? I mean, do you see the logic --

MR. BUCHANAN: Well, if you got medicinal purposes for retirees, and it's part of the retirement packages or the medical packages they got, I guess you got to go along with it. But if it weren't for the enlisted personnel right now, I would agree with Ms. McKinney.

MR. O'DONNELL: I'm surprised the --

MR. MCLAUGHLIN: Oh, I think your attitude is really very skinflintish on this whole issue. Pat, I thought you were a strong military booster.

MR. BUCHANAN: No, no, I'm a budget hawk. (Chuckles.)