RAY SUAREZ: And to the analysis of Shields and Brooks, syndicated columnist Mark Shields and David Brooks of the "Weekly Standard."
Well, the Senate's got a number. The House has got a number. They're $224 billion apart. What do we seeing happening in the great tax battle of 2003?
DAVID BROOKS: We are seeing the White House lose control of the process. They proposed as a centerpiece this big dividend tax cut. That foundered for a couple of reasons, one of which it was not popular with the business community, because the dividend tax cut empowers shareholders vis-à-vis management.
The second thing about it, it's expensive, $400 million. The Senate said we are not passing any tax cut bigger than $350 million... billion in both cases. So what the White House did, instead of the White House saying okay, we can't get it through, they say, okay, let's push harder, let's shout a little more. Somehow we'll get it through. And that just left a vacuum as people on the Hill realized that's not going to fly.
So Bill Thomas in the House said "okay, I'm going create my own tax package." People in the Senate said "we'll create our own tax package." So what you have got are two compact packages of different sizes with a lot of little things all put together.
MARK SHIELDS: It bothers me that David didn't pick up the talking points. It's not a tax cut package; it's a jobs package; that's what it is. Republicans, that's become a mantra because they realize the very thing, that the tax cut itself didn't sell. You have to sell this as it's going to create... and the estimate has already gone up to 1.2 million jobs by the end of 2004 - this is his package ---
DAVID BROOKS: You're against it.
MARK SHIELDS: I'm not against it. I'm saying they're setting the bar pretty high for an administration that has been there while 1.9 million jobs have disappeared since February of 2001. That's the first element. There is a sense that "we have to do something" among Republicans at a time when Republicans ought to be riding very high; I mean, the president is at 70 percent in the polls, the Republicans control both Houses of the Congress.
And the House and the Senate Republicans are bickering back and forth like two kids in the backseat of a really long automobile ride. I mean, they're just not getting along, they're accusing all sorts of things. House Republicans said today after they passed their bill that there is no way in the world they would -- that any tax increases which is what the Senate Republicans did. They passed $71 billion worth of tax increases to justify the $421 billion in tax cuts to meet the 350 figure that David mentioned.
So, you know, House Republicans said no way in the world. We didn't come to Washington to cut taxes. So it's really, it's recrimination city right now.
RAY SUAREZ: How did the dividends tax become such an important part of the conversation when, if you believe the economic reporters, not very many people pay it in 284 million Americans, and a lot of people who pay it, don't pay that much.?
DAVID BROOKS: Enron. It is a management issue and it's really supported by a few economists - not by the business community but a few economists in the White House. The theory behind it is that you have this situation in the '90s where people were induced into buying stock because the price would go up. That's why they bought stock.
And that allowed the managements to monkey with the numbers as long so the stock price always went up. The idea was if you encouraged people to give dividends, then people buy stock to get that dividend. And that's real money. That's actual dollars and cents, not numbers on a ledger somewhere.
So the idea was it encouraged dividends and that way you get a real economy, a real stock market. It helps with corporate management. It was not a stimulative idea. It is now sort of being passed off as that but it was an idea to solve the problems of Enron and all those other companies that we remember from a couple years ago.
RAY SUAREZ: Are the Democrats in a weird position on this one? It's not their fight, really.
MARK SHIELDS: No, it isn't the Democrats' fight. The Democrats in the Senate have a much milder package. The one thing they got in was $20 billion in aid to the states, which the Senate Republicans put in to win support, and again the states that are suffering economically right now facing real budget woes, cutting services and increasing taxes and House Republicans again have vowed that they would not, they wouldn't accept that.
So, you know, Democrats are really sort of privileged observers here and I think probably taking some perverse delight in the fact that Republicans are not getting along.
RAY SUAREZ: But they can't put a lot of daylight between Republicans and themselves on this one? They can't be against tax cutting, can they?
MARK SHIELDS: No. I mean, the Democrats were the ones that provided the votes in the Senate for the $350 billion that David mentioned. That's become the sticking point between the two Houses. That's why the contortions had to be put together in that Senate finance package to come up with the $350 billion, the $421 billion in cuts and the $71 billion in tax increases.
RAY SUAREZ: Well, since the last time you fellows were here, there was a Democratic debate in South Carolina and a new candidate entered the field. Did you watch the debate?
DAVID BROOKS: No, but I read the transcripts. Like the rest of the country, I couldn't care less. No, I'm just kidding. Public opinion actually is lower, even compared to this level last year... this time in the last election cycle -- public interest is much lower.
But I did read the transcript, so I do have an expert opinion on it. Picking up on something Mark said last week, which is there seems to be a buddy system in the democratic race. Have you John Kerry and Howard Dean, both of whom have to win in New Hampshire. They're going after each other for the liberal side.
For the popular side you have Dick Gephardt and John Edwards going after each other. Gephardt has the lead in that because of his dramatic health care plan. Then what you would call the moderate side, Joe Lieberman and Bob Graham going after each other, running for the nomination of what you might call the centrist, McCain-Lieberman Party, a party that unfortunately doesn't exist.
So, you have these two sides going after each other and everybody has their picks of winners and losers. From what I hear of people in New Hampshire and Iowa, there is a sense that Howard Dean has lost some of the momentum he had when he really was generating a lot of excitement a couple weeks ago.
MARK SHIELDS: I think David improved upon my analysis last night. No, I agree with him. I agree with him. I think there's a couple of overlaps here. I think that there's a difference between what one could call a strategic approach to the campaign and the tactical approach -- the strategic being this is why I want to be president, this is what I'm going to do as president. Dick Gephardt, I think, has laid down the marker for that. He is the only candidate really who said this is what a Gephardt presidency would look like. This is how would I define it.
To some degree, Howard Dean does represent that in the sense of, by having laid out pretty clearly a philosophy early on. Tactically, that is "vote for me because I can win, I'm the most electable Democrat," Joe Lieberman and Bob Graham.
And the argument is, look, I've got more appeal to voters of the other party, voters in the middle. I'm your best bet in November.
There is a whole graveyard of political figures who followed this strategy: Senator Edmund Muskie, a very wonderful man for whom I worked in 1972. Nelson Rockefeller, the governor of New York. William Scranton, the governor of Pennsylvania. Howard Baker, the senator from Tennessee, George Herbert Walker Bush who wan against Ronald Reagan in 1980, who said I'm more electable than Ronald Reagan is. John McCain and Bill Bradley in 2000, both of whom who were eminently more electable in November than were their opponents, Al Gore and George Bush.
The problem is, most primary voters, that's a two-step reason: "I'm going to vote for somebody because he can win in November." I think you have to define... I think Gephardt has the lead.
DAVID BROOKS: We should pay tribute to the idea that he comes out with a national health care plan, which you know we scan the heavens for signs of intelligent political life, and this is the first big thing coming out of the Democratic party since Bill Clinton left town. I'm not talking about the substance of it but it gets the Democrats out of the girdle they've closed themselves in since the Clinton health care plan failed, thinking small on health care, which is not what they should be doing.
And then it poses the debate of health care versus tax cuts. That's a good way to pose the debate if you are a Democrat. And it's a daring idea because it doesn't necessarily alienate the business community because it gives them large subsidies to provide people with health care. It's a big, bold idea. Substantively we'll debate it but politically, every other candidate should be kicking their staff up and down the stairs because they didn't think of it first.
MARK SHIELDS: I'd have to say this - two quick things: One, it comes from Gephardt. I mean, I agree - this is from Gephardt personally. It comes right out of him. He knows this stuff. The one thing, the feeling I had with him of the debate, and I did watch it, I confess, was that when John Edwards, seeing a threat to his own candidacy that Gephardt's idea represented, went after Gephardt's proposal and said this is a tax increase upon working people. Gephardt did not come back hard enough and strong enough against him. I think Bob Graham is on paper is a very very serious candidate. He has been governor of an important state, a successful governor.
In addition to that, he has a national security credential as chairman of the Senate Intelligence Committee that Democrats are searching for.
And finally in a strange way, what impressed me most about his announcement, Ray, were the ordinary people who were there. This is a guy who throughout his whole career has worked at jobs, whether it's bagging groceries or at a hospital as an orderly, as a schoolteacher and it comes across from people who talk to him and talk about him that this is someone who understands what they're going through and this, I think, could be the Achilles' Heel domestically of President Bush, in the sense that he doesn't understand the plight, the hopes, the dreams and the problems of ordinary people.
RAY SUAREZ: Well, at the same time the bush team was getting ready, Karl Rove was in New Hampshire.
DAVID BROOKS: The Republican race is going to be a doozy. The polls show that 97 percent of registered Republicans support President Bush. 1 percent oppose and two are undecided, so Rove will go up there and if they spend the amount of money they've raised, that will be $50 million a vote, I think.
RAY SUAREZ: Did he just have to fly the flag or did he have to talk more substantively?
DAVID BROOKS: Well, I think it's necessary for people to campaign and I think it is good to campaign. You get out there. You actually talk to people. Watching a campaign, even if you are president, people have to get into small groups, you never know what is going to happen.
Joe Lieberman this week, I read this in the New Republic, was in a Baptist Church. The choir leader was giving, doing a prayer and saying, who out there loves Jesus. The whole audience says yes, I love Jesus. "Senator Lieberman, do you love Jesus?" And you could see Senator Lieberman freezing. But that's what happens on the campaign trail. And the president should go through that just like everybody else.
MARK SHIELDS: I think Karl Rove is there for a good reason. And made a promise to go to Saint Anselm College and he honored the promise.
And the announcement of Dick Cheney, who had provided credentials to George W. Bush in 2000 on foreign policy and national defense, which the president now, by every poll does not need, is back because the president's very comfortable with him and he is going to be doing the political heavy lifting. He will be out in the open.
RAY SUAREZ: What's important about the Cheney nod this week, or it being made official?
DAVID BROOKS: He's healthy. He seems as healthy as he's been. He is someone who the president trusts. And the big story about George Bush is he's got all these big heavyweights underneath him. He seems to alternate between one and the other, who he trusts and who he gives a bonus to on any given day ... Powell, Rumsfeld, Cheney, other people--
RAY SUAREZ: Quick thoughts on Bill Bennett's problems this week.
DAVID BROOKS: Well, it's a failure of character. It's something that he is surrounded by, talk of virtue. He doesn't live up to it. He doesn't show self-discipline. You know, they say the Satan is a deceiver. I'm not quite sure he's hit bottom and faced up to the addiction and the problem that he has. But it is a sign of the real difficulty of vice and how it can creep up on everybody's life.
RAY SUAREZ: Something more, Mark, than just getting a kick out of somebody's troubles.
MARK SHIELDS: I think there is a lot of that in it. You have to know when to hold them, know when to fold them, as Kenny Rogers said. In Bill Bennett's case, he said I don't have a problem and I'll never do it again which is....
RAY SUAREZ: Which is gambling.
MARK SHIELDS: Which is gambling. The first time I ever went to Las Vegas, I was a very young man. I couldn't get over the fact that they gave you free cigarettes and free beer and pretty waitresses smiled at you. And a wiser, older friend of mine took me aside and said look, Mark, these hotels, the marquees, the shows, they weren't paid for by people breaking even and neither are the free limos or free suites or any of the free things they comp here.
So I think in that sense the irony this week is to watch liberals who had said personal behavior was off-bounds, politically jumping on Bill Bennett, while conservatives who had, you know, were ready to outlaw virtually anything between consenting individuals, were saying this is a libertarian issue. He didn't hurt anybody and so forth. I found the convoluted reasoning on both sides.
RAY SUAREZ: Good to see you both. Thanks.