Recap of Saturday, November 1

This is a partial transcript from The Beltway Boys, November 1, 2003, that has been edited for clarity.

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MORT KONDRACKE, CO-HOST: Leading Democrats unveiled a new liberal think tank this week, the Center for American Progress (search). They say it will give their party a unified message that it lacked in 2002 and counter the well-funded network of conservative policy shops and their army of talking heads.

The man spearheading the new group is former Clinton chief of staff John Podesta.

Welcome back to the show, John.


KONDRACKE: OK. The headline story of the week was 7.2 percent growth rate for the last quarter...with an outlook of 4 to 5 percent growth in coming quarters. Doesn't that take the economic issue away from the Democrats? And, you know, just before, let me anticipate what you're going to say, jobs will be coming, won't they?

PODESTA: Well, that remains to be seen. You know, we've lost 2.6 million jobs in, in the economy. I think George Bush is almost certain to leave his first four years in office, maybe his last four years in office with, as the first president who's lost jobs over, over a four-year term since Hoover, Herbert Hoover.

But I think really what the, what the meaning of that number is, is that it shows that, you know, Keynesian economics still works if you borrow hundreds of billions of dollars to provide a, a tax cut and a defense buildup, you're going to get some short-term bump in, in the economy. The real question is, where are we headed in the long term?

And that looks pretty bleak.

KONDRACKE: Well, that, I mean, the Keynesian bump did work for Ronald Reagan (search) very well in 1984, didn't it?

PODESTA: Well, you know, if you're concerned about the next election, which I think the president certainly is, and it'll work in those terms. But I think over the long haul, what we've created in doing that is a 5 percent structural deficit in the economy, 5 percent of GDP, which is a huge deficit, which, in the long term, is going to lead to what we saw in the late 1980s, which is a triple-dip recession, which is low job growth, which is high interest rates...


PODESTA: ... and low investment.

KONDRACKE: Let me move on to foreign policy and, and Iraq particularly. This is the kind of argument that I think you're going to get from the Republicans, and frankly, I wonder, the, answer to it myself.

If you were Saddam Hussein, John Podesta, would it not give you comfort to look over at the United States of America, and see potential presidents of the United States, and I'm referring to Kerry and Dean and Clark and Edwards, voting against the money that it keeps that, that will, that it takes to keep America in Iraq and, and reconstructing the country?

PODESTA: Look, I think all those senators are people who believe in supporting the troops that are on the ground. But I don't think anybody deserves a blank check if they've failed to provide a policy that looks to the long-term future in Iraq.

I think that the -- this is a policy that was built on deception at the front end, no planning at the back end. We've got a circumstance in which the president now says the bad news is the good news, which is sort of remarkable. And I think that those senators were reacting to that.

In my view, we do need to stay the course in Iraq, but I don't think that means that anybody owes a blank check to the president. We've got...$20 billion in reconstruction money in there. Most of that money's going to a few defense contractors on sole-source bids. And I think people have tremendous questions about whether there is any long-term strategy here.

FRED BARNES, CO-HOST: I can argue with you about blank check. I don't think it is. But let me ask a question about your new think tank, and that is, are you all trying to develop new ideas for Democrats? Is that your purpose?

PODESTA: No, I -- we're a nonpartisan institution, so we're trying to develop new ideas for the country.


PODESTA: And we hope, you know, foreign policy conference this week. We had independents, we had Republicans there.

BARNES: Right.

PODESTA: We're looking to the long term. We want to build up a long- term infrastructure and analysis of ideas. And at the same time, I think we want to provide an effective critique where we think the radically conservative direction of the country is going and provide that.

And most importantly, I think what makes this a little bit different is that we want to do -- to borrow a page from our friends on the right, we want to get out there and try to sell those ideas, and sell that program, if you will, to the American public by being on television, on the radio...on the Internet, et cetera.

BARNES: Well, here you are.


BARNES: Are you worried about the phenomenon of reactionary liberalism, which I think is rampant among liberals in Washington, whereby they believe no domestic program can be reformed or, or cut, it can only be expanded? And, and like Medicare, Democrats in the Senate are insisting that it, it has to be expanded, that you can't have free-market reform.

PODESTA: Look...

BARNES: Aren't you worried about that?

PODESTA: I think, I think...

BARNES: Block new ideas?

PODESTA: Yes, I think if you're chained to the old orthodoxies, you never come up with new analysis and new ideas and moving forward. We're always in a time when what's important is to look forward, to look at the challenges that the country faces today, and think about ways that they could be addressed.

I think the values are enduring. The need to provide opportunity for all, the need to provide people with the tools they need to succeed, the need for a fair and just America, those are enduring values.

But I think programmatically, we got to be willing to get rid of the stuff that doesn't work and to provide ideas about what would provide a better future for the country and for all the people in the country. And for that matter, the people of the world.

KONDRACKE: John, at your conference, you and any number of people suggested that the Bush administration is going to charge or impugn the patriotism of anybody who raises objections to his foreign policy and specifically Iraq. Can you cite any example where that's been done up to this point?

PODESTA: Sure. The attorney general, in congressional testimony, has gone up and attacked and impugned the patriotism of the people who are his critics. And if, you know, I'll provide you a transcript if you want, Mort.

But I think they're, they're quite able and adept at doing it. I think that, you know, it becomes more subtle when it gets to the presidential level.

But you saw that got pretty close to the line with Senator Max Cleland in the election in 2002. And here's a guy who's lost three limbs in the Vietnam War (search), and they're, they're accusing him of being unpatriotic because he didn't support everything the president wanted.

BARNES: John, thanks very much. Look forward to having you back.

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