SHOW: CNN CAPITAL GANG 04:00
HEADLINE: Israel Launches Attacks in Gaza Strip; Medicare Revision Makes Progress in Congress; Hillary Clinton Hits Talk Show Circuit
GUESTS: Mitch McConnell, Richard Holbrooke
BYLINE: Mark Shields Al Hunt, Robert Novak, Margaret Carlson
After Palestinian terrorists killed four Israeli soldiers, Israel launched two helicopter attacks in the Gaza Strip, one aimed at a senior Hamas leader. Then, Medicare revision to cover prescription drugs made progress with bipartisan agreement and White House support. A bill to get generic drugs on store shelves won unanimous support from the Senate Health Committee. Finally, as readers rushed to buy her memoir, Senator Hillary Clinton went on the TV talk circuit, saying how she had reacted to her husband's infidelity.
ANNOUNCER: From Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG.
I'm Mark Shields with Al Hunt, Robert Novak, and Margaret Carlson.
Our guest is Senate majority whip Mitch McConnell of Kentucky.
Thank you for coming in, Mitch.
SEN. MITCH MCCONNELL (R-KY), MAJORITY WHIP: Glad to be here.
SHIELDS: Good to have you.
After Palestinian terrorists killed four Israeli soldiers, Israel launched two helicopter attacks in the Gaza Strip, one aimed at a senior Hamas leader.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm concerned that the attacks will make it more difficult for the Palestinian leadership to fight of terrorist attacks.
(END VIDEO CLIP)
SHIELDS: A suicide bombing in Jerusalem by Hamas left 17 Israelis and the attacker dead.
(BEGIN VIDEO CLIPS)
YASSER ABED RABBO, PALESTINIAN MINISTER: They want to drown their old map in a sea of blood.
SILVAN SHALOM, ISRAELI FOREIGN MINISTER: This government will not march or walk in two tracks in the same time in parallel. I mean, terror by day and negotiation by night.
BUSH: It is clear there are people in the Middle East who hate peace.
(END VIDEO CLIPS)
SHIELDS: With Israel retaliating with helicopter attacks, is the road map to peace now dead?
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: The road map remains the way forward to a peace deal between the Palestinians and the Israelis.
(END VIDEO CLIP)
SHIELDS: Margaret Carlson, is Secretary Colin Powell right and convincing about the road map?
MARGARET CARLSON, CAPITAL GANG: Well, the road map is what there is, so he has to say that. And there -- he's going to a meeting on June 22 at which they'll do what they can to shore it up.
Problem, President Bush gave a rare rebuke to Ariel Sharon for the latest violence because he must buck up Mahmoud Abbas in his position, which Bush did at the Mideast summit.
Without that, there's just no hope of going forward, because, you know, Arafat is sidelined at the moment. If the Palestinians that he can't control the violence in Palestine by being at least given a chance by Sharon to prove that the Palestinians can be controlled, the road map could be dead.
SHIELDS: Mitch McConnell, the president sort of stopped and started this week. I mean, he first condemned, really chastened, anyway, the Israeli response, and then he backed off and did not do that after the subsequent retaliation.
MCCONNELL: The most intractable dispute in the world. Every president since Harry Truman has used up political capital trying to solve this problem. This president's made a decision to do the same.
This is not easy, and I wouldn't want to handicap the chances of success at some point down the road.
SHIELDS: Bob Novak.
ROBERT NOVAK, CAPITAL GANG: I thought this was a very great step forward by the president...
SHIELDS: You said that on the air, yes.
NOVAK: ... (UNINTELLIGIBLE). But, I mean, since we've been on the air...
SHIELDS: Oh, OK.
NOVAK: ... to come out against the Israelis when they tried to assassinate the Hamas leader, that took a lot of guts, particularly when the Republican Party is so anxious to get the Jewish vote in the next election. He did back a little bit away from it when the Hamas, who wants thing to fail, had this terrible suicide bombing.
But the difference is that Hamas is a renegade group, that they do not run the Palestinian Authority, while it's the Israeli government that all over, all over the next last few days have been having American helicopter gunships killing, burning and children and civilians.
So this is a -- this is really a problem. And the president -- only the -- you're right, Margaret, only the president can do it. But I don't believe that Sharon in the end can defy the president if the president stands firm.
SHIELDS: Al Hunt.
AL HUNT, CAPITAL GANG: Well, this is the Middle East, so nobody should have been surprised by the events of this week, and the vicious cycle of violence. But I think Secretary Powell is right. The road map is the only hope for peace.
There are two imponderables, Mark. First of all, as we -- as has been mentioned, Sharon. Now, Sharon was doing what is absolutely natural. When you get whacked, you ought to whack back. That's what we did after 9/11.
The problem, however, is that as Margaret said, that if Mahmoud Abbas isn't given some space -- how much support he has among the Palestinians is a very dicey question. If he isn't given some space, he's not going to be able to deliver on anything.
The other imponderable is, is George Bush really in this for the long run? Is there really a long-run commitment? Is he really going to risk political capital?
I hope that Mitch is right, that he is. He's certainly been good the last couple weeks. But I noticed that one of the guy -- a guy named Clint Lippert (ph), who until March was the head of the Israeli- Palestinian (UNINTELLIGIBLE) for the Bush National Security Council, said this week, "The White House went into this thinking they were serious, but they had no idea what being serious would mean."
SHIELDS: Mitch McConnell, your own sense, politically. You're a regularly respected political operative as well as being a United States senator. I mean, what are the political reality here? We're heading into a presidential reelection year. How much, how much capital will the president spend in trying to bring peace to that (UNINTELLIGIBLE)...
MCCONNELL: I think he'll spend a lot of capital on it, and I might surprise you when I say I don't think there's a downside to this. Every president has invested capital, regardless of party, in trying to solve this dispute. If this president is unsuccessful, it won't distinguish him from all the rest of the presidents who tried to solve this dispute and failed, many of whom were reelected.
So I don't think that the president in any way endangers his prospects for reelection by trying to do whatever he can to bring these two sides together.
CARLSON: You have to wonder why he neglected it for so long, because Secretary Powell has always wanted high-level involvement in bringing about Middle East...
NOVAK: But he's there now...
CARLSON: ... peace.
NOVAK: ... he's there now. I'd like to disagree with Al on something. Al posits Prime Minister Sharon as saying, Gee, he hit me, I'm going to hit back, and that's natural. Al, I think you know, Prime Minister Sharon does not want a Palestinian state. That's music to his ears when the Hamas is unreasonable. That means he can keep this 100-year war going. He's talked about 100 years' war.
Do you really think he wants a Palestinian state, under any conditions?
HUNT: I'm not a Sharon fan, and I'm -- I have great concerns about this. I know that Arafat and Hamas don't want peace, and I think that every time Sharon hits back, or every time that cycle of violence escalates, it plays right into their hands. And I'm afraid that Sharon sometimes plays too much to his own right wing.
NOVAK: That's -- I (UNINTELLIGIBLE).
CARLSON: Yes. But Sharon doesn't want peace, but only Bush can make him see that it's in his interest.
SHIELDS: We only have a few seconds, but how important was the symbolic dismantling that the -- at the settlement camp, at the Israeli settlement on the West Bank? I mean, was that by -- earlier in the week, by the Sharon, was that, was that a...
SHIELDS: Just symbolic?
MCCONNELL: Oh, I think it's important. That's one of the conditions that ought to be met along the road map, and the Israelis were indicating they were willing to do it.
Secondly, when the Israelis attack, they're always responding to an attack on them. I don't see the moral equivalency here that Bob apparently (UNINTELLIGIBLE)...
NOVAK: They're killing women and children, though...
CARLSON: Yes. Yes.
NOVAK: ... Mitch.
MCCONNELL: And no Israeli women and children have ever been...
CARLSON: But this dismantling...
MCCONNELL: ... (UNINTELLIGIBLE)...
NOVAK: No question they are. (UNINTELLIGIBLE) on both sides.
MCCONNELL: But I don't think the Israelis target women and children.
CARLSON: This is...
NOVAK: They don't care, they don't care about them being killed, though. I mean, they obviously don't, because they didn't kill.
CARLSON: I -- the dismantling of one, of one settlement is a good symbol, and it is a result of President Bush's personal involvement.
SHIELDS: Last word, Margaret Carlson.
Mitch McConnell and THE GANG will be back with whether the time has finally come for a prescription drug bill under Medicare.
SHIELDS: Welcome back.
Medicare revision to cover prescription drugs made progress with bipartisan agreement and White House support. A bill to get generic drugs on store shelves won unanimous support from the Senate Health Committee, and this endorsement from Democratic Senator Edward M. Kennedy of Massachusetts.
Quote, "I expect the legislation we passed today to be a key part of those Medicare reforms, bringing down the cost of prescription drugs and stretching Medicare dollars to meet more needs for more seniors," end quote.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I think it's an important addition to the resolution of a horrific problem in America today...
(END VIDEO CLIP)
SHIELDS: But not everybody was happy, as the Senate Finance Committee approved its Medicare bill.
(BEGIN VIDEO CLIP)
SEN. DON NICKLES (R), BUDGET CHAIRMAN: We have a $13.3 trillion unfunded liability on Medicare today. This bill's going to make it a lot worse.
(END VIDEO CLIP)
SHIELDS: Al Hunt, after so many years, does it look like prescription coverage drugs is in final sight?
HUNT: It is, Mark, and it's a good time for seniors. This isn't everything that people like Ted Kennedy wanted, but it's a very important first step.
And it does not dismantle Medicare, as some people would like. I think George Bush will get political credit for this when he signs it, but I also think that the idea that that then takes this issue off the table is wrong, because there's lots of things we can build on this, as they say, as where -- when you go.
This bill has a great start, but there's some gaps. For instance, it pays about half the first $4,500, then for $3,000, if someone's really sick, they got to pay all the drugs themselves. There ought to be motions to try to rectify that.
For instance, it freezes wheelchair and oxygen expenses. There's no reason that should happen. And Mark, it takes effect in 2006. Well, the argument we just heard on the tax cut was, why take effect later if you take effect now? Let's have it take effect now.
And finally, I would suggest, if cost is a problem, let's sunset it after about eight years, and then we can spend more and then see if it works or not.
SHIELDS: Boy, I'll tell you, Bob, Al makes a hell of a case, doesn't he?
NOVAK: Be of good cheer, Al, this is, this is a big, long step towards socialized medicine. Number one, it's a new, a new entitlement.
HUNT: It is.
NOVAK: A big new entitlement. The thing that I just discovered this week is this thing coming out of the Finance Committee has immediate price controls at 85 percent of the market price. It's (UNINTELLIGIBLE) -- it's -- they're having price controls. It's going to reduce the amount of research by the pharmaceutical companies, and it's going to mean a much poorer health -- quality of health care down the line.
And I guarantee you that, Mitch, this is just the beginning. Teddy Kennedy, when he's smiling, you should be crying, because he's got a bigger agenda ahead.
SHIELDS: Now, Mitch, Mitch...
CARLSON: Are you crying?
SHIELDS: ... I have to say, Democrats I've talked to would not say for attribution, but they were grumbling, because when Senator Kennedy endorsed it, it basically gave, and the president's support, gave it a momentum that made it difficult for Democrats to oppose.
MCCONNELL: Here's the politics of this. If you watch the Democratic candidates for president, you'll notice that this year, they've all been talking about the problems of the uninsured. Why? Because they believe that the prescription drug issue is coming out of the issue box and into the accomplishment box.
You can sort of overdose on what the details are of the Finance Committee proposal, but the point is this. This is a work in progress. It's going to happen. It's going to happen on a bipartisan basis. Kennedy realized that, and he didn't want to be completely out of it by opposing it.
There were enough Democrats who were going to support a proposal this year to make it a reality. And so I think Ted thought the best way to have some impact on the final product was to embrace it, at least to some extent.
SHIELDS: Now, Margaret, Bob Novak does make a good point, though. Ten years ago, when this was included in the Clinton plan, my goodness gracious, it was considered to be socialized medicine, an absolutely encroachment upon a great American industry, the pharmaceuticals.
Now the pharmaceuticals are...
SHIELDS: ... (UNINTELLIGIBLE)...
CARLSON: ... (UNINTELLIGIBLE), yes, yes.
SHIELDS: They're (UNINTELLIGIBLE).
CARLSON: Yes, they're in there, asking for it. I mean, the -- everybody's declaring victory here, Ted Kennedy, Bush. I don't see you crying. Medicare is not going to wither on the vine, which Republicans wanted a few years back.
It's not tilting at the moment towards private plans, which Republicans would like, getting people out of Medicare and into profit-making plans. And it's not a perfect bill.
But when, you know, for instance, it's going to -- the Mayo Clinic and other clinics are no longer going to take nonsurgical cancer payment -- patients because the payments for the chemotherapy are too low in these, in these tradeoffs. And maybe it'll be fixed, and maybe it won't.
NOVAK: You know, what...
CARLSON: But, you know, Ted Kennedy and George Bush did this once before. I'm sorry, I don't mean to...
CARLSON: You know, they...
HUNT: (UNINTELLIGIBLE) resource.
CARLSON: You know, Ted Kennedy puts his arm around George Bush, and they claim they've got an education bill. They put their arms around each other, they've got a...
NOVAK: Well, they did, (UNINTELLIGIBLE)...
CARLSON: ... prescription drug bill.
NOVAK: ... they -- and then, you know...
NOVAK: ... and they -- and, you know, the question I had, Mitch, is, what good is this Republican Senate? They coupled to Blanche Lincoln on giving tax cuts to people who don't pay taxes. They can't confirm judges. What good is having a Republican control?
CARLSON: What good are you, Mitch? Yes.
SHIELDS: Yes, Mitch?
MCCONNELL: I'm not sure I have time to answer.
SHIELDS: No, absolutely.
MCCONNELL: Yes. But politically, we fought this issue to a standstill in the last two elections. The Democrats realized there was no way they were going to beat us on it. And so they rolled over, and we're going to have a bipartisan accomplishment.
Bob, I don't think it's going to be as bad a proposal as you do. It is going to introduce managed care into Medicare. And I think in a way in which it will -- a number of participants will be (UNINTELLIGIBLE) -- be encouraged...
NOVAK: Through price controls, right?
MCCONNELL: ... to join the PPO. That remains to be seen.
CARLSON: (UNINTELLIGIBLE), well...
HUNT: Can I just say, this is a Ted Kennedy bill. He didn't reluctantly accept this. This is what he's been fighting for for 10 or 12 years. Bob Novak is absolutely right...
NOVAK: Price controls.
HUNT: ... on that score. It is a great bill. And I want to say this too, 40 years ago, when we first enacted Medicare, the Bob Novaks of the world said, It's socialized medicine, it will destroy in the -- American medicine and health care today, it will remain the leader in the world. And I'm sorry, Bob, you were wrong then, and you're wrong today.
NOVAK: Somebody going to, is somebody going...
CARLSON: Right. (UNINTELLIGIBLE)...
NOVAK: ... to tell me that this is not a price control bill?
HUNT: Certainly, I hope Medicare does bring (UNINTELLIGIBLE).
NOVAK: You like price controls.
HUNT: I -- no, I like...
SHIELDS: Price stability (UNINTELLIGIBLE)...
HUNT: ... I like...
SHIELDS: ... problem.
CARLSON: Mark, Secretary...
NOVAK: No, I'm talking about price controls.
CARLSON: Mark, Secretary Donna Shalala used to say she'd go around the country and seniors would say, Republican seniors, Keep government out of my Medicare.
CARLSON: It was such a good program, they didn't think government was in it. It's a great program, it works, it should not wither on the vine.
HUNT: And I want Bob Novak to get some benefits too.
SHIELDS: Last word, Al Hunt, kind, compassionate Al Hunt.
Next on CAPITAL GANG, what is Hillary doing on the talk show circuit?
SHIELDS: Welcome back.
As readers rushed to buy her memoir, Senator Hillary Clinton went on the TV talk circuit, saying how she had reacted to her husband's infidelity.
(BEGIN VIDEO CLIP)
SEN. HILLARY RODHAM CLINTON (D-NY), AUTHOR, "LIVING HISTORY": I was, as I say in the book, ready to wring his neck. I was so upset and angry with him, very disappointed. And yet at the same time, he was my president.
(END VIDEO CLIP)
SHIELDS: But the former first lady did not tell everything.
(BEGIN VIDEO CLIP)
CLINTON: I have talked a lot in this book about how I feel, but I also believe in the continuing right of every person to have a zone of privacy.
(END VIDEO CLIP)
SHIELDS: And what about that vast right-wing conspiracy theory?
(BEGIN VIDEO CLIP, ABC)
CLINTON: I would say that there is a very well-financed right- wing network of people -- it's not really a conspiracy, because it's pretty much out in the light of day -- that was after his presidency from the very beginning...
(END VIDEO CLIP)
SHIELDS: Bob Novak, you're a great devotee of the free market. Is this just about selling books?
NOVAK: Well, it's a lot selling books. Hillary has never been averse to making money any way she can. But beyond that, people around her tell me that this is a matter of trying to inoculate herself on questions that she's going to be asked if she ever runs for president, or when she runs for president, say, in 2008, about her husband's infidelities, she can say, Well, way back there in 2003, I answered the questions in the book.
Now, the answers aren't very good, but that's what she's doing.
Let me add one other thing. Since the last week's show, I have read the book. That is really a crummy book. That is -- that -- it is boring, it is banal, it is insincere. And it's really one of the great con jobs I've seen.
SHIELDS: Is it as good as Newt Gingrich's?
HUNT: You know, James -- I'm going to have to talk to Geraldine Novak, because James Carville said he gets so excited about Hillary, he thinks that Bob has a sneaker for Hillary.
I really worry about you, Robert.
Look, I tell you one thing that bothers me a little bit. Bothers me a little bit about the fact she's making all this big bucks on this as a United States senator. I wish she would have said, I'm going to take a certain amount, and pay off the legal bills that I incurred from the Ken Starr witch hunt, and the rest of it's going to charity.
But I have not read the book yet. I've read excerpts of it. But, you know, I think there's going to be a course of -- there is a, there is a right-wing conspiracy, and it's going to go on through everything Hillary says. Beforehand it was, She won't level with us, she won't tell us anything. Well, now it's, you know, Who believes it?
NOVAK: She still won't level.
NOVAK: She still doesn't level.
SHIELDS: Margaret Carlson, tell us, you've been on that book circuit, you know it well. What about this book?
CARLSON: Riding her coattails, don't want to criticize too much. She's getting people into the store.
What I would like to say is that I think we could all benefit here at CNN from ABC's lighting on the Barbara Walters interview.
SHIELDS: Wow, wasn't that impressive?
CARLSON: Yes, like, angelic.
CARLSON: Hillary accomplished what you wish she hadn't, but she did, which is to lay down her own marker about what happened and how she feels about it, which she hadn't done before, and to establish, although it's subject to other people's questioning, you know, what she knew and when she knew it.
And her answer to every other question is, I was busy doing children's health. So there you are, that's all we're going to get. And she's going to sell a million books.
SHIELDS: Mitch McConnell, a number of Republicans, both in the House and the Senate, have told me that she's followed textbook form in getting along in the Senate, I mean, that she has played down her notoriety and been deferential to her seniors and so forth.
Does this book -- is that, A, accurate reading of it, and B, is it... does this book change any way?
MCCONNELL: Yes, first let me say, the woman I was paying attention to this week was On Song Suchi (ph), the Nobel Peace Prize activist in...
MCCONNELL: ... Burma.
But with regard to Hillary's acceptance in the Senate, I think she has played it smart. She's come in, kept -- at least until recently -- a rather low profile, worked on a bipartisan basis where she could, and played it smart. I think she's gotten off to a good start.
SHIELDS: Does the book change that in any way?
MCCONNELL: I'll pass on the book comment.
NOVAK: (UNINTELLIGIBLE) does anybody dispute what I say, though, that this is an inoculation...
HUNT: Yes, I do.
NOVAK: Wait a minute, (UNINTELLIGIBLE) explain it...
NOVAK: ... inoculation in getting ready for a presidential campaign down the line?
CARLSON: I agree.
SHIELDS: Bob, it's an open question. Anything you say, I just have to dissent.
NOVAK: No, no, I'm serious. (UNINTELLIGIBLE) let's be serious...
NOVAK: ... serious question...
HUNT: No, I think obviously you're right about that, and I think someday that she probably thinks she'll run for president. I will be very surprised if she's ever president of the United States.
SHIELDS: And I would say...
NOVAK: ... but that isn't the point, whether she makes it or not...
NOVAK: ... I don't -- I can't predict that. But what I am saying is, this book is, is, is, is, is, is, is cutting away all that underbrush, taking away all that -- all the questions you had. And people are -- are they suckers enough to pay $28 for that book, they're suckers enough to believe it.
HUNT: That's called the market system, Bob.
SHIELDS: Bob, if she were on your side, you'd say it was a shrewd political move. And I do not understand why she makes your blood boil. But boy, she does.
Now, next -- Mitch McConnell, we thank you for being with us.
Coming up on the second half of CAPITAL GANG, our "Newsmaker of the Week" is Richard Holbrooke, former U.S. ambassador to the United Nations. "Beyond the Beltway" looks at danger and death in Iraq with CNN correspondent Ben Wedeman. And our "Outrage of the Week." That's all after the latest news headlines.