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BRANCACCIO: Tonight on NOW...

Republicans pitch a big tent in New York.

HANNITY: The Republican Party is a far more diverse party today than the Democratic Party.

BRANCACCIO: But behind the scenes, there's a battle for the soul of Republican Party as the GOP's conservative base takes aim at moderates.

GREEN: Basically these guys are RINOs. They're Republicans In Name Only. They're Democrats in Republican clothing.

BRANCACCIO: And... George Bush makes the case for his record as a war time president.

GEORGE W. BUSH: If America shows uncertainty or weakness in this decade, the world will drift toward tragedy. This will not happen on my watch.

BRANCACCIO: Kathleen Hall Jamieson sets the president's words against his record.

And... defense contractors and lobbyists in New York — wining and dining top politicians — looking to grow the military budget even more.

HARTUNG: I think people don't realize how much it costs them in terms of distorting the budget, in terms of wasting tax money.

BRANCACCIO: And... amidst all the talk of war... What's happening on the ground in Iraq?

ANNOUNCER: From our studios in New York, Bill Moyers and David Brancaccio.

BILL MOYERS: Welcome to NOW. You might have noticed. The applause-meter shot through the roof of Madison Square Garden last night when President Bush reached out to his base on the religious right. Here's what he said:

PRESIDENT BUSH: Because religious charities provide a safety net of mercy and compassion, our government must never discriminate against them. (APPLAUSE)

Because the union of a man and woman deserves an honored place in our society, I support the protection of marriage against activist judges. (APPLAUSE)

And I will continue to appoint federal judges who know the difference between personal opinion and the strict interpretation of the law. (APPLAUSE)

We must make a place for the unborn child.

DAVID BRANCACCIO: That section of the speech was guaranteed to unleash fervent applause inside a convention where about a third of the delegates count themselves as evangelicals or born again -- core supporters of the president. This group was not as wild about other parts of the convention program which featured prime time speeches by some high profile pro-choice moderates.

But don't get the wrong idea. The Republican agenda is not being controlled by moderates, who have become something of an endangered species within the party. You might say the Christians overwhelm the lions in this particular arena.

I decided to go on safari to find out more about this hunt for moderates in that jungle that was Madison Square Garden this week. Our report was produced by William Brangham.

Experience the floor action during the Republican Convention this week and you could see it unfolding: a political metaphor called "The Big Tent". The GOP all-stars pitched in to put up a magnificent canopy of inclusiveness.

ARNOLD SCHWARZENEGGER: And maybe, just maybe, you don't agree with this party on every single issue. I say to you tonight that I believe that's not only okay, that's what's great about this country

DAVID BRANCACCIO: The tent — if it had a sign on it besides GOP - would read "moderation." Not hard right, but center right.

ARNOLD SCHWARZENEGGER: Here we can respectfully disagree and still be patriotic, still be American and still be good Republicans.

DAVID BRANCACCIO: But something else was going on in New York this week. Something that the convention planners would rather you not focus on.

William Greene came to town like thousands of others to protest the Republican Convention… not to denounce the president or his party, but to serve them with a reminder.

WILLIAM GREENE: Your base is conservatives. Don't forget your base because if you do, your base will forget you.

DAVID BRANCACCIO: Greene is the head of, a conservative umbrella group, and he's very unhappy indeed with that tent that his brothers in the Republican Party put forward all those moderates at the convention.

WILLIAM GREENE: Look at the main speakers. You've got Giuliani. You've got Pataki. You've got Schwarzenegger. I understand. These are the guys who are superstars in the eyes of the American public. And so you wanna present them you know to the world. "Hey this-- we're Republican, they're Republican. Vote Republican." I understand the politics of it.

But basically these guys are 'RINOs'-- they're "Republicans In Name Only." They're Democrats in Republican clothing.

DAVID BRANCACCIO: Greene wants to hunt those RINOs. He would very much like those moderates drummed out of the Republican Party. And his fight is part of a much larger struggle for the soul of the GOP.

It's a fight that matters to all Americans because of one simple reality: if the Grand Old Party continues to hold onto the White House and Congress, the victors in this internal party fight will help define the country for years to come.

To get a glimpse of the battle lines here just look at the Republican Party platform. For all the talk on TV this week about moderation on three especially hot button issues, the party's key document is blunt:

Regarding the nations' $450 billion dollar budget deficit, the platform says it's "unwelcome but manageable" and it argues that tax cuts need to be made permanent.

On abortion it says "the unborn child has a fundamental individual right to life which cannot be infringed."

And on gay rights — the platform supports the president's call for a constitutional ban on gay marriage.

PATRICK GUERRIERO: The President's campaign allowed the party platform to be hijacked by the radical right. At the same time it's putting-- inclusive prime time faces out in front of American people.

DAVID BRANCACCIO: Patrick Guerriero runs the Log Cabin Republicans, a group that supports the rights of gays and lesbians.

PATRICK GUERRIERO: We believe you can't have it both ways. And we think the party's on the verge of a culture war that will largely determine the future of this party and the future of its leadership.

DAVID BRANCACCIO: Guerriero and his group feel so betrayed by the party's direction that they ran ads on TV this week. Making their pitch for the moderate soul of the party.

LOG CABIN AD NARRATOR: History will record the Republican party's choice. Will we unite on then things that matter most, like winning the war against terror or will we turn to the party of divisiveness and intolerance which can only lead to hate.

PATRICK GUERRIERO: I'm worried that the Republican party that I care so much about is putting itself on the wrong side of history, the wrong side of the majority of Americans who support fairness and inclusion, and the wrong side of a younger generation that is tolerant and open minded about gay and lesbian families and issues like a woman's right to choose.

DAVID BRANCACCIO: Congressman Michael Castle of Delaware heads an outfit called The Republican Main Street Partnership - they're moderates who argue that catering too much to the right wing of the party ultimately weakens the Republicans.

REP MICHAEL CASTLE: If you look at any poll-- that's been taken nationally in this country in the last couple years and they ask about liberal, conservative, moderate -- moderate wins hands-down, every single time. And yet, both parties seem to think they need to be liberal or conservative.

DAVID BRANCACCIO: One of Castle's beefs with the party is big issue number 2.. Taxes.

MICHAEL CASTLE: We cannot continue to cut taxes at the rate we're cutting taxes. And I'd love to cut taxes as well. I did it - as Governor a few times. But, you simply cannot do it, when your revenues are not sufficient enough to accommodate your expenditures. And you continue to increase this deficit.

DAVID BRANCACCIO: And there are those watching this right this minute who are going, "Heretic! Heretic!"

MICHAEL CASTLE: Well, that-- I mean, that's too bad. It's-- it's-- true. There are those who say, cut taxes, period. And-- and everything else will take care of itself. I don't think that's the case.

STEPHEN MOORE: The only reason God put Republicans on this earth was to cut our taxes. If they're not gonna cut our taxes, then what good are the Republicans?

DAVID BRANCACCIO: Stephen Moore wants to purge the Republican Party. He's the president of a powerful conservative group called the Club for Growth.

Mr. Moore, what do you make of this term. I don't even know if you use it. RINO --Republican In Name Only.

STEPHEN MOORE: Well, sure. We invented the term. What we mean by that is that-- look, there are-- a lot of still policy disagreements within this party. There are still some Republicans who don't get what the party is about. Who want to vote against President Bush's tax cuts. Who want big government health care, and some of the issues that the Democrats believe in. And my opinion is if you believe in those kinds of issues, like-- higher taxes and-- and big government programs, then-- you know what? You probably belong in the Democratic Party. Cuz this party is about small government, and about cutting people's taxes.

DAVID BRANCACCIO: You going after those RINOs?

STEPHEN MOORE: We're trying to make some of those RINOs what we call an endangered species.

DAVID BRANCACCIO: They really feel hunted. They feel that they have targets on their backs--


DAVID BRANCACCIO: And that-- and you're-- that you're-- that you're stalking them. I mean, is that-- is that something that's productive for the conservative movement as a whole?

STEPHEN MOORE: It is. And here's the thing. And we are stalking the RINOs. Because we want them to either get with the program, or get outta the party, and go with the Democrats.

DAVID BRANCACCIO: Moore's Club for Growth has spent millions of dollars in Republican primaries supporting conservative candidates over moderates. They claim 17 out of 19 election victories in 2002. That's a lot of RINO-hide.

But the moderates weren't in total hiding this week. High above Manhattan there was an event packed with them. Their portraits lined the walls.. Not as trophies that were bagged, but figures to be celebrated.

The party was thrown by a group called the Republican Majority for Choice and the theme was that lightning rod of platform issues: abortion. But this pro-choice crowd is worried.

DAVID BRANCACCIO: What do you make of this phenomenon in which conservative Republican groups go after Republican moderates?

SENATOR LINCOLN CHAFEE: It just doesn't make sense. You're going to have the smaller party. It just numerically doesn't make sense.

DAVID BRANCACCIO: Pennsylvania Senator Arlen Specter was there too. Earlier this year, he was one of the top targets on the RINO-hit list

AD NARRATOR: What did Arlen Specter do after boosting your income gas and social security, property, and gas taxes? Road-trip!"

DAVID BRANCACCIO: Stephen Moore's Club for Growth ran a series of ads attacking him in the Republican primary. They spent $2 million dollars supporting his arch-conservative rival.

PATRICK TOOMEY (FROM DEBATE): I just represent the Republican wing of the Republican party.

DAVID BRANCACCIO: This was elephant against elephant… and it was ugly. The veteran four-term senator found himself in a struggle for his political life. It was close. In a squeaker, Specter won it.. By 2%.

DAVID BRANCACCIO: Do you feel that the moderates are under assault?

SENATOR ARLEN SPECTER: I feel that it is a battle that we're undertaking. I just finished a tough primary and put up a 'W' -- a win. Was a-- a tough fight. I think there are a lot of pro-choice Republicans. We may have a majority in the Republican party who are for choice in one form or another. And we have to assert ourselves.

JENNIFER STOCKMAN: If you could've heard the debate among the platform committee.

DAVID BRANCACCIO: Jennifer Stockman threw this party. She runs the Republican Majority for Choice. She's also a delegate at this week's convention.

JENNIFER STOCKMAN: Unfortunately, the crusade by the far right, has brought a lot of these social issues to the forefront. Which in my opinion is not helping the Republican Party, especially reach out to the moderate base.

DAVID BRANCACCIO: They have a calculation, the far right of the Republican Party, that they can do better this fall, with that strategy. What do you say to them? How does it help the Republican Party longer term, do you think, if it's more inclusive?

JENNIFER STOCKMAN: Moderates are the majority of our party. 80 percent of all Americans believe in a woman's right to choose. You know, we're not here to say that the base shouldn't be part of the Republican Party. But I think the party needs to adapt a base-plus strategy. The base, plus the rest of us.

DAVID BRANCACCIO: But Stephen Moore says the base is just fine all by its lonesome.

DAVID BRANCACCIO: You don't think you could capture a few more Republicans, if you were to be a little bit more welcoming--

STEPHEN MOORE: But for what?

DAVID BRANCACCIO: -- to these people with differing views?

STEPHEN MOORE: I mean, for what-- for what objective? it's like putting a bad apple in a cart of apples. What happens? It rots the whole barrel of apples.

DAVID BRANCACCIO: The term I hear a lot, especially from moderates, is-- "If we can have a bigger tent, that we really embrace. And-- in which you're not hunting some of these RINOs, for instance, then the Republican Party can become a real majority party, and therefore use that leverage to enact a revolution." They say majority party a lot.

STEPHEN MOORE: Well, look. There's only one Republican in the last 30 years who has won a majority of the vote in the Presidential election. And that President was Ronald Reagan. Why did Ronald Reagan win? Because-- oh my God, he's way too conservative. Americans won't embrace these ideas of strong defense, and lower taxes. And you know what? They embraced it big time. And he won 49 states running for re-election. So, I believe it's actually when Republicans stick to the principles, that really, the founding of the party-- that's when our party does best, in terms of growing the electorate.

DAVID BRANCACCIO: Back on the streets William Greene of rightmarch says even if it costs you some votes, there's value in sticking to your guns.

WILLIAM GREENE: You will win if you don't abandon your base.. If you don't win, at least you stayed true to principle. That's like-- it would be like the Republican party saying-- you know in the eight.. in the 1800's saying: "Well we could win the Presidency if we'd just abandon this slavery issue. You know-- we-- we don't wanna you know turn too many people off." Well that's ridiculous. If you lose as a result, then at least you lost speaking the truth and standing up for principles. As-- but in my honest assessment and opinion, I don't think you're gonna lose most of the time.

DAVID BRANCACCIO: Are moderates in the Republican Party an endangered species?

MICHAEL CASTLE: Well, I like to believe that moderates are not an endangered species. And I'd like to look to Arnold Schwarzenegger, and I'd like to look to Rudy Giuliani and George Pataki, and John McCain, who's sort of moderate conservative, but very independent. And believe that these are truly the leaders of the future. And hope the Republican Party sees that as well.

PATRICK GUERRIERO: I actually believe this fight is about more than one election or one party platform-- or even one president. This is really about the next decade of the Republican party-- where it will stand on issues of fairness and equality for all Americans.

DAVID BRANCACCIO: But the political war on moderate politicians — the RINO hunts — continue. Several Republicans are in the crosshairs this month, facing tough primary fights. Five other moderates in congress announced their retirement.

Stephen Moore says there's really only a handful left to knock off.

STEPHEN MOORE: I really think the party's 90% there already. There are a few Republicans in the elected office - Congress and the Senate and in state office who'll occasionally deviate from what the program is. And we would like to see them either get with the program or get out of the party.

BRANCACCIO: There's more to come on NOW

The Republican Party wraps itself in symbols of war.

SCHWARZENEGGER: That's why America is safer with George W. Bush as President.

BRANCACCIO: But can the war party chart a path to victory in Iraq?

BILL MOYERS: The president made it clear last night: He intends this election to be a referendum on his response to 9/11 and his invasion of Iraq. He was defiant.

GEORGE W. BUSH: Do I forget the lessons of September 11th and take the word of a madman, or do I take action to defend our country? Faced with that choice, I will defend America every time.

BILL MOYERS: And on his domestic agenda he offered a laundry list of aspirations. For a while you might have thought you were listening to…well, Lyndon Johnson.

GEORGE W. BUSH: Soon every senior will be able to get the prescription drug coverage and we will double the number of people in our job training program.

We will provide tax relief and other incentives to attract new business, we will offer a tax credit to encourage small businesses and their employees to set up health savings accounts.

Seven million more affordable homes in the next 10 years.

BILL MOYERS: Of course, the numbers don't add up. A war without end and a wish list a mile long with record deficits of more than 400 billion dollars. Who's going to pay for all of it?

It's time to bring in the author of one of my favorite books, EVERYTHING YOU THINK YOU KNOW ABOUT POLITICS… AND WHY YOU'RE WRONG. Kathleen Hall Jamieson is Director of the Annenberg Public Policy Center in Philadelphia. She's one of the country's leading analysts of politics and media, and a regular on NOW. Welcome back.

Did President Bush's speech last night succeed on his terms?

KATHLEEN HALL JAMIESON: Yes, the speech did three things that it needed to do. It recapped the promises kept, the tax cuts, the prescription drug benefit, No Child Left Behind. It extended from that vision into-- a second term. Expansion of No Child Left Behind. Changes in Social Security. The private investment account proposal.

It also build on health savings accounts. In other words, it charted where we're going in the next four years. And finally it said biographically here's what I want you to remember about me. And this was the message of the whole convention, I'm resolute in these times of terror and the strong implication is, "You can trust me." And then the self effacing moment that came toward the end of the speech, he acknowledges that-- you know-- presidents do make mistakes and everybody points them out.

In the process, he subtlety reminds people that this isn't the person who, in a press conference, a while ago in the spring, couldn't remember any mistakes.

BILL MOYERS: I heard some voters being interviewed on National Public Radio this morning and they- each one Democrats and Republicans said-- well-- he had made them think more sympathetically about the agony of decision in the White House. That was successful in that regard, right?

KATHLEEN HALL JAMIESON: It's very successful. And they-- it is a very difficult job. And one of the things that we should remember as we ask about that difficult job, what are the qualifications that we're asking about when we think about the person that's gonna sit in the office. Because one of the messages that's part of the Republican Convention was-- that Kerry isn't qualified to be Commander in Chief.

To the extent that we are now thinking about how you conduct a war in Iraq, how you conduct a war against terror, we are thinking about the criteria for the office differently than we ever have in the past.

BILL MOYERS: You-- saw the speech by the lieutenant governor of Maryland-- Michael Steele. And he said-- quote, "I don't want to use the words 'Commander in Chief' to describe John Kerry." What do you make of that? What was your reaction to that?

KATHLEEN HALL JAMIESON: My reaction was to say that we're running into very dangerous territory when we suggest that someone isn't qualified to perform that role. Particularly someone who has served his country by volunteering for service and somebody who has had a career in the US Senate.

There's an implication across many of the statements that are made-- in the more strident of the speeches at the republican convention. That Democrats don't really wanna protect the country. There's the statement in Zell Miller's speech, for example, that-says they don't believe of any real danger in the world except that which America brings upon itself through our clumsy and misguided foreign policy. That's not true.

It's not true that there's a Republican or a Democrat in this country who would not do everything possible to defend the country in foreign-- both foreign and domestic.

BILL MOYERS: You're not going to agree with me or respond to this, I don't think. But when I saw Zell Miller I was reminded that every generation produces a southern demagogue. George Wallace, etcetera. And it seems to me that the south has produced a new demagogue in Zell Miller. Because three years ago he was calling John Kerry a hero.

How do explain on the same platform a John McCain asking for civility in the political campaigns, going for the high road. And a Zell Miller who goes for the gutter?

KATHLEEN HALL JAMIESON: one of the things that one has to ask about the political process is where the boundaries on an appropriate political speech. And what the certain types of speech do to our capacity to hold an election that's thoughtful and directed toward the future. When you discredit the other candidate and that candidate is elected president, and this is true on either side, half the country that has voted for that person now brings a different sense to governance than it really ought to bring.

I like the notion that candidates on both sides are qualified and one shouldn't impugn their integrity or their patriotism or their interest in defending the country. John McCain was making that point in his speech by saying the enemy is over there. The enemy isn't here. And when he was asked about-- at a number of occasions whether Kerry is qualified to be President, he said yes. Qualified to be commander in chief. He said yes.

And then he said, but I believe George Bush is more qualified and then he makes that case.

We have the same kind of exchange, interestingly, a couple of weeks ago. Now Tommy Franks who led the Iraq troops, has endorsed George Bush, and gave a speech last night--


KATHLEEN HALL JAMIESON: On his behalf. But when Tommy Franks was asked whether Kerry was qualified to be Commander in Chief, Tommy Franks said absolutely.

And so one of the problems that we're having in the discourse right now is a selective use of statements on each side. And one of the things that good news organizations-- are doing increasingly is checking that and putting back in context.

BILL MOYERS: And the-- WASHINGTON POST this morning had a front page story, "GOP prism distorts some Kerry votes." Obviously-- this is a good thing to do-- whomever the candidate is. But it takes a long time for a story like this to catch up with the millions of people who see what they see on television.

KATHLEEN HALL JAMIESON: One of the things that is incredibly important in a visual age is not simply that the print process do this. But that television take its visual capacity and show us what the actual context was.

Last night, both ABC and CBS ran fact checks on the Zell Miller, Dick Cheney speeches from the previous night. And what's powerful about that is through the quote from the speech and then for example, in the challenge to the weapons system. Where the argument is that Kerry opposed every weapons system that's being used to win the war on terror.

Seeing Cheney in his younger incarnation saying we need a 30 percent cut in defense is more effective than anything a print journalists will ever be able to do in situating the context around the claim. And here's the irony, some of the weapons systems that Zell Miller accuses John Kerry of opposing, Dick Cheney opposed as well.

BILL MOYERS: Did the president last night effectively unite and link 9/11 and Iraq?

KATHLEEN HALL JAMIESON: I don't think the President effectively linked them, and I don't think that was his job. I think McCain did.

But what I think the President did accomplish in-- the convention as a whole, was to remind people-- of-- what it was like to experience September 11th. And-- to remember Democrat or Republican, how reassuring it was in that moment in which he stood up for the country with the firemen at his side.

If you're watching the convention closely, you heard it so often that at a certain point that almost narcotized your sensibilities and you could no longer respond to it. But there were other moments i in that early week in which-- Democrats and Republicans rallied around the President, the speech at National Cathedral is among the better speeches in the modern history of the presidency.

And that was a speech the country desperately needed. It's too long to have the sound bite of standing with the fire fighter. It doesn't have the evocative rubble beneath you and the fire fighters surrounding. But it nonetheless is a moment in which George Bush was the President of everyone in the country.

It's legitimate for him to remind us both that that's the context of his presidency and it's the context in which we are making a choice. The challenge for John Kerry is that he didn't have a chance to lead in that moment. The President did. And as a result, how does he establish that he's on comparable footing.

BILL MOYERS: Last night the President said John Kerry is "running on a platform of increasing taxes." True or false?

KATHLEEN HALL JAMIESON: John Kerry would increase taxes for those making over $200,000. He would cut them further for those who are in the middle class. So is he - running on a platform that would increase taxes for all? No, actually he would decrease the taxes for some.

What Kerry would like to do with that money is increase access to health insurance coverage. And essentially the question for the nation ought to be, then, is that a trade off it wants to take? Are those upper income earners ultimately advantaged because the country is better off if more people have health care coverage. There was a study a couple of weeks ago that said that one of the things that's depressing job growth is rising health insurance costs.

We know that the number of people without insurance has risen in past years. We know that health savings accounts, group buying for small business which is a Bush proposal, and what Bush sees as tort reform, are his options to the Kerry plan. What we should be asking is: In a world in which there are two competing proposals, which better serve the country in the long term in a world in which there are other trade-offs. If you spend the money for health insurance coverage, you're not spending it for something else.

BILL MOYERS: How is, the president, if he's reelected, going to pay for all these programs that, like Lyndon Johnson, he was pressing with vigor. This is a man who-- spent the surplus. How's he gonna do it?

KATHLEEN HALL JAMIESON: Well, first the Republicans raise the question about Kerry. Does he have enough money to pay for his programs as well? There's a charge in the Bush speech that Kerry's got two trillion dollars in promises. But Kerry's figures differ from that. Republicans exaggerate the Democratic costs, Democrats exaggerate the Republican costs.

But there's a question on both sides about how you pay for it. Kerry, however, has said something that President Bush hasn't said. He said that if there isn't sufficient money, he will cut back on implementing his other priorities. So he's made a statement about what the trade off is. But President Bush has-in last night's speech that is the deficit time bomb.

It's the proposal to permit private investment accounts for Social Security. Now, the Democrats call that privatization versus private investment accounts. You're gonna hear a war of words. But if he is standing behind the proposal of 2000.

BILL MOYERS: To privatize it. To-- make it--

KATHLEEN HALL JAMIESON: Permit private investment accounts. The large question is how do you pay for the transition costs.

BILL MOYERS: Two trillion dollars, some estimate it would take to go from the present system to a system of private retirement right?

KATHLEEN HALL JAMIESON: Right, but the more usual estimate is a trillion or a little bit over.

Now, if you had to find a trillion dollars in 2000, if you still thought they were-- big protected surpluses, and it turned out for circumstances that there weren't, you had a way to do it. You could say well, okay, they can take it out of the surplus. We don't have that anymore.

Now we're running a very high deficit. And so the question for President Bush is-- how do you pay the transition cost? The question for John Kerry is-- do you really believe that growth in the economy is going to be sufficient to preserve Social Security? And there's another lurking question that neither is addressing. The bigger problem is actually with Medicare, not with Social Security.

And we've just added a large entitlement. Prescription drug benefits. When Alan Greenspan gave a speech at the end of August, he was worrying about some of these things.

BILL MOYERS: The Chairman of the Fed, right?

KATHLEEN HALL JAMIESON: And when Alan Greenspan is worried about some of these things, I worry about some of these things. And then, once a year, I get a document, this is my document which tells me my qualifications for Social Security, and people don't ordinarily read all this print. But-- let me read--

BILL MOYERS: We all get this, right?

KATHLEEN HALL JAMIESON: We all get this. "Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change. Because by 2042 the payroll taxes collected will be enough to pay only about 73 percent of scheduled benefits." I find that chilling.


KATHLEEN HALL JAMIESON: Because-- we have two candidates who aren't talking about the fiscal realities underlying Social Security and Medicare. And we're not having the discussion about how we're going to pay to honor a guarantee that many who have paid into Social Security consider ironclad. And by contrast, my children don't believe there will ever be Social Security there for them. But that's a different matter.

BILL MOYERS: Well, what you're saying is what we all know that our political system no longer serves to deal with the issues that we really wrestle with every day.

KATHLEEN HALL JAMIESON: And it also says that politicians are afraid that if they told the public the truth about costs and trade offs that they couldn't be elected. We need to find a way in the political process to stop penalizing the truth tellers. And to start putting forward the statements that are basically the agreed upon fact.

Here's what we know about Medicare and it's long term solvency. Here's what we know about Social Security's long term solvency. Here's what it would take to get us where we need to go.

When George Bush says he wants to move to private investment accounts he's making an argument that there would be a better yield for Social Security that way.

That raises another question. What if the market doesn't do well over time. What if historical averages don't hold for people. What if they make a strategic mistake. But nonetheless, it's a worthy contribution to the debate. We need to have the debate however, in an environment in which we're talking about some of these other things.

But imagine saying to the public, well, yes, I think we should raise the age of entitlement to Social Security. Or-- maybe-- those of you who are wealthy shouldn't get as many benefits. In fact-- maybe you shouldn't get any benefits at all. And by the way, maybe we'll scale back everybody's benefits. That person could probably be immediately be dumped into the electoral trash heap of history.

BILL MOYERS: You would like to see a campaign on the high road. A campaign that addresses these issues. We have eight weeks to go. We're in the home stretch. What do you think this campaign is gonna be like?

KATHLEEN HALL JAMIESON: There's a hurricane approaching the Florida coast and some people are saying it's going to be worst than Andrew. The morning news this morning-- turned on the television set at seven o'clock, is talking about the hurricane approaching. That's how I feel about this election. This is a consequential election in which the issues are incredibly important.

And-- regardless of who is elected, someone is going to have to lead on those issues. We're- in a moment in which this hurricane of distraction is coming down on the electorate. We've got charges that should not be levied. And there are some on both sides. And at a moment in which what the electorate desperately needs is a way to keep that hurricane at bay so we can get down to the business at hand, I'm afraid it's approaching the coast.

I saw that as one of those you know- the Shakespearian metaphors in which the weather is always portending something.

BILL MOYERS: Kathleen Hall Jamieson will be here at the eye of the hurricane-- over those next eight weeks and I look forward to talking to you more. Thank you for joining us on NOW.


BRANCACCIO: Next week on NOW…

Three years after the attacks on 9/11, Americans are still asking - why were the warning signs ignored?

FORMER DIRECTOR, BIN LADEN UNIT, CIA: They humiliated the greatest power on Earth and the greatest power on Earth couldn't find a way to respond in any way at all.

BRANCACCIO: Unanswered questions of 9/11-next week on NOW.

BRANCACCIO: We're back following the money. Last week we showed you how Democrats in Boston were wined and dined by big special interests. Tonight, we focus on the Republicans... And the buying and selling of war.

War is big business. By 2009the Pentagon expects to need a budget 23-percent higher than thoe massive budgets of the Cold War years. With billions at stake, it was party time this week for defense contractors.

Correspondent Michele Mitchell prepared our report with producers Brenda Breslauer and Steve McCarthy.

MICHELE MITCHELL: The USS Intrepid survived seven bomb attacks, five kamikaze strikes and one torpedo hit in the Pacific during World War II. And this week the ship, now a museum, withstood a new round of assaults, Republicans on the party circuit.

An opening day tribute to America's veterans set the scene for the week's patriotic imagery. The reception was sponsored by a who's who of military contractors, among others.

PRESIDENT GEORGE H.W. BUSH: …for all the veterans in the past, present and future.

MITCHELL: Cookies and lemonade were served to the veterans. But there was another party going on below deck. Behind a velvet rope, with an open bar and air conditioning.

OFF-CAMERA PRODUCER: What's going on here?

GUARD: This is a VIP reception.

MITCHELL: But the vets with the cookies couldn't get in.

JACK KRUMME: I didn't know anything about it frankly. That's alright. Hey you know if you're gonna play you got to pay.

MITCHELL: And those who were willing to pay definitely got to play at the more than 200 private events around town. From the Cartier Mansion to Bergdorf Goodman to the Chrysler Building, many of New York's most glamorous venues were snapped up months ago by lobbyists and corporations.

Frank Fahrenkopf is a Former Chairman of the Republican National Committee and now a lobbyist.

FAHRENKOPF: I mean, let's face it, you support people who support you. That's been politics for a long, long time.

MITCHELL: We decided to take a look at the defense industry which has billions of dollars in government contracts at stake. Throwing parties for politicians is one of the few legal ways defense contractors can buy face time with the lawmakers who oversee those lucrative deals paid for with taxpayers' money.

WILLIAM HARTUNG: The military budget's gone from 300 billion to 450 billion in a few short years and that doesn't even count what's been spent on Afghanistan and Iraq - another $180 billion or so.

MITCHELL: Bill Hartung is a senior research fellow at the World Policy Institute, an expert on the arms trade and military spending. He says currying favor with lawmakers keeps defense programs alive like Boeing's Osprey or Lockheed Martin's F-22 fighter, the most expensive fighter plane ever built.

And at this week's convention, the defense industry walked a fine line between lavishing attention on lawmakers and avoiding the label of war profiteers.

HARTUNG: I think given the President's tone he wants to set here and the backdrop of wars in Afghanistan and Iraq it would be unseemly if the arms industry was in too in your face. They don't want to be seen as profiteering from these wars.

MITCHELL: That may be one reason why we couldn't get in to many of the parties.

The legendary Rainbow Room was the venue for a reception for Congressman Hal Rogers of Kentucky.

We ended up outside on the sidewalk - but we did manage to stop his colleague Congressman John Duncan of Tennessee on his way out. And we asked him why Lockheed-Martin and Nextel would foot the bill for such an elaborate event.

REP. JOHN DUNCAN, JR. (R-TN): Well, Congressman Rogers is one of the more powerful members of Congress; he's a senior member of the Appropriations committee and a possible future chairman of the Appropriations committee, so he's a very important man in the Congress and a very good friend of mine.

MITCHELL: And Rogers is also important to the growing business of homeland security where he oversees congressional funding and where Lockheed wants to be a big player.

HARTUNG: And so they have an exclusive event like that with the chairman of the committee is a way for them to really get in tight with him so that in the future, when things come up where perhaps it's between them and another company, they'll have that little edge.

MITCHELL: Another guest, lobbyist Gary Hopper says all kinds of firms are chasing those new homeland security dollars.

GARY HOPPER: Every company, it seems whether you do audio tapes or whatever your business is, cameras, you want to be involved in the homeland security defense business. Now that's how it's changed. There's more dollars available, there's more emphasis on it. But there's a lot more competition out there, too.

MITCHELL: More than half a dozen companies including defense contractor Northrop Grumman took over the ESPN zone in Times Square to throw a party for Congressman Roy Blunt and others. Blunt is the third most powerful Republican in the House. We managed to get pictures of the corporate schmoozefest before we were escorted out.

But we were allowed into this swank soiree in the landmark Chrysler Building put on by well-connected law and lobbying firm Blank Rome. While you may not have heard of Blank Rome, it represents major military contractors like Boeing and Raytheon. David Norcross is a partner.

DAVID NORCROSS: A convention is the only time we have every four years that we get the faithful together in one place. And, there might be a party or two but there's good communication and people from all parts of the country get to interact and talk to each other. You know, like Shriners get together every year we get together every four.

MITCHELL: Shriners, the international fraternity known for spending its money on children's hospitals, probably wouldn't serve the lobster cocktail, jumbo shrimp and $60 bottles of champagne that Blank Rome provided. But then again, Shriners aren't after the multi-million dollar government contracts Blank Rome helped secure for its clients.

And it may be just a coincidence but for the past year David Norcross has been a key convention organizer at the same time his firm has been lobbying the Bush administration.

HARTUNG: To have the person who's organizing your convention simultaneously lobbying for Raytheon, one of the top ten weapons contractors, normally would sort of set off a feeling, well, there's an appearance of a conflict here.

MITCHELL: And that potential conflict of interest was picked up on by THE NEW YORK TIMES.

MITCHELL: The article that came out in THE NEW YORK TIMES that said look - here's a guy - he's a chairman - he's organizing the convention and he's a lobbyist for companies like Raytheon - it's not illegal but…..

NORCROSS: He's so busy organizing the convention that he hasn't done much of anything else in the last year. Very little.

MITCHELL: So when people say ...Well, there's some question whether it's ethical or not -

NORCROSS: Well, I think they're dead wrong. I mean, we, actually the firms ethical, uh people looked at it and they're pretty difficult in my firm and the RNC too we looked at it and I for instance gave a client list over to the RNC before I even started.

MITCHELL: But since Norcross took the convention job, his firm has been hard at work lobbying. Norcross is registered with Congress as one of three lobbyists working on the Raytheon account this year.

HARTUNG: I think this administration - this Republican party sort of feels like, you know, We've got God on our side. We're doing the right thing. We don't need to worry about these sort of connections. You should just sort of trust us here.

MITCHELL: Well, come on, I mean, don't the Democrats also do the same thing? I mean, you've had instances of them blurring the lines as well.

HARTUNG: I think there's no question that both parties have ties to the defense industry. Both parties lobby. But I think there's-- a little sort of going over the line here, sort of a sense of, "We don't care how it looks--" just kind of almost sort of like lobbying on steroids.

MITCHELL: The public will never know what goes on in these exclusive get togethers. And it's not just defense firms hosting these parties. In New York this week, every industry where government makes policy. From energy to telecom to healthcare went all out to court GOP officials.

Back on the Intrepid late last night, more than a dozen military contractors were among the hosts of "Operation Victory" honoring Congressmen Jerry Lewis and Duncan Hunter. Together in the house the two oversee the nearly half trillion dollar Pentagon budget.

This time we didn't see any salute to veterans, just the Pointer Sisters and some of the same insiders we'd been running into all week.

PRODUCER OFF-CAMERA: Congressman…how are you? CONGRESSMAN: Yes.

PRODUCER: Another party, huh?

CONGRESSMAN: (laughter)

BILL MOYERS: We've now been through the two political conventions. What's remarkable to me is that they both focused on war: the Democrats obsessed with a war that ended 30 years ago in Vietnam, the Republicans with a war happening now. In Boston, you'll remember, Democrats sold their man as a warrior, surrounded by his old swift boat buddies, and reinforced by a phalanx of former generals and admirals.

Here in New York this week, Republicans not only sold George W. Bush as their Commander in Chief, they declared themselves the party of war ...

RET. GEN. TOMMY FRANKS: We are going to fight the terrorists. The question is do we fight them over there or do we fight them here? I choose to fight them over there.

BILL MOYERS: The leadoff speakers on opening night sounded the trumpet at least 36 times …


BILL MOYERS: So many times that when the evening ended, conservative columnist David Brooks summed it up as "A Call to War."

BILL MOYERS: There were moments when the convention seemed a recruitment drive …

And there were moments when it seemed a religious Epiphany

And there were also moments when the enemy was identified not as Al Qaeda, but the opposition here at home ... As if this election were an un-American activity.

ZELL MILLER: Today at the same time young Americans are dying in the sands of Iraq and the mountains of Afghanistan, our nation is being torn apart and made weaker because of the Democrat's manic obsession to bring down our Commander-in-Chief.

BILL MOYERS: These Republicans seem to have decided war is the health of the party …


BILL MOYERS: But as delegates inside convention hall were celebrating the sinews of war, elsewhere in New York there were reminders of the bleeding, suffering and dying that war is all about…

They're reading the names of the dead ... Iraqis and Americans ... a requiem at an old churchyard downtown, where the bones of Revolutionary War dead are buried.

At nearby Washington Square, hundreds of combat boots ...a pair for each American soldier killed... some tagged with their names... standing row to row.

And for the Iraqi people who have died in this war — a thousand pairs of everyday shoes — workboots, womens' heels, children's sneakers — empty, solemn reminders that the innocent die, too.

The toll keeps rising — almost a thousand American soldiers — and almost sixteen thousand Iraqis.

In the two months since America handed sovereignty back to Iraq, more than 120 U.S. troops have been killed. The LOS ANGELES TIMES reports that Americans are being attacked 60 times a day on average.

Much of the country remains hostile territory … parts of the Sunni Triangle to the west and north of Baghdad 'a no-go' zone for U.S. troops, a sanctuary for insurgents.

Videos like this — showing the beheading of people suspected of collaborating with the Americans — are selling in the marketplace for 50 cents, according to the NEW YORK TIMES — a gruesome reminder of reality in Iraq.

BILL MOYERS: We turn now to someone who is right there in the reality of Iraq. He's the freelance journalist Phillip Robertson, who was himself held hostage by Iraqi insurgents for one day this past May. For five months now he's been an eyewitness to what's happening there, reporting for and TIME Online which last month carried his hair-raising first person account of the battle for Najaf.

Phillip Robertson joins us now via satellite from Baghdad. Welcome to NOW.

PHILLIP ROBERTSON: Thank you very much.

BILL MOYERS: You know, the President last night in his acceptance speech said, quote, "Despite ongoing acts of violence, Iraq now has a strong prime minister, a national council and national elections are scheduled for January." That's an accurate statement is it not?

PHILLIP ROBERTSON: Well, that is an accurate statement up to a point. The question is what do those things mean. The problem with Iraq is that there is no legitimate political structure that people can participate in.

Imagine a country where all the interest groups have weapons. They don't sit down and discuss their problems. If we take a step back from the conflict, what we see is people shooting at each other more or less constantly.

They-- political problems are resolved through violence. Because the country is saturated with weapons. And ordinary people have weapons just to defend their house. It's very easy to form militias in this country. And many people have done so.

Most recently, I've witnessed the siege of Najaf. I spent three days in the shrine with an amazing photojournalist named Thorne Anderson. And in these three days I witnessed-- I witnessed the destruction of a city. And it was heartbreaking. And there's really-- it's very difficult to describe in words.

BILL MOYERS: Exactly what is the United States up against there militarily?

PHILLIP ROBERTSON: The United States is up against, in the case of the Shia insurgency, a very disciplined guerilla army. And they've often been portrayed in the press as a rag tag militia.

The militia is formed of Iraqi locals. But it's-- they actually have a great degree of organization. But they don't-- what they don't have is the sophisticated weapons that the Americans do. They're tremendously motivated. And they are not afraid of getting killed in battle. And I saw a great deal of that happening in Najaf and also Sadr City.

BILL MOYERS: This is guerilla warfare in an urban, almost block to block kind of situation?

PHILLIP ROBERTSON: They have in the past fought block to block. Many of these guys I spoke to said they were defending their houses and that they were fighting for Islam. These are very, very deep emotional connections for the resistance.

BILL MOYERS: Give me your personal impressions, Phillip, of what attitudes toward Americans are there.

PHILLIP ROBERTSON: Many American reporters that I know cannot admit their nationality. Most people usually say that they are from a neighboring country like Canada, possibly even Ireland. To admit American nationality is to essentially rule out any possibility of trust.

Most reporters now, if they hold U.S. citizenship don't carry their passports with them. To carry evidence of U.S. nationality is a possible death sentence. And I say that without exaggeration.

I'm not carrying my passport with me now. My press ID comes from Britain.

I think we're all very unsettled and nervous about it. And we also have to balance that with the desire to go out and continue working and talking to people. Because if we're not talking to Iraqi people, we're not really doing our jobs.

BILL MOYERS: President Bush says that the fighting in Iraq is helping to reduce terrorism in the world. How do you see it?

PHILLIP ROBERTSON: The war in Iraq is training people to fight. Men, young men, are learning to use Kalashnikovs, and RPGs against American forces.

They will continue to do that. They're not getting worse at it. They're getting better at it. They're causing a great deal of destruction.

People are coming across the borders. There are foreign fighters here. Not a tremendous amount. But there are people being trained in this war.

BILL MOYERS: The last time you talked to any insurgents, what do they tell you?

PHILLIP ROBERTSON: The insurgents say different things. There's a range of people that are participating in the resistance movement. I found that fascinating. The cell leaders, at least in the case of the Mahdi Army, the supporters of Muqtada al-Sadr, those guys were college educated. They'd all been to university. I was surprised.

I'd read news reports that said that they were just poor people. They were bandits. Many of them were drug addicts. It's not the case. The cell leaders have college educations. And they have that in common with their US their US enemies.

But many of the guys spoke very personally about the need to defend their country, and their houses. There were things that we could understand if we-- we'd been invaded.

I don't support everything that they do. But I could certainly understand what they meant when they said they had to defend their houses, block by block.

BILL MOYERS: When you talk to the people caught in the middle, the innocents in this war, the women, the old men, whom do they blame for their travail?

PHILLIP ROBERTSON: It's such a fractured polity. It depends on who you ask. Many people in Najaf blamed the Mahdi Army. They did not have a great deal of support. And the fact that they chose that city to fight in reduced it to rubble.

So, they did not-- there were many angry civilians in Najaf who just felt that they'd lost their city. And their city had been martyred and held hostage by the insurgents. Not everybody feels that way, though. Some people blame the Americans.

The Americans do not have a great deal of political support, especially after Abu-Ghraib. That was a watershed moment. Those photographs can never be undone.

BILL MOYERS: How long do you plan to stay there?

PHILLIP ROBERTSON: Well, I think I may take a break for a little while. But I'll come back. I'll come back probably in a few weeks.


PHILLIP ROBERTSON: I think it's important. I think this is such an important story, especially now with tremendous political pressure on the administration to resolve insurgencies in Iraq. That's, I think responsible for a great deal of the fighting.

There's political pressure on both sides to continue the war. And I think it's necessary for journalists, independent journalists to cover this as best they can. And I would like to stay, and be a witness.

BILL MOYERS: We thank you very much, Phillip Robertson, for joining us on, NOW. And take care yourself.

PHILLIP ROBERTSON: Thank you. It was a real pleasure.

DAVID BRANCACCIO: That is it for NOW. I'm David Brancaccio.

BILL MOYERS: And I'm Bill Moyers. Join me next week for a special edition of NOW: "9/11: For The Record" - what we know and don't know about the events leading up to the attacks that day.

Thanks for joining us. Good night.

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