TERENCE SMITH: With me are syndicated columnist Mark Shields and Wall Street Journal columnist Paul Gigot. Welcome to you both. Paul, as Richard Armitage just said, the U.S. Airmen, the crew, are on their way home for Easter. How does President Bush look after these 12 days?
PAUL GIGOT: I think he looks pretty good, Terry. If you look at the outcome, we got our people back, did so with our prestige internationally largely intact. And if you look at the domestic political reaction, Bush is getting pretty good grades from, you know, everyone to the right of Gary Bauer, which is about 97 percent or 98 percent -- 99.8 percent of the American public if you consider the results he got in New Hampshire. So I think he is getting... I think he has emerged from his first crisis in pretty good shape.
TERENCE SMITH: Mark, what do you think?
MARK SHIELDS: Stylistically the reviews have been good -- words like not impulsive, not impetuous, measured, prudent --stylistically that is. And I think that the White House has done a very effective job of communicating to not previously friendly news organizations this sense that George W. Bush was very much in charge, and he was up early, up at 5:30 -- we learned -- making calls, finding out if they were exercising, 24 Americans held in captivity, whether they had Bibles, demanding answers. So I think stylistically he came through. I think there are other problems and I think the problems are real but I mean, the stylistic reviews are very positive.
TERENCE SMITH: Paul, do you think there is a problem with the more conservative wing of the party? In other words, when as Jim mentioned earlier, when Bill Kristol and Robert Kegan, who first described this as a national humiliation --
PAUL GIGOT: Before it was over, well before it was over.
TERENCE SMITH: -- conclude that in their words the U.S. lost and China won, are they speaking for themselves or for a significant wing of their party?
PAUL GIGOT: Significant wing, no way. I mean, I think if you look at my newspaper, for example, for Charles Krauthammer of the Washington Post, one of the premiere national security conservatives in the country, it has been a general sense that this turned out pretty well. I think that Kristol and Kegan if they represent any wing of the party, it's a little bit of the McCain faction. Gary Bauer is also -- was also a John McCain supporter, so there is some tension there within-- between George W. Bush and the McCain people.
There is some residual distrust for China among part of the Republican Party in Congress that would like to have trade sanctions applied against China. And they got some ammunition with this, there is no question about it. But I think the way it was resolved, and particularly if going out from here President Bush shows the Chinese that they have paid a price for this, in particular with say a robust arms sales package to Taiwan, more US and Taiwan defense coordination, maybe doing something on the Olympics, something like that, to diffuse whatever residual distaste there is for China's behavior on this, I think that he can manage that problem with his right.
TERENCE SMITH: Mark, does that raise the stakes then for votes like the Taiwan arms sales coming up?
MARK SHIELDS: I think it does, Terry, but let me say a good word for Bill Kristol. What Bill Kristol is addressing is not whether he represents Gary Bauer or John McCain or whatever. There has existed in the United States for a long time a major gulf, a widening gulf between popular majority opinion on China and the elite opinion, minority opinion. The elite opinion, editorial pages, economic interests, intellectual academic community and the people, by a four to one margin American people think Chinese are brutal oppressive regime, an adversary if not an enemy.
And the argument has been for 20 years now, as Jim Webb pointed out in Paul's paper today, Jim Webb, former Secretary of the Navy, a remarkable author and very thoughtful observer. He said for 20 years we said trade is the answer. Free trade, my goodness, it is going to lead to liberalization and it hasn't. I mean, what it has done is ended up, the people who have been involved in that trade have become the apologists, the defenders, and the hostages to the more oppressive regime. That's the point that Bill Kristol -- and the longer this went on with 11 days, popular opinion became more assertive and said, look, what we said about China is true. They're really not an emerging democracy. And I think the substitution of trade for a policy of human rights or a policy of democracy has been shown wanting.
PAUL GIGOT: Nobody said that they're an emerging democracy. Nobody I know has said that.
MARK SHIELDS: Liberalized -- decent to their own people.
PAUL GIGOT: Over time - over time a policy that is tough on security but engages on trade has a potential to open them up because you build a middle class, and that's the sort of thing that can undermine an authoritarian regime. That's what the debate is about; it's not whether they're authoritarian. Of course they authoritarian. The question is how do you best open up that society without leading us into a war.
MARK SHIELDS: That's a good question. How did the actions of the United States this week strengthen the hand of those who stood in Tiananmen Square, those who fought for freedom in China, those who have dared to be the defenders of democracy in that benighted place?
TERENCE SMITH: Answer your own question.
MARK SHIELDS: I think their position was weakened, and there's no question about it. They didn't find the United States as their ally, their supporter. They were more interested in buying cheap T-shirts, getting cheap labor.
TERENCE SMITH: Paul, from Richard Armitage and, before that, from Defense Secretary Rumsfeld, we heard a new tone today, a much tougher, harder negotiating line vis-à-vis China. Is that speaking in addition obviously to the Chinese, is it speaking a little bit to the critics perhaps on the right?
PAUL GIGOT: Oh, I think it probably is. It is always-- I mean look -- it's difficult to do anything like that and your options are very limited when they have 24 of your people over there and you want to get them back. So, once they're back, I think then you can sit down and reassess the policy, and I think that's why I said before, you know, that this isn't over in the sense that the administration is now going to have a debate, I'm quite sure and the country is going to have a debate about whether China is going to pay a price and how much of a price. And there is no question there are going to be some people in the administration who say, look, we got our people back, let's not rock the boat.
There are others who are going to say -- and I tend to agree with them -- that when they do this to America and keep our people over there, you've got to show them that there is some price. And the thing that drives the Chinese crazy is Taiwan. And we have an obligation under the Taiwan Relations Act -- and it is a democracy, remember. So I think that is where you'll see the administration put some of its emphasis. And you're right, it is in part aimed at a domestic constituency and the critics, which include some on the right, but also the labor left, which doesn't like the trade deficit and that's probably their biggest concern -- they need to move up the middle within both parties to maintain the policy.
TERENCE SMITH: But we have a real dispute coming up, do we not, in Congress over Taiwan and policy towards Taiwan, not just these arms sales, growing out of this?
MARK SHIELDS: I think it was there; I think this has given it greater spark and greater impetus. Henry Hyde, the conservative chairman of the House Foreign Affairs Committee, said he is revisiting his own position on most-favored-nation status for China. See, I think the premise has got to be a factor. If in fact unfettered trade and economic commerce between an authoritarian, a totalitarian regime and the United States led to democracy, led to liberalization, my goodness we would have elections in Saudi Arabia, wouldn't we? Wouldn't Kuwait be a booming democracy at this point? Somehow, it doesn't quite work out that way.
TERENCE SMITH: Let's move on here a little bit. Also this week the President submitted his budget, and what did it tell you, Paul, about this President and its reception to commerce?
PAUL GIGOT: It tells me that he knows that he has to-- he is going to have a fight on spending on his hands and he's going to have a fight on spending not just with Democrats but members of his own party.
TERENCE SMITH: Lo and behold.
PAUL GIGOT: No question about it. Now the Republicans in Congress and Bill Clinton had kind of a little wink and a nod deal going in the last couple of years. They both yell at each other for spending too much. You're breaking the budget - you're breaking the budget -- but they would wink and agreed to spend a lot more at the end of the session.
TERENCE SMITH: Now?
PAUL GIGOT: And now I think Bush is looking and saying I want to get this tax cut through. If I want enough money for Social Security, I have got to show some spending restraint. And spending increases have upwards of 8 percent each of the last two years. He's put a budget that is four and drew a line there. Now, I think he is probably going to have to give. He knows for example that he's going to have to give agricultural money, which is why he proposed almost no increases or very few increases this time. But he is signaling already and Vice President Cheney did on Sunday that he may have to veto some bills if they get carried away.
TERENCE SMITH: So these two positions on budget and tax cut, they merge in a sense.
MARK SHIELDS: They do merge but I'd just to point out over eight years of Bill Clinton spending went up 3 percent -- average 3 percent. Last year -- lowest as a percentage of Gross National Product since 1965. And George Bush comes in with a 4 percent increase. This is a man who ran of course against runaway federal spending last year. I just think what it really signals, the Democrats blew it quite frankly this week. I would have claimed victory if I were the Democrats. This is fellow who came in and said he was running against the federal government; he wants to increase spending, for goodness sakes. This was the end, this was sounding the final death knell to the Contract with America. Republicans were going to abolish three cabinet level positions, 200 programs, Endowment for the Arts, legal services. What happened? I mean, talk about taken for granted the conservative wing of his party. I mean, George W. Bush, I thought the spending obviously conspicuous exceptions like pediatric doctors training and so forth - where he's vulnerable - I just think the Democrats should have said welcome to the club, as he should have on taxes last week to the Democrats, welcome to my position.
TERENCE SMITH: Okay. Quick final comment, Paul.
PAUL GIGOT: Mark has declared the final death knell on the Contract with America about every year since it started in 1995. Look, it was long ago that the spending discipline of the Republican Party vanished in Congress. The question is: is Bush going to be able to restore any semblance of it?
TERENCE SMITH: All right, Paul, Mark, thank you both very much.