TERENCE SMITH: That's syndicated columnist Mark Shields, and Wall Street Journal columnist Paul Gigot. Gentlemen, welcome. Paul, this week the president threatened to veto on the Kennedy-McCain version of a patients' bill of rights -- a bold move. Is it smart politics?
PAUL GIGOT: I think it's smart politics. I think you can blame three people for it -- outside the White House. One is the Speaker of the House Dennis Hastert, a Republican and two Senators, both Democrats. John Breaux of Louisiana, Ben Nelson of Nebraska, both against that version of the bill, and both think that there's enough Democrats potentially who now support the Kennedy-McCain bill. But if they think that bill can't pass, will never become law and of course with a presidential veto it will not if he follows through on that, they might move over to the compromise legislation that John Breaux is sponsoring with Bill Frist of Tennessee, a Republican and Jim Jeffords, the Independent who has left the Republican Party, of Vermont. So I think it's tactical politics. It's designed to move the bill in a direction that Bush thinks his constituencies can more better live with. There are a lot of Republicans in the Senate - maybe as many as 40 -- who don't even like the Breaux version of the bill. Bush had to issue this veto or he would have been faced with a more difficult choice.
TERENCE SMITH: And he saw compromise from Speaker Hastert.
PAUL GIGOT: Well, Speaker Hastert wants a bill. He's wanted it for a couple years now. He wants it off the table. He wants to move on. He would like to get an achievement for the Republican Party dealing with health care going into the 2002 election.
TERENCE SMITH: Mark, what about the politics of it?
MARK SHIELDS: I dissent on the politics of it. I think the president was trying to buck up support among Republicans this week. This is an impossible position for the Republicans. He's facing overwhelming majorities both in the Congress and in the country that want patients' bill of rights that want it as written, that 70 Republicans in the House voted for this bill two years ago -- basically this same bill. With all those noxious, pernicious provisions the President warns us about. I think what the President... His life is complicated, Terry, by the fact that compromise is going to be inevitable. He's going to have to make it.
What Democrats are truly terrified of is that George Bush will be a shrewd politically as Richard Nixon was when the Democrats set the legislative agenda and he ex-appropriated the Environmental Protection Agency and tied Social Security payments to cost of living increases and advocated national health insurance, took away basically their legislative agenda as Bill Clinton did in 1995 when the Republicans took over the Congress, Bill Clinton signed the Welfare Reform Act. Bill Clinton cut capital gains tax. Bill Clinton balanced the budget. What it ends up doing is isolating that wing of your own party that's been most loyal to you, liberal Democrats in the case of Clinton, conservative Republicans in the case of Nixon but it helps the President. And I think that's what Democrats are terrified of that. And I think the veto indicates that George Bush is not going to practice the kind of middle politics.
PAUL GIGOT: I disagree with that. It's shaping the bill. He's already signaled he's going to... they're going to compromise. I mean there's no question that philosophically Republicans are on the defense on this. I mean, they're really talking about two different versions of a big new regulatory regime for the private health care market. There's no question about that. But he's got a perfect foil -- in the health care, in the trial lawyers. Bush has a perfect foil in the trial lawyers on this bill. That's what he's making the linchpin of his veto threat. Trial lawyers are only people who are less popular than journalists in this country and maybe politicians. So there's no question that he can... He's going to try to shape this legislation. There's one other thing he's got to do. This is the first real test of Bush with a Democratic Senate. If he rolled over on this, Tom Daschle was going to be beginning to see that he was an easy mark. This is also about Bush versus Daschle.
TERENCE SMITH: Is it shaping up that way?
MARK SHIELDS: Well, I'll say this: George Bush does not to be seen as the champion in the tribune of American insurance companies. I dissent with Paul. I think the Republicans have put themselves in a terrible position. They're saying the only place you can sue is in federal court. I mean this is the states' rights party. These are the people who believe in local control - local access. You can't go to your state courts. You have to go to federal dockets where the dockets reach from here to Omaha. I really think that Bush is in a tough, tough position here politically. The idea of compromising with Tom Daschle probably would help George Bush who got very bad news in polls this week.
TERENCE SMITH: Another subject. The President's political adviser, Karl Rove, is back in the headlines this week for meeting with Intel executives while he still held more than $100,000 worth of Intel stock. Political trouble?
PAUL GIGOT: Well I think he wished he didn't have that meeting. Tom Daschle, the Senate Democratic leader, is not known for practicing the politics of charity. He's pretty hardball player. He said we're not going to investigate this. I think he decided that because there's really not a scandal here. At most there's just the appearance of some kind of impropriety -- even less than an appearance because there really isn't a big fact base behind this. He met with him, he says, plausibly because he hadn't received... the White House counsel told him don't sell your shares until you get a letter of divestiture that allows you to get a tax break on your capital gains stock. There's no suggestion that he actually was decisive in this meeting. The other members who were in the meeting said no, in fact, he said other people in this administration have something to do with that. Karl Rove is an influential person in this administration. There's no question about that. But I don't think on this one there's anything there. That's why Daschle decided it wasn't worth pursuing.
TERENCE SMITH: Mark, what do you think?
MARK SHIELDS: Fact: Intel has a lobbying staff of ten here in Washington. It's a big company. It wanted to divest to a Dutch company. It needed administration approval in the Department of Justice. That had not been forthcoming. Fact: The chief lobbyist of Intel says we know what we're doing in Washington. We knew what we were doing when we met with Karl Rove. Karl Rove then sent the chief executive officer of Intel over to meet with the Vice President of the United States and the National Economic Council. Paul is right. He's involved in every decision. He's probably as close to the President politically as anybody. When Karl Rove calls and asks you to meet with somebody and you're a part of this administration you do it. You think you pay some attention to it. You don't just give the guy a pass. Fact: After the meetings within a matter of weeks the Intel's merger was approved.
This is an administration that said we are going to be different, we're not going to give even the perception, the remote perception. This is a man who could have put his money, according to my ethics lawyers, the people I've talked to, into a blind trust right at the outset. He chose not to do that and instead opened himself up to these questions. They're legitimate questions. Henry Waxman the Democratic member of the ranking member of Dan Burton's committee where we want to put things behind us who has already issued 100 subpoenas in the past four months of Clinton's administration folks has not. He's just written some questions about this and wants to know exactly what went on in the meeting. Legitimate. It's not a witch hunt but I think it's a legitimate inquiry.
TERENCE SMITH: Does it have legs? That's the real question?
PAUL GIGOT: It has no legs. It has no legs. The reason he didn't set it up in a blind trust is because he wanted to sell it. You can sell your holdings or you can put it in a blind trust. Rove said I want to sell it. The White House counsel said wait a minute we've got to through these bureaucratic hoops and give you a letter of divestiture. You won't pay as much tax. Hold off.
TERENCE SMITH: At that point wouldn't somebody concerned about appearances say no I better not meet with the executives that company?
PAUL GIGOT: The White House Counsel's Office in my reporting did say that. The White House argument is that the letter that asked for the meeting from Intel made no mention of this story of the... Of the merger. Therefore he had no idea it was going to come up.
MARK SHIELDS: This is a guy who had a quarter of a million between $100,000 and a quarter of a million dollars of Intel stock. You're told when you go to work for the federal government in the Executive Branch any time there's a perception you have to ask for a waiver of a meeting involved in a company in which you have a substantial share. That's a substantial share.
TERENCE SMITH: No such waiver in this case.
MARK SHIELDS: No. No evidence of waiver. That's one of the questions that Waxman asked. It's a legitimate inquiry. Was there a request for a waiver?
PAUL GIGOT: Why aren't the Senate Democrats looking into it? They don't usually lay off these things as an act of....
TERENCE SMITH: What about that, Mark?
MARK SHIELDS: What about it? Is there an investigation? Henry Waxman has not asked for an investigation. Henry Waxman wrote a letter. It's not unlike the whole matter of Dick Cheney. Certain newspapers-- I'm an avid reader of-- seven years ago were castigating and crucifying Hillary Rodham Clinton for having secret meetings of the health task force. Yet Dick Cheney had every oil mogul in the world in on his energy thing and I haven't heard the same hue and cry demanding…
PAUL GIGOT: What does that have to do with Karl Rove?
MARK SHIELDS: If the inquiry with Henry Waxman....
TERENCE SMITH: Meetings in the White House.
MARK SHIELDS: That's right. Meeting in the White House.
TERENCE SMITH: One other, Paul, on Tuesday the New York Times and CBS News came out with a poll showing that the president's support is slipping. Should he be worried?
PAUL GIGOT: I think the poll was hyped -- to be honest -- by the Times.
TERENCE SMITH: Hyped?
PAUL GIGOT: They played it up. It's their poll. By hyped I mean the significance of it. It fell... His poll rating fell four points in terms of approval. In that Poll Gallup had him at 55. The Times at 53. He's been mostly in the 50s throughout this with the exception....
TERENCE SMITH: Should it be slipping at this stage?
PAUL GIGOT: If there's any concern-- and there is some, there should be some concern at the White House-- I think it's explained by two things: Energy and the economy. 40 percent of the public....
TERENCE SMITH: And the economy, not the environment? The economy?
PAUL GIGOT: Well, is linked to the economy. But... Is linked to the environment. I'm confusing my He's. In that poll, 40 percent of the public said the economy is getting worse. Only 9 percent said it's getting better. The wrong track number, which is, I think, if you look at the poll seems to be rooted in economic anxiety, gas prices and so on is 53-42. So the country, I think, is sayings, look, we're a little anxious here and we're not certain and that is redounds to the detriment of a president.
TERENCE SMITH: Mark?
MARK SHIELDS: Anxiety is rampant in the ranks for a very simple reason. The worst thing a pollster can say to any candidate when a poll comes back, "Don't worry, boss, you have time to turn this around."
TERENCE SMITH: That's not good news because George W. Bush is up until 2004. These are the same numbers that Bill Clinton had in 1993 at the same stage basically. Now Bill Clinton, as we all know, came back and won a thunderous re-election. The problem is this: The problem is that Bill Clinton's numbers in 1993 came after three attorneys general, after the Cristo haircut on the tarmac at Los Angeles Airport, after the firing of the Travelgate, and after, you know, you name it, the energy tax back-off -- all sorts of problems. George Bush's bad numbers come after what a favorable positive reviews mostly of his trip to Europe, of his two biggest legislative initiatives having been passed, education and taxes.
TERENCE SMITH: So you interpret.
MARK SHIELDS: So my interpretation is this is the best we've had. This is good news. He's at the top of his game. And the thing he has to be most concerned about is this: Just as it happened to Clinton in 1993 and 1994, is that the members of your own party-- and I think we may get nervous and skittish in the ranks. Yesterday we saw 70 House Republicans break from the president on off shore drilling in Florida. That may have been a reflection of the poll.
TERENCE SMITH: We'll have to leave it there. Thank you both.