August 13, 2004

Announcer: From our nation's capital, this is "Washington Week." Substituting for Gwen Ifill, here's moderator Alan Murray.

Alan Murray, guest moderator: Tonight, the politics of war, the economy, and terror, three topics that define the election of 2004.

Alan Murray: The president went on the offensive this week, mocking John Kerry for continuing to waffle on the war with Iraq.

President Bush (on tape): Almost 220 days after switching positions to declare himself the anti-war candidate, my opponent has found a new nuance.

Senator John Kerry (on tape): Yes, I would have voted for the authority, but I would have used that authority, as I have said throughout this campaign, effectively. I would have done this very differently from the way president Bush has.

Alan Murray, guest moderator: Will Bush's new tactic help win over undecided voters?

The economy stalls and the president tries out a new economic agenda, including tax reform and an "era of ownership" that could mean big changes for Social Security and health care. And a new top spy for the nation. Is this the man who can fix the "failure of imagination" that missed the clues before 9/11?

Also tonight, a bombshell from New Jersey. The governor who came out of the closet and walked out the door.

Gov. Jim McGreevey (on tape): I have decided the right course of action is to resign.

Alan Murray, guest moderator: Joining us this week, David Sanger of The New York Times, Jackie Calmes of The Wall Street Journal, and Michael Duffy of TIME magazine.

Alan Murray, guest moderator: Good evening. While fighting heated up in the Iraq city of Najaf this week, a new war of words was being waged on the campaign trail here at home. President Bush and Vice President Cheney were taking challenger John Kerry to task over his position on the Iraq war and his call for a more sensitive war against terror.

David Sanger has been chronicling the point-counterpoint between the candidates. David, why is John Kerry having a hard time answering such a simple question?

David Sanger, The New York Times: He doesn't have a bumper sticker position. And a year into the Iraq war, maybe that's a good thing. There are a lot of people who think it was simple solutions and simple slogans that made for a rough time in Iraq. But what happened here, Alan, was interesting. The president set something of a trap last Friday when he said he wanted a yes or no answer. If John Kerry knew what we know now about weapons of mass destruction would he have gone in anyway? After thinking about it over the weekend, Mr. Kerry decided to step into the track and said "Yes, I would have." He goes on with an explanation, you heard a little of it there, about how after he voted for the authorization to go to war, he would have done things differently. Put allies together, get ready for reconstruction. But the fact of the matter is that the president had enough to turn around and then say, see, his position's the same as mine. Which is not exactly what their positions are.

Michael Duffy, TIME Magazine: his goal I presume, the president's goal is he's running a few points behind Senator Kerry is to chip away at the lead with this and remind voters what about Senator Kerry?

David Sanger, The New York Times: You heard that phrase, a new nuance from Mr. Kerry, that is the code word in Bush speak for a new waffle. You heard from Mr. Kerry, I would do it differently. That is a code word for, you wouldn't have seen the mistakes, you wouldn't have seen the intelligence failures.

Alan Murray, guest moderator: Speaking of code words, the other code word that came out this week was "sensitive". That was the big debate on the campaign trail, believe it or not. John Kerry talking about waging a sensitive war on terror. Here's what he said and here's what Vice President Dick Cheney said in response.

Senator John Kerry (on tape): I believe I can fight a more effective, more thoughtful, more strategic, more proactive, more sensitive war on terror that reaches out to other nations and brings them to our side and lives up to American values and history.

Vice President Dick Cheney (on tape): Senator Kerry has also said if he were in charge he would fight a more sensitive war on terror. America has been in too many wars for any of our wishes, but not a one of them was won by being sensitive. A sensitive war will not destroy the evil men who killed 3,000 Americans and who seek the chemical, nuclear, and biological weapons to kill hundreds of thousands more. As our opponents see it, the problem isn't the thugs and murderers that we face, but our attitude. Well, the American people know better.

Alan Murray, guest moderator: You're a sensitive guy, David, what do you make of this?

David Sanger, The New York Times: What I make of this is the 1990's are over.

Alan Murray, guest moderator: No Alan Alda for president.

David Sanger, The New York Times: Back then people were thinking about a sensitive man for president. This is an example of where one word taken in two different contexts can mean different things. You heard the vice president say that Mr. Kerry wanted to fight a sensitive war. Mr. Kerry I think would argue, no, the fighting part he didn't plan to be sensitive, but the reconstruction, the bring our allies part together he feels should be done more sensitively. In fact when you listen to President Bush, he makes the same argument without using that word. He says he's going to bring in allies and with Iran and North Korea he certainly has proceeded in a much more sensitive way.

Jackie Calmes, The Wall Street Journal: I think the context of what Senator Kerry said makes complete sense and it's what he's been saying all along, but I completely applaud the Bush-Cheney people for being able to get that out there. Because it played -- the word "sensitive" played right to their image of John Kerry.

Alan Murray, guest moderator: It's another form of waffle, it's another form of nuance.

David Sanger, The New York Times: it's another form of too weak to be commander in chief.

Michael Duffy, TIME Magazine: Is it my imagination or Bush feels, looks like, he's turned a little bit of a corner in the last week or two? He looks different. He's taken his tie off. He's much more energetic out there. Republican I talked to today said, they look to me like they are back on the offensive in the way they haven't been for six months.

David Sanger, The New York Times: The polls are beginning to show a little bit of that. You see little movements. It's hard to tell whether -- it will be weeks before we know this was a turn. He looked more relaxed in a long television interview he did the other day. More relaxed than the campaign trail.

Jackie Calmes, The Wall Street Journal: I'm not so sure I totally agree. I think they did feel better this week because last Friday the job numbers that showed such an anemic gain in new jobs was -- really hit them for a loop. They weren't expecting the news to be that bad. We saw them grasping for the household survey that shows more jobs created. Knowing the economists and the business leaders were focusing on the worst number. This week when the fed raised interest rates but gave an endorsement to future growth in the economy, that buoyed them and that's probably why you think you saw him in a better frame of mind or acting more confident this week.

Michael Duffy, TIME Magazine: There's also something else I saw him do that I thought was interesting. He said at one point he was talking about Kerry in a different context. He said -- I guess it was about this war, where he stood on the war. He said -- repeated Kerry's statement, he said it sounds like, if he'll change on the once, he'll change again. Bush said I think what you need is someone who won't change. Someone who will do what he says. So over and over he's coming back to this notion of, if it's a choice between conviction and something else, he's betting that some percentage will choose conviction.

Alan Murray, guest moderator: Which the White House thought was his strongest point.

David Sanger, The New York Times: Especially some Kerry people believe, whether they believe I don't know, they say, that any day they can get the president talking about Iraq is probably sooner or later a good day for Kerry because certainly we have seen continued troubles and continued casualties. So the president certainly would like to turn this to a question of style.

Alan Murray, guest moderator: OK. While the war in Iraq has taken a prominent position in this campaign, the economy has also moved front and center as Jackie was saying. Oil prices hit record highs this week. The stock market has plummeted. And job growth has stalled. In the midst of this, president Bush has begun to unveil an economic agenda for a second term.

From campaign ad: Own their own home. Own their own business. Own their own health care plan. Own a piece of their retirement.

Alan Murray, guest moderator: Jackie, give us a peek what will be in this.

Jackie Calmes, The Wall Street Journal: The bottom line is you are not going to see a lot new. I'll say that right now. I'll just bet. He's going to talk about this ownership society theme as a way of bringing together his ideas for tax incentives that will help people own a home, save for their retirement, save for health care costs, and this is a theme they think resonates with middle america. A lot of what -- it's interesting, this close to the convention and this close to the election, they really still are putting a second term agenda together. For all that it's going to look a lot like his existing agenda. He said a lot of this in his state of the union speech in January, what we forget is there's been a lot of violence in Iraq in the meantime in March, April, and he's been off message as far as the economy is concerned.

Michael Duffy, TIME Magazine: Why won't he try something bigger and newer? What are the obstacles?

Jackie Calmes, The Wall Street Journal: There's still a debate about whether -- there's people in the administration, mainly the economic advisors, who think they have a good record and should run on it. There are others who think they need one big idea to sort of galvanize support. I think that includes the treasury secretary and Karl Rove. The big idea probably will be the last old idea that wasn't completed from the 2000 agenda, Social Security reform.

Alan Murray, guest moderator: They have a bit of an opportunity here because John Kerry ran his convention in Boston as largely one big biography. It wasn't focused on ideas. They now have the opportunity to focus on ideas in New York. Is that where you think they are headed?

Jackie Calmes, The Wall Street Journal: I do. I think they'll talk about tax reform in the most general way. One of the advisors told me that everybody's made themselves well aware of Ronald Reagan's history in 1984 when as he was going to run for re-election he talked in very general terms about reforming the tax code. And then once he was in a second term he did it. But it's hard to see the same -- they don't even know how it will play out. That's what they have been trying to study the old history to make new.

David Sanger, The New York Times: Jackie, some of us who followed President Clinton around eight years ago remember an election which he would come out with miniature programs, school uniforms, to many others at each of these stops. We all laughed at it at the time. And it worked for him. Are we seeing a little bit of the same going on here with the community college initiatives and so forth?

Jackie Calmes, The Wall Street Journal: Absolutely. Boy, when you suggest that to them, aren't you feeling a little Clintonesque today? It's like the worst thing to say to them. It's so upsetting. It's the constraint -- just like Clinton had at the time, the deficit and Bush cannot do anything. He's trying to lay a trap for Kerry here in a way that as he tries to put an agenda together, he wants to be able to answer the question, which he hasn't forced himself to answer up to now, how do you pay for it? And it's not just Kerry, it's his base. A conservatives are after them bigtime to hold down spending. He wants to come out and say, Kerry's got all these ideas. He says he's going to cut the taxes, cut taxes of the richest people, but he's spent that money many times over. But they ask, do we have the credibility to say that we would be more fiscally conservative? I'm not sure the president does.

Michael Duffy, TIME Magazine: If they are studying the history of 1986, we have one of the old historians here with us. I thought I would ask.

Alan Murray, guest moderator: "Showdown at Gucci Gulch", still available!

Jackie Calmes, The Wall Street Journal: Not out of print.

Alan Murray, guest moderator: This is public television, we don't do commercials.

Michael Duffy, TIME Magazine: So, could they come up with a plan that could conquer -- could this town pass real reform that lowered tax rates for everyone?

Alan Murray, guest moderator: A couple of big difference between now and 1986. One is the top tax rate in 1986 was 50%. Now it's down below 30%. That's a dig difference. -- big difference. There was more room to come down. There were a lot more loopholes in the tax system then than now. If you look at the big loopholes today there are things like the home mortgage deduction, the state and local tax deduction. Health care insurance deduction. Those are things that are going to be hard to go after.

Michael Duffy, TIME Magazine: I also think that they have -- they need to say something that at least catches people's attention and suggests they have something big to do.

David Sanger, The New York Times: That's what's missing out here with the ownership society, because the president has been saying the ownership society line for probably a year and a half. It hasn't exactly caught fire.

Jackie Calmes, The Wall Street Journal: Right. They think that's because everybody's attention has been on Iraq and the war on terrorism. And now they can say it and people are listening. I'm not so sure that's true and they are not so sure that's true. They will talk about Social Security.

Alan Murray, guest moderator: OK. We are going to be listening when they do talk about social security. Arrests in pakistan and great Britain over the last two months have been characterized as significant steps in the post-9/11 war against terrorism. This week, president Bush took another step. He tapped retiring house intelligence committee chairman Porter Goss to be the new director of central intelligence. An eight-term congressman with C.I.A. roots, is he the man to turn around the agency after three years of tough times? Michael?

Michael Duffy, TIME Magazine: This isn't a one-man job, and it looks probable that Goss will be confirmed some time in September. The president did a very clever thing. He nominated someone with 0 or 85 days to go after the election. He knew the democrats would be unwise to stop it because no one wants to have a leaderless C.I.A. at the moment when we are having al Qaeda operatives sizing up buildings in New York and thinking about taking over helicopters. And the democrats will go through the hearings probably in September and try to make the point you shouldn't have someone who is a C.I.A. director who is too political. But that's -- it's interesting, the president has gotten more on the offensive about perceived perhaps weakness on how he's managed intelligence as president. By proposing Goss, by coming out for some version of the 9/11 reforms last week. And they have been much more aggressive this week in saying here's what we are doing and try to roll up these networks.

Alan Murray, guest moderator: Porter Goss is not seen as being friendly to the reforms that the 9/11 commission put forward. Is Bush trying to block those reforms?

Michael Duffy, TIME Magazine: He's a former clandestine officer in the C.I.A. he was a spook for 11 years in Latin America. As chairman of the intelligence committee on the house side for seven years he's been a good friend of the C.I.A. when he has been critical of them he's done it secretly. I guess once a spook always a spook. And he has not taken the high public role in criticizing them the way guys on the senate has. No one thinks he's a reformer.

David Sanger, The New York Times: When he steps on the floor and says the C.I.A. is dysfunctional, it messed up in Iraq --

Michael Duffy, TIME Magazine: About the time George Tenet announced he was going to step down.

Jackie Calmes, The Wall Street Journal: Here's my question, all this was known about his background when tenet stepped down. There were people immediately threw out Porter Goss' name. Mr. Bush could have named him then. And he didn't. So when he did choose to name Porter Goss, he names him just after the 9/11 has come out with its report in which it faulted in strong terms congress' oversight of intelligence, and who is one of the people that's been in charge of intelligence on the hill? Porter Goss. How do you explain that?

Michael Duffy, TIME Magazine: I have my theories. I think this, I think when he first got cold feet about Goss, there were people who thought he wasn't enough of a reformer, I don't think anyone anticipated the speed which the 9/11 reforms would take place. The White House realized if we are going to have a new massive superspook agency or national intelligence director, we have one of our guys in place who can take it. So they I think then became much more interested in filling the top job at the C.I.A. because if it turned out -- it's possible, I don't think it's likely, it appeared possible a few weeks ago we might have this thing before Halloween. They might actually put it through congress. I think it slowed down since then. I think the White House wants to be ready to have their own guy so they can either move him up or have their guy at C.I.A.

David Sanger, The New York Times: In talking to intelligence types for the past week or so, the point's been made to me that there are two types of reforms we are discussing here. The move the boxes around reform which is the national intelligence director and so forth. That's a debate everybody in Washington knows because it's bureaucratic. Then there's the Iraq problem which was not bureaucratic at all. It was bad reading, bad analysis of the information and group thing. What do any of these reforms that we are discussing do to address that issue?

Michael Duffy, TIME Magazine: There are so many different reforms on the table, different things do different -- there are different solutions to them. The main thing I think everyone should keep in mind is that there seems to be a coalescing around the idea of creating some kind of new central authority on intelligence which the white house would like to have -- it's a matter of where you put it, democrats want to give it a certain amount of authority to actually decide how the money is spent. In the end the fight will be about money. You have to keep in mind that of the $40 billion or $50 billion we spend every year on intelligence, 85% is intelligent by the pentagon. It's the central thrust of the 9/11 reforms is, let's take this out of the hands of the pentagon and give it to someone who can look at the entire 15 agencies and decide what we need as a country. Here's why. If you have 85% of the money spent by the Pentagon, they are going to spend it on battlefields, and soldiers. If you're an enemy, main enemy isn't on the battlefields and doesn't carry guns, you might look in the wrong place.

Alan Murray, guest moderator: While there is real movement in the direction of that kind of reform, who Congress -- what Congress doesn't seem to be doing is taking up the strong suggestion of the 9/11 commission that congress reform itself. There is no movement.

Michael Duffy, TIME Magazine: It's impossible to imagine how they could unwind that mess. There's 80 committees. They are unwilling to give power. They have had 18 hearings. Nobody is willing to talk about that.

Jackie Calmes, The Wall Street Journal: If I could add something because it does bear on the e-- election. We are talking about what Congress will or will not do. Congress has six or seven weeks at most to work when it comes back. We are talking within those weeks three, at most four-day workweek. They have a lot of other things to do. They have the appropriations for the entire government. They have passed just one bill. They've got -- they still would like to do an energy bill. We just had the anniversary of the blackout today, a year ago. And there was always this promise they would come back in September and do an energy grid overhaul. They haven't done it. Now this September we are going to overhaul the intelligence community? I don't think so.

Alan Murray, guest moderator: That means we are going to be back here in December sitting around the table talking about the lame duck session.

Jackie Calmes, The Wall Street Journal: That's the amazing thing. They are talking about it.

Alan Murray, guest moderator: The political story we can't ignore. The governor of New Jersey, James McGreevey, held a press conference to announce that he is gay and he is quitting.

James McGreevey (on tape): My truth is that I am a gay American.

Alan Murray, guest moderator: He was not only gay but had an affair with a high-ranking state employee who today released a statement accusing the governor of quote, repeated sexual advances. Michael, what do you make of this?

Michael Duffy, TIME Magazine: I think it proves it's hard to be a good politician if you're a dishonest person. He was gay, but he was also dishonest about a whole bunch of things in his life. If you are dishonest about a big thing in your life, you look the other way if you have little things. He has a long history of sort of ethical, bad ethical judgment.

Alan Murray, guest moderator: We are not just talking about personal dishonesty. He was on the state payroll.

Michael Duffy, TIME Magazine: That's right. I'm talking about -- using state money, cars, that kind of stuff. I think this is just -- didn't understand --

Alan Murray, guest moderator: Does this have national implications or strictly a New Jersey story?

David Sanger, The New York Times: I suspect it probably does not any more than the Connecticut governor scandal had national implications. Because the situation in this case is peculiar to a state and to particular individuals. It might have national implications if we weren't in period of time where there are these big issues we are discussing today from terror to war to the economy. I think as a result of the fact we are going through those issues, this will get less time than it might otherwise.

Jackie Calmes, The Wall Street Journal: I agree with David. I don't see a national repercussion here.

Alan Murray, guest moderator: Certainly one of the most extraordinary press conferences I have ever seen. And almost totally personal. He didn't address the public policy issues, the questions of corruption involved. It was "I am coming out as a gay man".

Michael Duffy, TIME Magazine: It was a slick way to quit.

Alan Murray, guest moderator: It was. Now there's intense pressure on him to quit sooner so that the republicans can try and field a candidate for the November election. We'll see where that goes. We'll have to leave it there for tonight.

Gwen Ifill has been selected to host the vice presidential candidates' debate this fall. And Jim Lehrer has been selected to host a debate. And Gwen Ifill will be back here, around this table, next week on "Washington Week." Good night.