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Political Wrap

February 8, 2002 at 12:00 AM EDT


TERENCE SMITH: That’s syndicated columnist Mark Shields and David Brooks of the “Weekly Standard.” Welcome to you both. Mark, the Enron hearings, as we’ve just been discussing, were of course the big story this week in Washington. What was the political fallout from those?

MARK SHIELDS: Well, the political fallout personally, Terry, was that after close to three dozen years in Washington, I was prepared only for Fifth Amendment being taken by people who look like the cast of the “Sopranos” with pinky rings testifying that they weren’t part of the mob or veterans of the Spanish Civil War, lefties, but to see captains of industry, to see these people in thousand dollar suits or twelve hundred dollar shoes doing it was really kind of shocking in itself.

I don’t think there’s any question that the political impact is seen right now in the defensiveness on the part of the White House on the campaign finance legislation that, reform — elimination of soft money, which Enron and a lot of other individuals and institutions participate in. And I think it is just sort of a general defensive crouch that the administration is in. Dick Cheney’s old company, Halliburton, paid a $2 million fine for over billing the government on the cleanup of Fort Ord in California. I think that there’s sort of a defensive crouch on what had been a great credential, those – those corporate experiences. So I think there is a real political fallout right now.

TERENCE SMITH: David, what do you think? Is there some sort of collateral political damage here?

DAVID BROOKS: Yeah. I’d say minimal. I’d say first it was only the sleeves of the suits that were a thousand dollars; the rest was forty-five hundred at least. I thought politically — business, it’s a great story, deepening, getting more complicated. Politically, it seems to me, it is withering. The hearings were ineffectual.

If you are going to hold a show trial, at least win the show. But this guy, Jeff Skilling, walked all over these congressional people with a calm mastery. If only you knew is what you saw at that hearing, you would think Skilling was the professional and the congressmen were sort of petulant teenagers getting excited over nothing. They could not crack him, though the circumstantial evidence is terrible for him. As far as the Bush Administration goes, we’ve learned very little.

There has been very little evidence they gave special access to Enron. We’ve learned on the task force report things Enron wanted were things like a preference for natural gas over coal. The Administration went the other way. They wanted some sort of diminished regulation of the transmission lines across states. The Administration went the other way. So what we are–.

TERENCE SMITH: Although of course during the California power crisis, they did keep hands on.

DAVID BROOKS: They went with Enron when it’s sort of pro-deregulation, which is where the Administration was going anyway. But if you look for special favors against the interest of the Administration and natural predilections of the Administration, it’s really not there, so you get a lot of access, very little favors. It seems to me it’s becoming a more financial story, less of a business story.

TERENCE SMITH: Mark, you mentioned campaign finance reform comes up for a vote next week finally in the House.


TERENCE SMITH: A bill similar to that passed by the Senate before.

MARK SHIELDS: That’s right.

TERENCE SMITH: A fearless forecast?

MARK SHIELDS: I think it will pass the House. I don’t think it is going to be easy, but I think that when the Speaker of the House, Denny Hastert, a man who is known for his sense of collegiality, goes public to the point and says this is it for our Republican Party — without soft money we would not have a majority in the House of Representatives, I mean it’s an indication not simply the Republicans but the Democrats as well, that narcotic dependence of the two parties upon this soft money.

And I think the fact that Dick Gephardt, the House Democratic leader, has worked tirelessly on behalf of Shays Meehan is not only his commitment to reform but also his understanding that in the long run with George Bush in the White House and the Republicans with their natural allies in business and deep pockets that soft money is a battle that the Democrats really can’t win.

TERENCE SMITH: David, given Speaker Hastert’s remark, are the Republicans going to the barricades?

DAVID BROOKS: They’re going to try. He called it Armageddon. You know, last time a Republican used that word Teddy Roosevelt said we stand at Armageddon and battle for the Lord. That’s when the Republicans were pro-reform. I think they will fight it, but I think they will lose and I think they know they will lose.

They may try to get some sort of an amendment passed in so the House and the Senate have to get in one of these negotiations, which mucks it all up, but I think they know they are going to lose. They know Bush is going to sign it and they think the courts will strike down half of it. But I do think we will sit here and talk about the passage of campaign finance.

MARK SHIELDS: Just one thing David spoke about Skilling, I disagree with David’s assessment of Skilling’s performance. I thought he came off as not only arrogant but these were people who said all of us who ask questions about you don’t have any assets, how do you have money? We didn’t get it. We didn’t somehow grasp it. I thought he was very selective in his memory and his amnesia, and as well, I didn’t think he gave an explanation.

DAVID BROOKS: This is a serious issue though. These hearings, are you going to try to get information or are you going to try to get sound bites? These hearings are about sound bites. They’re about these guys getting excited for 30 seconds and then moving on.

TERENCE SMITH: All right. Let me ask you about the other big story in Washington this week, of course. The President came out with his budget. Explain to us, David, what a budget– a President’s budget is and what it isn’t?

DAVID BROOKS: It’s really long. First of all, it’s a selection of priorities. It’s also a first bid on what will be a long very complicated set of negotiations, and the President’s budget said, in a sense, we are going to put priority on defense and on homeland security. We are going to really cap or freeze all other domestic spending, and we are going to run a slight deficit, a hundred or eighty billion dollars over the next couple of years. That’s our priorities.

The Democrats are in an interesting position because they haven’t yet hardened on their priorities. Right now they’re saying we don’t like this capping of domestic spending. We don’t like the deficits. Well, you can’t have both. If you want more domestic spending, you’re going to get more deficits. And the Democrats really have to make that choice.

TERENCE SMITH: Mark, what did you think when you saw the priorities as laid out by the President?

MARK SHIELDS: I think I just — I agree with David that a budget really is a statement of a country’s moral values. This is what we think is important, this is where we ought to spend more; this is where we ought to spend less. There is no question that the president is at an enormous political advantage on defense spending and on homeland security, Terry. Why? Because A, he is at 85 percent approval.

The country supports him and at the same time the Democrats are supportive as well, because there is no real room for them to criticize there. At the same time, while the President has this war budget on spending, on raising the money, it’s things, let’s get back to the country club and have another glass of chardonnay. I mean there is absolutely no sacrifice being asked of any of the best off.

All the cuts that David talks about are basically for working class people and middle class people, and the best off, those folks who do write soft money checks and those who don’t or just support the symphony, they aren’t paying any price at all. And I think in that sense there’s a real statement about this is a war budget on spending, but there’s not going to be any inconvenience or any discommoding here at home.

TERENCE SMITH: Is there a political downside to that or to the notion that certain projects that the President himself has called for, like education, naturally can’t have as much money?

DAVID BROOKS: There are some tough cuts in here, real cuts actually, cuts in housing, teacher training, the space station, education. I think some of them are defensible, especially education. The education budget over the past six years has nearly doubled. It seems to me if you are going to take a pause, you’re not cutting bone there. But there is no question this is a budget which does– is politically very difficult in an election year. The Democrat though have to decide, are we going to be for tax hikes, are we going to be for running deficits? They don’t have the courage of Mark’s convictions right now and they are in a bubble on that.

TERENCE SMITH: The stimulus bill – that became history this week.

MARK SHIELDS: It did become history. And the stimulus bill will be of interest and importance, Terry, only if the economy hasn’t improved in the fall. And then somebody can say, gee, if we passed a stimulus bill and I was for it and you weren’t or whatever. But I don’t think that — its passing is not being mourned by conservative Republicans who are, unlike David, worried about a balanced budget.

TERENCE SMITH: Okay. We had another extraordinary scene on the Hill, an extraordinary exchange, in fact, yesterday between the Secretary of the Treasury, Paul O’Neill and the powerful chairman of the Senate Appropriations Committee Robert Byrd. The chairman was berating Mr. O’Neill for his earlier criticism of congressional rules that impose limits on Administration spending. But the Secretary refused to back down, saying he had spent a lifetime fighting against rules that he said limit human potential.

PAUL O’NEILL: We had rules that said colored don’t enter here. That was a man made rule. And there are a lot of those same kind of rules that limit the realization of human potential. And I’ve dedicated my life to doing what I can to getting rid of rules that so limit human potential. And I’m not going to stop.

SEN. ROBERT BYRD: Mr. Secretary, I’ve been around a long time. I try to live with the rules. You were specifically talking about the Byrd rule.

PAUL O’NEILL: I was talking about all rules that limit human potential and the realization of human potential. And inferring something different is fine if you wish to do so, but I’d also like to say because there was an inference in your remarks that somehow I was born on home plate and thought I hit a home run, Senator, I started my life in a house without water or electricity, so I don’t cede to you the high moral ground of not knowing what life is like in the ditch.

SEN. ROBERT BYRD: Well, Mr. Secretary, I lived in a house without electricity, too– no running water, no telephone, a little wooden outhouse.

PAUL O’NEILL: I had the same.

SEN. ROBERT BYRD: I started out in life without any rungs in the bottom ladder, you know? And I’m talking with you about your comments concerning the Byrd rule and the people who wrote these rules. I’m not talking about putting any halter or break on anybody’s self-incentive, anybody’s initiative.

TERENCE SMITH: An amazing exchange. Mark, what does it tell you about relations right now between the administration and some very powerful Democrats on the Hill?

MARK SHIELDS: Well, I think that there’s no question that the two administration figures with the most tense relations on Capitol Hill, you saw one Secretary Paul O’Neill of the Treasury Department and Mitch Daniels, the Budget Director, both of whom have taken a lot of beatings for the President.

A lot of people don’t want to criticize the President, who’s at 85%, so they do take on the cabinet officers. I think Paul O’Neill there, what we saw, was somebody who– this wasn’t rehearsed. This wasn’t professional wrestling. This was not sound bite stuff. This was very real. What it came down to was, I mean we had to exempt from the bite, was Bob Byrd, the chairman of the Appropriations Committee were saying– was saying a lot of us were here before you came. I’ve seen a lot of Secretaries of the Treasury. That’s absolutely true.

There is a sense that we are going to be here after you’re gone, even at the age of 84, and I wouldn’t bet against Bob Byrd. So that’s the tension you see personally and politically as well as institutionally.

TERENCE SMITH: Is there a political consequence, David?

DAVID BROOKS: I think in the long term – my first question was — 50 years from now are we going to see Senators saying I grew up in a home without a T-1 line. We didn’t have HBO, no Showtime. You know, am I ruining my kids’ lives because we do have a bathroom – we have two bathrooms at home. It seems to me, the problem here is Bob Byrd’s problem.

There is a moral hazard in being in the Senate a long time. Senators lead these queen bee lives; they’ve got 60 staffers puffing them up; they’ve got lobbyists bowing and scraping, and if you don’t remind yourself of your own humility, you get sort of addicted to flattery. And we actually didn’t show some of the toughest Byrd comments here, but there were tough comments; I thought they were insufferable comments, to be perfectly honest.

They reminded me of some earlier tone that Fritz Hollings, the Senator from South Carolina had in front of Alan Greenspan earlier. It seems to me there is a run on vanity going on and incivility in these hearings.

TERENCE SMITH: But is there a consequence to it in terms of getting the budget that we were talking about, getting that through?

MARK SHIELDS I think there is some virtue and some value in bluntness. I think we are seeing bluntness instead of the distinguished gentleman, and if anything there is excessive deference shown to Secretaries of the Treasury over the years. If you want to talk about people who are puffed up historically, traditionally, and occupationally – I think there is a political price to be paid.

And I think that — put it this way, if you are going to take on two people, the chairman of the Appropriations Committee in the House who is a Republican, Bill Young of Florida, and the chairman of the Appropriations Committee in the Senate, Bob Byrd, a Democrat, from West Virginia are right now not kindly disposed to the budget that the President has just laid out this week.

TERENCE SMITH: Okay. And of course there are no puffed up journalists in Washington, are there?

MARK SHIELDS: I beg your pardon.

TERENCE SMITH: Thank you both.