<i>FTN</i> Transcript - Aug. 27

Bob Schieffer, CBS
News Chief Washington Correspondent: Today on Face The Nation, Republican vice presidential nominee, Richard Cheney. It's been more than a week now since the Democratic convention and Vice President Al Gore continues to lead in the polls. What will George Bush do now? And is Governor Bush winning the debate over tax cuts and military readiness? We'll ask his running mate, Dick Cheney. Dan Balz of The Washington Post' and Rick Berke of The New York Times' join us with perspective on Campaign 2000. Plus, I'll have a final word on fessing up. But first, Dick Cheney on Face The Nation. Joining us from Jackson Hole, Wyoming, Republican vice presidential nominee, Richard Cheney. Mr. Cheney, thank you for joining us this morning.

Dick Cheney, GOP VP nominee: Morning, Bob.

Schieffer: The man at the top of your ticket, George Bush, caused quite a stir at the Republican convention when he told them that the U.S. military is in decline. He said the U.S. military is a place of low parts, low pay, low morale. He said that two divisions, if called up at this particular time, would have to report not ready for duty. Yet we've now had two secretaries of Defense, a former and a current, and two chairman of the Joint Chiefs of Staff, a former and a current, who say, frankly, that's just not so. What's the answer here?

Cheney: Well, the reference the governor made in his speech was to the report the Army had produced late last year which showed that, in fact, two of the divisions were not up to snuff in terms of the readiness criteria. They may fixed them since them and addressed those problems, but that's not the issue here, Bob. The issue is the overall state of the military. And there is an enormous amount of evidence available that, in fact, we've got serious problems in terms of decline. We've got recruiting problems. We've got retention problems. We're not able to keep pilots, for example. We're having problems with combat readiness. If you look at combat units in the United States Air Force, at the beginning of this administration, 85 percent were combat-ready; today, that's fallen to 25 percent. The Army recently released a study that showed 40 percent of their helicopters are not combat-ready. And that the average commander of an aviation battalion today only has 1,000 hours of flying time, as contrasted with 2,000 hours of flying time 10 years ago, and go on and on and on.

The fact is, there's a lot of evidence out there that we are, indeed, encountering difficulties maintaining our quality military force.

Schieffer: Before we go on and on, you say that was the state - he was basing his statements on something that was in a report last year. Last year was eight months ago. Why would someone running for president use figures that are eight months old?

Cheney: Well, Bob, with all due respect, the point s that they did report at the end of last year that two of the divisions were not ready. That was one example the governor used. All of his others are valid as well: spare parts shortages, serious morale problems. There recently was a survey done by the General Accounting Office of over 1,000 young officers and enlisted men. It showed that a majority of them were thinking about leaving the service after the first term, rather than staying, because of their dissatisfaction of the current state of affairs. Both the Army and the Navy, for five years in a row now, failed to commission as many officers as they need. We've got a serious problem in the military. The governor pointed at that very directly and very correctly in his speech in Philadelphia.

Schieffer: Well, just to pick up on that one point. Are you certain of that? Because it's my understanding that all branches of the service say they expect to meet their enlistment goals this year.

Cheney: Well, they may expect to, but they haven't been doing it. The Navy started out some nearly 10,000 enlisted sailors short at the beginning of the year with respect to what they require for their at-sea deployments.

Schieffer: Let me just ask you this going back - I don't want to belabor this about using figures that are eight months old, but isn't that a little bit of a cheap shot? I mean, it's not as if that somebody in the Bush administration couldn't have checked with the Pentagon and said, "Is this still the case?"

Cheney: No, Bob, no, the problem here is, is first of all, it takes a very long time to build quality military forces. You can't just turn it around on a dime. You might be able to change the readiness status of one division in a few months, but the overall trends, the overall problem is there and you can't change it on short notice. It takes about nine years from the time Congress authorizes an aircraft carrier until you got a full-up round, ready to go to war, 25 years to train an officer capable of commanding an modern armored division in combat. It's like a great big huge ship, and once you start down that slippery slope of declining readiness, declining morale, shortage of spare parts, inadequate training, it feeds on itself, and what you get is good people leaving; they will not sign up.

And one of the problems that I've come across, and I still talk with a lot of people in the military, is what they call the birthday problem. Say, well, what's the birthday problem? The birthday problem is when somebody's away from home three or four years in a row on their kid's birthday.

Part of the difficulty here, as they've shrunk the force, they've added a lot of commitments and so we've got a lot of people who are away from home more now than they ever were in the past. That affects morale; that in turn affects reenlistment rates when you lose those top-quality people, you end up having to fill them with folks who don't ave as much experience, and that hurts the overall quality of the force, and it is happening. It's out there. Anybody who's talked to folks in the military or has family serving in the military knows what I'm saying's absolutely dead-on.

Schieffer: But with the military - all of the branches saying now they expect to meet their enlistment goals this year, does that not suggest that perhaps they're solving these problems?

Cheney: Well, we'll see. The follow-on question is how are they going to meet them? Do they meet them? Will there be any reduction in standards, for example, in terms of reducing the standards that the incoming crop of recruit meets? We'll see. We do know, for five consecutive years now, the Army and the Navy have failed to meet their requirements to commission new officers, especially there, Bob, and you can't - it's not just a question of those divisions, that's just one example.

Schieffer: Let me ask you about one other statement that Governor Bush made when he said that the Clinton administration was hollowing out the military, when, in fact, the cuts in the military began at the end of the Cold War, when his father was president and when you were secretary of defense. Now, this administration is now increasing the defense budget.

Cheney: Well, first of all, we did reduce at the end of the Cold War because we couldn't sustain and had no justification for a Cold War-style force. Instead of being ready to fight 100 Soviet-led divisions invading Western Europe from the inter-German border, we had a situation in which the Soviet Union went away; it collapsed, it imploded.

We shifted our strategy from a global conflict to dealing with the regional conflicts, like Desert Storm and the Persian Gulf, but we called for a 25-percent reduction in force structure. That was a plan that I and General Powell developed on behalf of the administration.

But they've gone far beyond that. They've taken the Army from 28 - from 18 divisions down to 10. They've taken wings in the Air Force from 24 wings to 13 wings. They've taken the Navy from nearly 600 ships down, headed now to less than 300 ships. They've gone far beyond what was originally envisioned in terms of our build-down that we came forth with.

With respect to who's turned things around, well, frankly, it's been the Republican Congress. The Republican Congress has added about $50 billion in additional spending to administration requests over the last few years since they came in, in '95, so this track record is there, I think, for anybody who wants to really take a look at it. The fact of the matter is, the military has not been supported the way it should be supported during the Clinton-Gore administration.

Schieffer: You've talked a little bit about Desert Storm; that was generally seen as a success at the time, but Saddam Hussein is still there. Do you think on reflection, Mr. Secretary, it would hve been best to take him out and be done with it?

Cheney: Well, if he'd happened to have been in one of those command bunkers we hit, we wouldn't been sad about it, Bob, but the fact of the matter is that was never our objective. Our objective was to liberate Kuwait and to roll back Iraqi aggression. That was the mission I was given, the secretary of defense; that's what the Congress signed up to. That's what our allies in the international coalition signed up to, what the U.N. Security Council approved. Once we'd achieved our mission, then we stopped our operations. Now, Saddam Hussein's still there today. I don't think that says much of anything.

I think it would have been a mistake for us to go on to Baghdad. I think it would have sundered the coalition. None of our Arab allies was prepared to do that. We would have been all alone in Baghdad, and we would have switched from being the international organizer of this coalition that defeated aggression to a situation in which we were sort of a colonialist power, an imperialist power coming in, taking down governments and replacing them. That would have been a very, I think, big mistake for us, to blow, if you will, the great good will we led by leading the international effort, rather than being in a situation where we unilaterally proceeded to change a government.

Schieffer: I want to ask you about a couple of other things - this retirement package you got when you retired as the head of Halliburton. You got this ...
Cheney: Let's be precise. It's not a retirement package. These are things I earned while I was CEO of Halliburton. When I left, I didn't get any special treatment. I got exactly the same treatment any other executive retiring from Halliburton would get.

Schieffer: O.K., I understand that. That's fine. And I take your point on that. But, the fact is, you are now in possession of stock options on millions of shares of Halliburton stock. Some of those shares can not be cashed in for a couple of years, and that, if you're elected and Governor Bush is elected, that would be well into your term, which would seem to present a conflict of interest. What are you going to do about that?

Cheney: Well, first of all, there is no conflict until I'm sworn in on January 20. Second, I will do what I need to do to take all of my holdings and assets and put them in a blind trust, to comply with the requirements for a senior federal official. And I will take whatever steps I have to take to avoid any conflict of interest. That is to say, by the time I'm sworn in on January 20, I will have eliminated any possibility that I have a continuing financial interest in Halliburton stock or share price. It's a complicated question. You have to get approval from the Office of Government Ethics. There are various legal questions involved, and I have a team of very competent people looking at all of those issues. And I will garantee, Bob, that there won't be any conflict.

Bob Rubin, for example, managed to serve as Treasury Secretary without giving up his considerable interest in Goldman Sachs while he was part of the Clinton administration. I mean, this is a manageable problem.

Schieffer: Well, I mean, would one of the options be to just give up those stock options, or are you going to try to find a way to keep them?

Cheney: Well, I'd like not to have to give away all my assets in order to serve in public. I don't think that's required and shouldn't be. But as I say, we'll do whatever is necessary. We're looking at various possibilities.

One possibility is that you would give to charity any appreciation in the value of that stock prior to the time you exercise the options. The other is so-called synthetic shorts, which involved a combination of puts and calls that would fix the price at which the options would be exercised before I went into government, so that would I have no continuing interest in whether the share price for Halliburton went up or went down. Years ago, Dave Packard served as deputy secretary of defense, retained his ownership of Hewlett-Packard stock, a defense contractor, then gave away all the appreciation after he left office to charitable causes.

We'll find a way to work it out. I've got very bright people looking at it. I don't have to take any action until after November 7. Nothing is required to be done finally until January 20. And I will do whatever I have to do to guarantee that there's no conflict.

Schieffer: Let me ask you a little bit with about a new poll out by Newsweek that shows that when it comes to things like the tax cut, so far, people seem to like Al Gore's idea of a tax cut better than they like George Bush's. There does not seem to be much enthusiasm for the Bush tax plan. Why do you think that is, Mr. Cheney?

Cheney: Well, it's a matter of education, and that's partly what the campaign is all about - is for us to get our ideas out there. If you're going to provide leadership for the country, you need to sit down and make some decisions and move off and tell people what you think. The other way to operate is the way that, frankly, I think the Gore-Clinton folks have operated, that is to say, to go look at the polls and then peddle what they think the country already believes. We don't believe that's leadership.

And I think, from a tax standpoint, if you look at the package, fact of the matter is the Gore package doesn't do what he says it will do. We had the example this week of the Beshack family from Louisiana, somebody making $40,000 a year as a high school coach, two small children, a wife who stays home, who gets zero benefit under the Gore tax package, a working family, obviously, that's not going to benefit at all from it. Under the Bush proposal, gets $1600 in relief.

It would have a significant impact because we increase the cild credit and cut rates. The tax package that Governor Bush has put forward is a significant reform of the system. It's not just a reduction. It cuts rates for everybody. It goes from five brackets to four brackets, does a lot of things that need to be done.

Schieffer: Let me just ask you one question. Do you think that one reason that there doesn't seem to be all that much enthusiasm about it is that people are a little afraid of it? They see the chairman of the Federal Reserve, Alan Greenspan, raising interest rates slightly for fear that the inflation - that the economy will heat up. Do you think there might be a fear that if you put in a big tax cut like this, it might just set off inflation, and then the interest rates would have to rise and people would get nothing, in the end, from it.

Cheney: I don't think so. I think if you look at the overall package, the fact that it does get phased in over time, the fact that we've got some very intelligent, knowledgeable economists who will support it, think it's the right thing to do, the fact that we're talking about reform, not just reductions, all of those things point in the direction of, I think, guaranteeing continued prosperity in the economy.

One of the keys here is we're taking down the marginal rate on that new dollar of income, going from roughly 40 percent of the top bracket to 33 percent, taking the lowest bracket from 15 percent down to 10 percent. A lot of what that does is encourage people to go out and work and save and invest and to grow their businesses, to grow their enterprises, to make more and to save more. And that means a strong, healthy economy for a longer period of time.

It's the kind of thing that was also done at the beginning of the Reagan administration and, I think, gets a lot of the credit for why we have a prosperous economy today.

Schieffer: All right. Dick Cheney, thank you very much. Hope to see you again.

Cheney: Thank you, Bob. We will.

Schieffer: Back in a moment with more on Campaign 2000.

(COMMERCIAL BREAK)

Schieffer: Joining us now to lend some perspective on the week's campaign news, two of the best in the business, Dan Balz, who covers politics for The Washington Post - (and) Rick Berke, who covers the same for the New York Times. Dan, what did you think of the interview just now?

Dan Balz, The Washington Post: I was struck by the fact that Secretary Cheney seemed to be on the defensive over an issue that I think the Bush campaign always thought they would have the offensive on - and that is, the state of the military and foreign policy, that they assumed that would be an issue they could drive hard against Gore and put Gore on the defensive.

And I think it speaks more broadly to the kind of problem they find themselves in, a week after the Democratic convention, which is that on a number of issues, whether it's the ilitary or the Bush tax plan, they're having to defend things, rather than being able to push out the message they really want to push out.

Schieffer: It is kind of interesting, isn't it, that the response, when they say that - and to counter the response that says, "Yes, those divisions are ready," they say, well, it's based on figures that came out last year. It seems to me on something this serious, you would at least go back and check and say, "Is this still the case?''

Richard Berke, The New York Times: One of his key assets is that he was defense secretary. Here he is, he should be using that to his advantage. Instead, they're using it against him. And, as Dan said, he was on the defensive today.

But I think this also speaks to the larger problem of Cheney as a running mate, because when he was selected, some people said, he is a good choice for governing. It shows that George Bush is not afraid to have someone with more experience next to him in the White House. It shows that he's not overly concerned with politics.

Other people said it was an unwise choice because it showed an overconfidence on Bush's part, picking someone who is not known for his political skills, his campaign skills. Now we find him on the defensive on the military, on Halliburton, even, you know, even the talk show hosts said, and the late night hosts are talking about his heart still, his heart condition. So this is not necessarily a good place for the Bush campaign to be in, especially when you compare it to Joe Lieberman on the Democratic side who is being portrayed as this happy warrior.

Schieffer: What do you all make of this bounce that Al Gore seems to have gotten out of the convention? I'm going to - I'm going to tell you, I did not think Al Gore made all that great a speech. I mean, it was a good, responsible, solid speech. He laid out his positions, but it didn't seem inspiring to me. And, yet, he seems to really have gotten a bounce out of it. Do you think that's for real, Dan?

Balz: I don't know if it's for real. It seems a little more real than the Bush people had hoped it would be. It seems to be sticking somewhat longer, although I think everybody is waiting for the polls that come after Labor Day, rather than the ones that come before Labor Day.

I know the speech got a lot of criticism the night it was given, but it's hard to recall a convention speech by a nominee that hasn't gone down pretty well with the public. It tends to be like State of the Union addresses. People look at a candidate for the first time in a different way, and I think that's what Al Gore has benefited from. And as we've seen in polls all year long, that if this becomes a fight over particular issues, the Democrats have tended to have the high ground, whether it's on Social Security, Medicare, prescription drugs, even some of the education proposals that are out there. And what Gore was able to do wih that was to refocus on the issues for the time being. And the Bush campaign is now struggling to try to push it back to a question of leadership and personality.

Schieffer: Do you think the kiss had anything to do with it, Rick?

Berke: It's funny. Now everyone is saying Gore was brilliant with the kiss. And people are saying, well maybe, you know, maybe Bush should have done that, you know. They're rethinking everything.

But what is interesting about this whole bounce issue is to hear the Gore people say, oh, we knew all along this would happen. This is our brilliant strategy that we've been talking about for months. We knew we would come back in the polls. And now they're saying this is a transformation, and we're ahead or we're even. And the Bush people are saying this is just transitory. But it's interesting how they're all - how the Gore people are patting themselves on the back for this.

But I think, as Dan said, we have to watch the polls after Labor Day because that's the key moment. In every election since 1984, the candidate who was ahead after the conventions, after Labor Day, ended up winning the election. So both sides right now are scrambling to do all they can to get on the defensive.

It's no accident that Dick Cheney was put on your show and the other network shows this morning at the very last minute. They are trying to seize the attention and the momentum in this campaign.

Schieffer: You're the New York guy. Let me ask you about that race up in New York. What do you hear?

Berke: What race? (laughter) You know, it's, like, what happened? You don't hear about Hillary Clinton anymore; you don't hear about "Rick Who?'' Lazio. It's just ever since Rudolph Giuliani got out of the race, it is just not on the radar screen anymore. And I think Hillary Clinton helped herself a lot by getting all that free attention at the convention and that prime-time slot that really was her husband's prime-time slot. But - and this may be fine; I think in the next - after Labor Day, we'll start hearing more about this race.

Schieffer: Back to the presidential race. Do you think it is as close as it appears right now?

Balz: I do. And I think that both sides have anticipated that it would be a close race. I mean there's a tremendous amount of spin that goes on around conventions and the bounce and all of that. But I think both of these campaigns have been anticipating that by the time they got to Labor Day, this would be a race within the margin of error, and it would be a dogfight all through the fall.

Schieffer: Pretty good race so far. Thanks to both of you. I'll be back with a final word in just a minute.

(COMMERCIAL BREAK)

Schieffer: Finally today, whether it is crisis management or politics, the experts will tell you when you make a mistake, the best strategy to win back public opinion is to admit it, apoogize and move on.

Like United Airlines, for example, which is buying television commercials to apologize for bad service. They're not giving customers discounts or refunds or anything that costs them, but the head man's apology does seems sincere.

As did Attorney General Janet Reno when she took responsibility for the FBI raid that went wrong in Waco. She didn't resign or penalize herself in any way, but when she said it was all her fault, she actually went up in the popularity polls.

So I am compelled to make a full confession of my own. The CBS super-hit Survivor' has come and gone, and I never saw it. Now I'm not one of those snobs who claims never to watch television except for the occasional nature special on PBS.

I actually enjoy television, and I kept meaning to watch Survivor, but somehow never did. Nor did it occur to me that many people would have wanted to watch a group of scheming, unattractive people rooting around in the dirt on some island.

Even that guy who won - the one who kept trying to show us his business - didn't seem to be a person anyone would want to know. Which just shows what I know.

So I admit I was wrong. All my fault, but I'm on board now and ready to learn from my mistake. Since this was a big hit, I'm going to put in for a raise ... for being candid.

Maybe I won't get it, but I'm certain those Survivor people would tell me to go for it.

That's it from here.

END