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MR. MCLAUGHLIN: Issue One: Systemic Corruption in Iraq.

(Videotaped segment of Senate Homeland Security and Governmental Affairs Committee hearing.)

SEN. SUSAN COLLINS (R-ME): Mr. Bowen, we look forward to hearing from you now.

STUART BOWEN (U.S. Special Inspector General for Iraq Reconstruction): Corruption in Iraq is a major issue. When I talk about that, I mean within the Iraqi system.

(End of videotaped segment.) MR. MCLAUGHLIN: In Iraq, corruption is raging. It's an insurgency all its own. Corruption is eating away at the country's reconstruction and corroding Iraq's infant democratic institutions. That's the devastating news delivered to Congress this week by the U.S. special inspector general for Iraq reconstruction, Stuart Bowen.

Item: Criminal cases; 1,400 criminal cases involving $5 billion.

Item: $1 billion stolen by one Iraqi. A staggering $1 billion was embezzled by one former Iraqi defense minister. That's one individual, $1 billion.

Item: Bribery rampant; one Iraqi out of three. A poll conducted this quarter found that one-third of Iraqis reported that they have paid bribes for products or services this year and that the Iraqi public mistrusts both the police and the army itself. In U.S. population terms, that would mean 75 million American adults that have had to pay bribes for products and services in the last seven months.

Item: Democracy ravaged. Iraq's democracy is in its infancy, and corruption is smothering it, affecting all the institutions of government and penetrating the membrane of society itself.

General Abizaid, commander of U.S. forces in Iraq, says that Iraqi Prime Minister Maliki in effect is unable to provide security or basic services or to maintain order.

Question: Are Iraqi government officials too busy lining their pockets to tend to business? Pat Buchanan.

MR. BUCHANAN: I don't think you can say that of all of them. Some of these guys are very brave and some of them have given up their lives. But corruption is endemic in war, John. The real problem here, it's going to damage American support for the war. But there are too much larger problems we're dealing with just today. One of them is the monstrous Shi'a demonstration on behalf of Hezbollah, where they're not only burning Israeli flags --


MR. BUCHANAN: In Iraq. They're not only burning Israeli flags, but they're burning American flags. And almost four years into the war, not quite -- it's run as long as World War II almost -- the president of the United States says, in the capital city of the country we liberated, conditions are, quote, "terrible."

MR. MCLAUGHLIN: Where chaos exists, does that chaos breed corruption in the sense that your only security is what you've hidden under the mattress?

MS. CLIFT: Yeah, absolutely. I wouldn't be blaming the Iraqis for the way they're trying to survive in a society that we have helped to decimate. And if we're going to talk about corruption, let's look at the contracts for reconstruction. They've been ripping off -- American corporations have been ripping off the federal government.

The reconstruction is way behind schedule, nonexistent. And the Iraqi people, who watched the superman army come in and take Baghdad in three days, cannot understand why, three years later, we can't even turn the lights on and get the air conditioning going in 120-degree heat. So, I mean, I think it's a disaster.

MR. MCLAUGHLIN: Okay, Hillary versus Rummy.

(Begin videotaped segment of Senate Armed Services Committee hearing.)

SEN. HILLARY RODHAM CLINTON (D-NY): Yes, we hear a lot of happy talk and rosy scenarios. But because of the administration's strategic blunders, and frankly, the record of incompetence in executing, you are presiding over a failed policy. Given your track record, Secretary Rumsfeld, why should we believe your assurances now?

DEFENSE SECRETARY DONALD RUMSFELD: My goodness. Does the enemy have a brain and continue to make adjustments on the ground, requiring our forces to continue to make adjustments? You bet. That does not mean that we have to spend the rest of our lives, as the United States armed forces, in Iraq. The Iraqis are going to have to take that over. We can't want freedom more for the Iraqi people than they want for themselves.

SEN. CLINTON: There's a track record here. This is not 2002, 2003, 2004 or '05, when you appeared before this committee.

(End of videotaped segment.)

MR. MCLAUGHLIN: Later on Thursday, Senator Clinton called on Secretary Rumsfeld to resign. When asked about the resignation call, the Pentagon said, "We don't do politics." So reported NBC's Jim Miklaszewski.

Question: My goodness, what prompted Hillary to give Rumsfeld this public tongue-lashing?

MR. BLANKLEY: This is the most anticipated movement of a politician in a very long time. Look, everybody understood that she had mispositioned herself with the Democratic Party by supporting President Bush and that she's now trying to run to the front of the line -- or not to the front, but just to the front part of the line, and to go after Rumsfeld.

I thought, by the way, that the exchange was wonderful. His first response was "I'm taking notes from your prepared remarks that you're reading." (Laughter.) And, look, it's theoretically a smart move for her to get to the anti-war side as quickly as she can. The problem is that because it's seen to be so cynical, unlike her husband, who was more artful at it --

MR. MCLAUGHLIN: All right, enough on Hillary.

MR. BLANKLEY: Let me just add one more point.

MR. MCLAUGHLIN: Yeah, but I want you to talk about -- it was the forepart of the question.

MR. BLANKLEY: That's what I was going to get to.

MR. MCLAUGHLIN: The corruption.

MR. BLANKLEY: The corruption. Yeah, I think there's something a little -- I'm not in favor of corruption. But there's something a little anachronistic about this discussion. Corruption has been endemic in the Middle East and in much of the world for all history, and certainly in modern times.

To find that there's corruption in the bazaar and to suggest that it's related particularly to this moment in time is, I think, to miss the understanding. There are few places, other than Western Europe and North America, where you don't have this kind of rampant corruption.

MR. MCLAUGHLIN: What do you think, Mort? No big deal; corruption is everywhere.

MR. ZUCKERMAN: No, I think it is a big deal, because it speaks to the sickness of that society. And what you have now, since we threw out the gang around Saddam Hussein, you have a new gang come in and they're going to get their piece of the action.

You look at the Soviet Union. That's exactly what happened in Russia, where, if you think it's bad here, they had 80 percent of their transactions involved corruption. All of these societies, when they get a new group that comes in and takes power from the old group, they want their piece of the action. The corruption is endemic. And it just speaks to the sickness of that society that was left over from Saddam Hussein.

Now, does this also penetrate the oil industry in Iraq?

MR. ZUCKERMAN: Of course, absolutely.

MR. MCLAUGHLIN: Do you know what they're doing? Do you think that those pipelines are being blown up by terrorists, or are they being blown up by criminal miscreants, because they want to get trucks involved to haul the oil --

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: Then they take the oil out of the trucks and they sell it on the black market.

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: Isn't that quite imaginative?

MR. ZUCKERMAN: The one thing you can rely upon in that part of the world is that the criminal -- the thieves of Baghdad are really quite historically proficient.

MR. MCLAUGHLIN: Do you think there's room for Zuckerman to encroach upon that market over there for --

MS. CLIFT: Corruption is the least of our problems.

MR. MCLAUGHLIN: -- not for oil but for miscreants?

MR. ZUCKERMAN: Miscreants? There's an unending supply of them.

MR. MCLAUGHLIN: Okay, General John Abizaid, commander of U.S. forces in Iraq, can you tell us what you believe about the sectarian violence in Iraq, particularly in Baghdad?

GEN. JOHN ABIZAID (Commander, U.S. Central Command): I believe that the sectarian violence is probably as bad as I've seen it in Baghdad in particular, and that, if not stopped, it is possible that Iraq could move toward civil war.

MR. MCLAUGHLIN: Let's do a couple of exit questions. The first one is from retired four-star Army General Barry McCaffrey, a ground commander in the first Gulf war and an NBC Nightly News commentator. He said this on Thursday night: "Secretary Rumsfeld is increasingly becoming irrelevant to the Iraq debate." True or false?

MR. BUCHANAN: Well, Barry McCaffrey -- he's a great general and he works the same place as I do, and he's made some brilliant analysis. He and Rumsfeld go back a long ways, and it's not -- (laughs) --

MR. MCLAUGHLIN: You mean, payoff time for him?

MR. BUCHANAN: No, it's not a very pleasant history. But, look, there's no doubt about it, Rumsfeld is the man on the spot, John. Hillary Clinton spots it. Everybody does. He's the architect of the war. The war is not going well.

MR. MCLAUGHLIN: All right, let me get this -- MS. CLIFT: What McCaffrey means to say is that you can replace Secretary Rumsfeld with the greatest Defense secretary ever and it's not going to change what's happening on the ground in Iraq. And the fact that General Abizaid is saying, "Well, we may have civil war here," that's like General Grant at Antietam saying, "We may have civil war here." We have been watching a civil war develop in Iraq for months, if not years.

MR. MCLAUGHLIN: McCaffrey also said this. Quote: "Iraq is starting to come apart on us. It's a very bad situation, and it's getting worse." What about that, Tony? Do you feel that to be the case? Iraq.

MR. BLANKLEY: Yeah, of course it's getting worse. A couple of months ago, by the way, Barry McCaffrey came back and said he thought things were getting better.

MR. MCLAUGHLIN: That's right, he did.

MR. BLANKLEY: And things can get better and things can get worse. Right now they're clearly getting worse; there's no question about that.

MR. MCLAUGHLIN: What do you think, Mort?

MR. ZUCKERMAN: Yeah, I mean, I think the sectarian violence somehow or other was unanticipated to the degree that it has already emerged. And Zarqawi, when he was alive, was the one who really triggered most of it off. But the fuel was there for the match to be thrown in. And this is something that, somehow or other, when our military says they really didn't anticipate this, leaves you scratching your head.

MR. MCLAUGHLIN: So you think the situation is badly deteriorating.

MR. ZUCKERMAN: Without question, when you have 100 deaths every day --

MR. MCLAUGHLIN: Do you think --

MR. ZUCKERMAN: -- in Baghdad, the capital, three and a half years after we have been in that war, is simply coming apart at the seams; of course it's deteriorating.

MR. MCLAUGHLIN: Do you think that what Abizaid said, knowing that he's rather cautious, regarded as rather cautious in the military community, if not extremely cautious, could you tell by his manner, could you tell that there was much between the lines? Did you think it said more than it said with regard to how soon it's going down the drain? MR. ZUCKERMAN: I don't even have to worry about what was between the lines. It's on the lines we're really, really serious and threatening what we at least hope we can get out of that situation.

MR. MCLAUGHLIN: Is he setting up a troop withdrawal?

MR. ZUCKERMAN: No, no, quite the opposite.

That, I think, is not what's being set up. What he is warning everybody, in very explicit terms, is that we are on the edge of -- it's a low-level civil war, but --

MS. CLIFT: They are --

MR. ZUCKERMAN: -- we may be on the verge of a major civil war.

MR. MCLAUGHLIN: You know that the --

MS. CLIFT: They are beefing up the troops in Baghdad because they're afraid of a Vietnam-level --

MR. MCLAUGHLIN: Expansion?

MS. CLIFT: No, no -- withdrawal, you know, leaving the roof of the embassy in helicopters. They are trying to fortify themselves against that happening before November.

MR. BUCHANAN: The departing British ambassador says he believes the country can come apart into three pieces. This sectarian struggle going on, it hasn't reached a wholesale civil war, but when you've got people like Abizaid talking about its possible imminence, you are talking about a possible breakup of that country into three pieces. And frankly, the point I made to begin with, this massive Shi'a rally in Baghdad, burning American flags --

MR. MCLAUGHLIN: Ten thousand.

MR. BUCHANAN: Well, yeah -- burning American flags is something the American people see that, they're going to say, "Wait a minute. Didn't we liberate these guys?"

MS. CLIFT: Well, the American people are wondering that already.

MR. MCLAUGHLIN: When we come back --

MS. CLIFT: We are in the middle of a civil war, and that is not a role for U.S. troops.

MR. MCLAUGHLIN: Issue Two: Holy Land Horror. War rages on between Israel and Hezbollah. Bombs, rockets, rhetoric shot back and forth during this week's bitter blood-letting and grim escalations.

Item: Israel pushes forward. Nearly 10,000 Israeli troops clashed with Hezbollah guerrillas in towns across southern Lebanon. And earlier in the week, Israeli commandos launched a bold raid on a Hezbollah command center in Ba'albek, eight miles from the Syrian border and 80 miles from the Israeli-Lebanon border.

Item: Death from above. Hezbollah rockets rained down on Israel with deadly ferocity; 230 rockets fired in one day. Hezbollah leader Hassan Nasrallah threatened to bomb Tel Aviv. "If you bomb our capital, we'll bomb your capital. We'll bomb Tel Aviv, and we can do this." Israel shot back with a threat to destroy Lebanon's infrastructure if Tel Aviv is attacked.

Item: Abdullah speaks. The king of Jordan, a committed pro-U.S. ally, said Israel's offensive against Hezbollah has turned Hezbollah fighters into heroes among many ordinary Arabs. This was the severest criticism by Jordan against Israel in many years.

Item: Iran speaks. Iranian President Mahmoud Ahmadinejad announced Thursday that the solution to the Middle East crisis is to destroy Israel.

Question: Is Israel deliberately targeting civilians? Mort Zuckerman.

MR. ZUCKERMAN: Well, you know, this is the sad part of any war when civilians get so badly mauled. But if you go back through every war that we've been involved with, where democracies try and prevent casualties from their armed forces -- you have World War II, the Korean war, the Vietnam war, the war in Kosovo; we carpet-bombed and we bombed everybody in order to protect our own soldiers. That's exactly what Israel is doing here.

But it's compounded by the fact that Hezbollah has deliberately hidden their launchers and rockets in the civilian population. It's captured best by a cartoon in which an Israeli soldier is standing in front of a baby carriage firing and the Hezbollah is standing behind it. They are using their women and children basically to attack Israeli women and children, and that's where the rockets are going.


MR. MCLAUGHLIN: Wait a minute. Wait a minute. Let me pick that point up. The most troubling military action of the week is the Israeli aerial bombing of Qana in southern Lebanon. It took the lives of 54 people within an estimated -- an estimated 30 of whom were children. This has raised the issue of whether Israel is depopulating a buffer zone for strategic reasons, and doing so without sufficient regard for civilian life. One of Israel's most respected newspaper columnists, Nahum Barnea, who writes for Yediot Aharanot, makes clear that he fully supports military action against Hezbollah. "There was no choice but to respond militarily. The only questions were how -- how much and at what cost. The question came up when I heard Defense Minister Amir Peretz explain proudly that he had removed limits on the IDF" -- the Israeli Defense Forces -- "regulating warfare in areas where civilians live alongside Hezbollah soldiers.

"We saw the results of that policy yesterday in the bodies of women and children being carried out of the rubble in Qana. 'We warned them ahead of time,' says the IDF. 'We dropped leaflets telling them to leave.' According to international law, we covered ourselves.

"The generals may consider themselves, quote-unquote, 'covered,' either by their understanding of international law or the instructions they receive from Defense Minister Peretz. But I, for one, am covered in shame. Anyone who has visited the north in the last couple of weeks can tell you what it's like for civilians during wartime. Those who can, leave. That's what they do. Those left behind are the weaker elements of society -- the poor, the sick, the elderly, the children, the handicapped. No leaflet is going to make those who have nowhere to go leave their home."

What do you think of Barnea?

MR. ZUCKERMAN: Well, he is an outstanding journalist, and I know him very well and I have a great respect for what he is saying and writing. I just don't know what the choices are. The choices aren't between good and bad. They're between bad and worse. Right next to that particular building, there was a major attack of rocketry --

MR. MCLAUGHLIN: The Canadian general --

MR. ZUCKERMAN: No, no, no -- from that building in Qana that you're talking about. By the way, even Human Rights Watch has come back; the casualties were half what they originally estimated. It's about 28, not 54. But setting that aside, it doesn't make a difference. The fact is that the building collapsed seven hours later. But there is no choice but that they have to protect their own population.

MR. MCLAUGHLIN: Last week you quoted --

MR. ZUCKERMAN: They've got to go after the rockets.

MR. MCLAUGHLIN: You quoted the Israeli public opinion last week. It's up around 80 percent behind the action. Correct?

MR. ZUCKERMAN: Absolutely. MR. MCLAUGHLIN: Is Barnea speaking for anyone except himself?

MR. ZUCKERMAN: No, no --

MS. CLIFT: Israel has a wonderfully free media, and there's a lot of criticism, and it's healthy criticism. And I think that's a positive thing. They are questioning. Secondly, when you tell people to get out, they can't always get out. People couldn't get out with Hurricane Katrina, and we weren't having wartime there.

And the fact that they're raining bombs from the sky, they're indiscriminate, whether you're targeting people or not. And Israel is adjusting now. They're understanding they have to use ground troops. If they want to root out Hezbollah fighters, they're going to have to do it on the ground and take casualties themselves. I still don't think they accomplish much, but that's what they're trying to do.

MR. MCLAUGHLIN: Mort -- I mean Pat.

MR. BUCHANAN: Look, Israel is not deliberately targeting civilians. That would be silly. They are depopulating the south. They've fired artillery shells in there. They've gotten all kinds of leaflets. They say, "Get the people out."

What they're doing, John, is they are not being careful enough and they do not realize that Qana was a disaster. One or two more like that and the pressure will be so great on the United States, they will have to call a cease-fire. Frankly, they are forcing the Americans to break away from them.

MR. BLANKLEY: Let me make a point. You've been running an awful lot of that side of the argument. The fact is that as long as Hezbollah is going to fight behind their own women and children, the Israelis only have the choice of either being killed or defending themselves. And you follow that line of reasoning and that'll be the extinguishment of them and they can do the same thing to us.

MS. CLIFT: There's another choice.

MR. BLANKLEY: And I guarantee you that if America is facing the same problem --

MS. CLIFT: There's another choice.

MR. BLANKLEY: Just let me -- I didn't interrupt you this time.

MS. CLIFT: There's another choice.

MR. MCLAUGHLIN: Didn't Clinton do that in -- MR. BLANKLEY: Clinton carpet-bombed. Look, American --

MR. MCLAUGHLIN: Carpet-bombing.


MR. ZUCKERMAN: He bombed Belgrade.

MR. MCLAUGHLIN: I know, he bombed Belgrade.

MR. BLANKLEY: But the fact that world opinion is going to turn against Israel, and it has, and against America, and it has, cannot deflect a rational people from defending themselves.

MR. MCLAUGHLIN: All right --

MS. CLIFT: There is another choice, and it's diplomacy, and it's dealing with the Arab regimes in that area who were initially sympathetic and cutting off the supply of rockets to Hezbollah. That is the answer --

MR. MCLAUGHLIN: Well, on that --

MS. CLIFT: -- not turning another generation to hate Israel. People remember this stuff.

MR. BLANKLEY: It is so --

MR. MCLAUGHLIN: All right, let me get in here.

MR. BLANKLEY: It is so unrealistic --

MS. CLIFT: It's not unreal.

MR. MCLAUGHLIN: All right, let me get in here.

MR. BLANKLEY: To talk about diplomacy with a band of terrorist cutthroats is just nuts.

MS. CLIFT: The military does not work.

MR. MCLAUGHLIN: The European Union wants an immediate cease- fire. The Islamic Conference, 56 nations meeting in Malaysia, they want an immediate cease-fire.

MR. BUCHANAN: So does Hezbollah.

MR. MCLAUGHLIN: Is the -- what?

MR. BUCHANAN: So does Hezbollah. The reason is --

MR. MCLAUGHLIN: Is the international pressure on Israel building? I ask you. Is it building? MR. ZUCKERMAN: Well, there's no question but that it's building. But the choice that Israel has is to do what? To let their own -- these rockets are coming in, 230 rockets, as you yourself pointed out. What are they going to do?

MR. MCLAUGHLIN: Well, they've got something on the table now from Nasrallah.

MR. ZUCKERMAN: What do they have on the table?

MR. MCLAUGHLIN: What do they have on the table, Pat?

MR. ZUCKERMAN: What do they have on the table? (Laughs.) They have nothing on the table.

MR. BUCHANAN: The reason --

MR. MCLAUGHLIN: One side wants a multinational force in place -- that's the Israelis -- before the cease-fire.

MR. ZUCKERMAN: And so does the United States.

MR. MCLAUGHLIN: The other party wants a cease-fire before the multinational force --

MR. ZUCKERMAN: Because --

MR. MCLAUGHLIN: -- which is the normal procedure.


MR. ZUCKERMAN: But right here, the real threat here is that Iran will continue to refurbish and resupply Hezbollah. And the next thing you know, two years from now, they'll be faced with another rocket attack with longer-range rockets, more accurate rockets and more lethal rockets.

MR. MCLAUGHLIN: Issue Three: The Kiss.

At his 2005 State of the Union address, President Bush appears to have kissed Connecticut Democratic Senator Joe Lieberman on the cheek. Lieberman is now seeking re-election, and the kiss has become an icon of the campaign of his challenger, Ned Lamont, a cable TV mogul. Lamont's supporters are mocking Lieberman with the Bush kiss.

Meanwhile, Bill Clinton has joined Lieberman to stump for him, something extremely rare for a former president to do for incumbents in a primary. That being the case, however, Lamont is using the kiss as a weapon also against Clinton, mocking him too in a parade, with a giant papier mache float depicting the now notorious Bush-Lieberman kiss. Question: Why didn't Lieberman get a boost from Bill Clinton's endorsement and his stumping? Tony.

MR. BLANKLEY: Well, I want to correct what I said last week, when I thought that Lieberman had a reasonable chance of winning the general, although I thought he'd lose the primary.

MR. MCLAUGHLIN: Well, you said flat out --

MR. BLANKLEY: And I believe I was wrong. I've talked to a couple of good operatives from Connecticut since our show last week, and I'm convinced --

MR. MCLAUGHLIN: Are they setting you straight?

MR. BLANKLEY: They set me straight. I think Lieberman's going down hard, not only in the primary, but if he stays in it, in the general.

MR. MCLAUGHLIN: Well, what are people now taking into consideration? Shall I tell you? How Lamont's popularity will grow after this win. They're evaluating Lamont in these terms. That's why they say that Lieberman could win as an independent.

MR. BLANKLEY: Lamont is a cipher, but he's a cipher that's going to ride a wave to victory.

MR. MCLAUGHLIN: Exit question: Who will win the Democratic Senate primary in Connecticut this coming Tuesday, on August 8th, Lieberman or Lamont? Pat, quickly.

MR. BUCHANAN: Lamont going away, and he'll win the general.

MS. CLIFT: Yeah, Lamont. Lieberman has already conceded the primary. He's pulled his field operation. He knows what's ahead.

MR. BLANKLEY: Lamont Cranston. The Shadow knows.

MR. ZUCKERMAN: Lamont is going to be the winner.

MR. MCLAUGHLIN: And the winner in the general election?

MR. ZUCKERMAN: Well, I still think that Lieberman can pull it out in a general election.

MR. MCLAUGHLIN: Is that a Lieberman prediction for the general election? MR. ZUCKERMAN: That is a Lieberman prediction, yeah.

MR. MCLAUGHLIN: I don't know. I think Lieberman is kind of -- it's kind of salted away.

Issue Four: White House Big Dig.

PRESIDENT GEORGE W. BUSH: (From videotape.) We do wish you all the best; looking forward to being here when you kick off the new room. You deserve better than this.

MR. MCLAUGHLIN: The new room will be a refurbished White House press briefing room, currently dilapidated, seedy, infested and cramped.

PRESIDENT BUSH: (From videotape.) It looks a little crowded in here. And so do you want to double the size? Forget it! (Laughter.) You get to work like the rest of us.

MR. MCLAUGHLIN: Question: Is the press going to be banished from the West Wing? Do you think that this will drag on and on, Eleanor? Is that the logic behind this?

MS. CLIFT: No, I think they will be back eventually. But, you know, I was there covering the Reagan White House during the previous renovation, and they brought in those theater-style seats and the place really looked pretty good for a while. And it looks good on television. But when you see it, it's smaller and it's rattier. And it's rattier literally. There are rats there. They have to clear out the infestation.

MR. BUCHANAN: You should have seen it before we built it. That was built by H.R. Haldeman and Richard Nixon --

MR. BLANKLEY: And even ratty --

MR. BUCHANAN: -- right on top of the swimming pool.

MR. MCLAUGHLIN: What was it under Lyndon Johnson?

MR. BUCHANAN: It was a mess.

MR. MCLAUGHLIN: How did he swim there?

MR. BUCHANAN: Well, he swam in the nude. But in the press room they were drinking whiskey and playing cards. It's the White House reception room now.

MR. MCLAUGHLIN: Predictions. Patrick.

MR. BUCHANAN: Well, next time we meet, there will be another one of these Qana disasters. And I think the United States and the French will have gotten together with a resolution, and we may very well have a cessation of hostilities when next we meet.

MR. MCLAUGHLIN: If Bush tells Olmert to cease fire, won't Olmert cease fire immediately?

MR. BUCHANAN: He will tell Bush, "No, we need more time."

MR. MCLAUGHLIN: You think so?

MR. BUCHANAN: Yeah. And Bush will say, "Okay, I'll give you more time."

MS. CLIFT: Democrats will get to a unity position on the war, basically calling for an orderly withdrawal over a year's time.

MR. MCLAUGHLIN: Beginning when? Soon?

MS. CLIFT: Soon.

MR. BLANKLEY: After a slow start, Hezbollah is now getting the hell beat out of it by the IDF. That will become conventional wisdom in a week or two.

MR. ZUCKERMAN: The real rate of inflation is slowing down compared to a lot of original anticipations. And therefore the Federal Reserve is not going to be increasing interest rates through the rest of this year.

MR. MCLAUGHLIN: California Governor Arnold Schwarzenegger will win re-election in November.

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