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Is President-Elect Bush Scoring High Marks With His Cabinet Picks?

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: It's noon in Washington, 9 a.m. in Los Angeles, 6 p.m. in Vatican City, and 7 p.m. in Bethlehem. Wherever you're watching from around the world, thanks for joining us, for this two-hour LATE EDITION.

We'll get to our interview with Energy Secretary Bill Richardson in just a moment but first, let's check the hour's top stories.

We begin in the Middle East: President Clinton pushing Israeli and Palestinian leaders to sit down for more peace talks. In meetings yesterday here in Washington, Mr. Clinton offered several proposals to Palestinian and Israeli negotiators. The two sides are expected to respond to those proposals by Wednesday.

Palestinian leader Yasser Arafat is in the West Bank for the first time in nearly three months. He is expected to take part in Christmas Eve celebrations in Bethlehem.

This note: We will talk about the peace process with former Israeli Prime Minister Benjamin Netanyahu later this hour.

Pope John Paul II is urging Christians to remember those who live in, quote, "solitude and suffering." Pilgrims waited in rain in Saint Peter's Square to hear the pope's annual Christmas Eve message. Tonight the pontiff will return to the square to celebrate midnight mass.

The first official returns from Serbian elections are now in and the news is very good for pro-democracy candidates. The numbers show followers of Yugoslav president, Vojislav Kostunica, captured 177 seats in the 250-member Serbian legislature. That gives them more than the majority needed to change Yugoslavia's constitution.

In the United States, firefighters in Florida have taken upper hand over a fast-moving brushfire. The blaze started yesterday in Haynes City, Florida. At least one home caught fire and some residents evacuated the area. It's still not known what touched off the blaze. Conditions there are tinder dry as Florida suffers through its third straight year of drought.

Outside of Florida, the force of winter is being felt in many parts of the United States. And with it, the rising cost of heating oil and natural gas. That's fueling concerns here in Washington about an energy crisis. Earlier I spoke with U.S. Energy Secretary Bill Richardson about that, and more.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, thanks for joining us on LATE EDITION on this holiday weekend.

You have a month to go. Not even a month to go, basically, before you leave office. The Bush-Cheney team, as you know, during the campaign, a little bit less since the election, they hammered the energy policy of the Clinton administration, your energy policy, as a failure. Is that the legacy that you think you're going to be leaving, these high prices for oil, for gasoline, high heating fuel. Is it a failure?

BILL RICHARDSON, SECRETARY OF ENERGY: It's been in our judgment a success. In fact, when we come into the new year, we will leave the Bush-Cheney team lower crude oil prices that are about $26 per barrel today.

Home heating oil situation, in the Northeast we were expecting some real disruptions that are under control because of the president's use of the Strategic Petroleum Reserve.

We leave a solid energy policy. But it's good that he's embracing it. I think what is needed also is tax credits on energy efficiency, electricity competition. We need to drill more in this country. We need oil credits and gas credits for incentives.

I think we leave a...

BLITZER: You say the United States needs to drill more in the United States. He says, President-elect Bush, go for the drilling in Alaska, the Alaska National Wildlife Refuge. Why not go there? That is part of the United States, after all, and that would solve a huge problem if you drill up there.

RICHARDSON: That would be a bad move. Ecologically it would damage a very, very pristine area. And we've got plenty of other areas in the country where drilling natural gas and petroleum can take place.

I think what we need is incentives, tax credits.

What President Bush can possibly do with a Congress that didn't give us those tax credits for oil and gas drilling for being more energy efficient, that didn't give us an electricity competition bill, is persuade them perhaps that you need not just to drill in this country more, that you need to continue the diplomat engagement with OPEC countries, as we have had successfully.

BLITZER: Well, on that front, there was some implied criticism earlier in the week from President-elect Bush when he announced his new Treasury secretary, Paul O'Neill. He took some questions, and he said he promises he's going to get a little bit tougher with some of those other OPEC nations on a diplomatic front. Listen to what President-elect Bush said earlier in the week. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: There's no question that we're going to have to work with our friends and allies overseas, particularly with the price of crude oil and heating oil, to make sure they understand that they've got to treat their friend, the United States, and our market with ease. They can't be punishing our friend.

(END VIDEO CLIP)

BLITZER: Well, he says that he's going to get tougher with them, apparently.

RICHARDSON: Well, we've been very successful. In one year, we got four million barrels more per day. Look at the record, look at the results. Today, oil, crude oil, is $26 per barrel. It was $37 in October.

So our policies of quiet diplomacy, of engaging the OPEC countries, and, you know, being tough when we have to has worked. So we're leaving him in good shape there.

BLITZER: Well, you say the Saudis have been helpful. But earlier in the week, you were quite critical of Kuwait, Venezuela, and the United Arab Emirates.

RICHARDSON: What we want, Wolf, is to leave the Bush administration with a clean slate. OPEC is meeting in January. And some of the countries in OPEC, worried about declining oil prices, are saying that they want to have production cuts. That would be very unhelpful.

So we're going to work, in the remaining days, for the OPEC meeting January 17, to ensure that there are no cuts in production, because that would be bad for the international economy.

BLITZER: You know, a lot of Americans on this -- approaching the 10th anniversary of the Gulf War, the liberation of Kuwait from the Iraqi occupation. They have a hard time understanding the criticism of Kuwait. Why is Kuwait being a thorn in the side, according to you, right now after all that the United States did for Kuwait?

RICHARDSON: Well, in the end, Kuwait is always there for us at the OPEC meetings. They do make statements that they need production cuts. Eighty percent of Kuwait's budget comes from oil revenues. So I think that's for their domestic consumption.

We work well with the Kuwaitis. The Kuwaiti energy minister and I just spoke two days ago. They're going to be OK.

In the end, we are going to leave President Bush with an OPEC that works with us, with an OPEC that's increased production four million barrels per day in one year, and with oil prices at $25, $26 a barrel. That is very good.

BLITZER: It's not as good as the $14 or $15, which was a year earlier.

RICHARDSON: Well, that will never happen again.

BLITZER: Let's move on -- don't say the word "never." You never know.

It's going to be a cold winter. It's already cold in much of the United States. Stephen Brobeck, the executive director of the Consumer Federation of America, he was pretty blunt in warning that there were some serious problems, home heating fuel problems, especially for poor Americans. Listen to what he had to say.

(BEGIN VIDEO CLIP)

STEPHEN BROBECK, EXECUTIVE DIRECTOR, CONSUMER FEDERATION OF AMERICA: During this year's winter season, low and moderate income families will spend well over $1,000 on energy. That's over one quarter of their income during this period. Many will have to choose whether to heat, eat, or pay the rent.

(END VIDEO CLIP)

BLITZER: This is a serious problem for poor people.

RICHARDSON: President Clinton has used low-income energy assistance to help poor people with their home heating oil bills more than any other president. He just did it last week.

We think home heating oil prices -- first of all, I believe we're going to have enough in the Northeast, in the East, to avoid a supply disruption.

We also have, Wolf, through the president's directive, a Northeast home heating oil reserve. So if, in the Northeast, there's an emergency, we have two million barrels that we can tap into.

BLITZER: Well, you know, about 100 members of Congress, mostly Democrats, wrote to you this week specifically on that front. They said this, let me read to you: "If this release" -- the one that you've just talked about -- "is to have any positive impact on increasing heating oil supply and providing relief to heating oil consumers, it must be done during your administration. We simply cannot wait for the next administration, which may neither be inclined or capable of conducting a release to act on this request."

Will you do this before you leave office?

RICHARDSON: I have serious reservations in doing it. You only use reserves, you only use the Strategic Petroleum Reserve, in emergencies, not for prices. We think there's going to be enough home heating oil. We see prices stabilizing. I think you only use reserves in extreme circumstances.

BLITZER: You know, California and some of the West is facing enormous electrical problems right now. There's some talk they can't even light their Christmas trees because of the power shortages as a result, many say, of the deregulation. What are you doing about this potential disaster in California? And California sometimes leads the way to the rest of the country.

RICHARDSON: Well, as you pointed out, it is a state problem. But I've invoked what are called emergency powers twice now to make sure that power generators sell power to California. They were refusing to do that.

In the last three or four days, in California, that federal authority has been critical in keeping the lights on, because it's not just not just consumers, it's crops, it's businesses.

I think things are looking up in California. Regulators, the Public Utilities Commission, the governor, other states, the Federal Energy Regulatory Commission, our department -- we're working to come up with a compromise solution where you have enough power, rates probably in California may have to be increased, save some of those utilities that are having enormous problems, and basically protect consumers.

But the good news is that we've been able to use federal power entities like Bonneville Power, like Western Area Power Administration, to pump generation power from the West to California. We have to make sure that other western states that we don't drain their power exclusively to tackle the California problem.

BLITZER: We have to take a quick break, but on this California front, before we leave it, is the problem that is currently exploding in California going to develop elsewhere in the United States? Is that a precursor for the rest of the country, because of the deregulation of electricity?

RICHARDSON: It is very -- yes, there's that potential. Our electricity grid needs new investments. It's a Third World electricity grid with a booming economy.

The reason this has happened, Wolf, in the country and in California, is that California, with a booming economy, 13 percent more electricity demand in one year. In the United States, 14 percent more electricity demand with this booming economy.

So we've got to modernize our electricity grid. We've got to find ways to have more investment in it. They way to do that is an electricity competition bill. For a year and a half, we've been screaming about this issue in the Congress, and hopefully President- elect Bush can get the Congress to do it. We need this.

BLITZER: Mr. Secretary, we have to take a quick break. A lot more to talk about.

We'll continue our conversation with Energy Secretary Bill Richardson. We'll talk politics with him. What's next for Bill Richardson when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking with the U.S. Energy Secretary Bill Richardson.

Mr. Richardson, the Los Alamos nuclear security lab, all of that problem caused you enormous headaches. You were severely criticized. In fact, Senator Robert Byrd last June was very blunt and critical of you. Listen to what he said at that time.

(BEGIN VIDEO CLIP)

SEN. ROBERT BYRD (D), WEST VIRGINIA: I think it's a rather sad story, because you've had a bright and brilliant career, but you will never -- you will never again receive the support of the Senate of the United States for any office to which you might be appointed. It's gone. You've squandered your treasure. And I'm sorry.

(END VIDEO CLIP)

BLITZER: Now since then, about a month ago, you met with Senator Byrd. But those are pretty blunt words, the way you handle the energy situation over at the Los Alamos lab in New Mexico.

RICHARDSON: Well, he was also mad because I had not attended a Senate hearing, and there were some appropriations for West Virginia that he was concerned about. But we patched it up. We had a good meeting.

But that Los Alamos issue, no question, was a problem for me. The good news is that I think we've dramatically increased security at the labs, improved the security situation. And now it's reached a point, Wolf, where we have to get on with the work at those labs -- national security science. We can't be overcompensated with security.

The Congress put tremendously hysterical restrictions on us: 10,000 polygraphs for all the scientists, background checks, no foreign scientists coming in, even for unclassified work. We've got to achieve a balance between science and security.

BLITZER: You've also been criticized the way you handled the Wen Ho Lee matter. He was the nuclear scientist at Los Alamos originally charged with, what, 59 counts of illegal activity. He eventually pleaded guilty to one count of downloading restricted data to an unsecured tape. He's now cooperating with the investigators.

Looking back, he was painted as this potentially horrible spy, a Julius Rosenberg-type of potential criminal. And all of a sudden people are saying, "Well, maybe he wasn't as bad as you and others have suggested."

RICHARDSON: Well, I fired him for security violations at the lab, as you said, for downloading, for misrepresenting a trip that he had taken to a foreign country, for taking a lot of security violations.

The law enforcement case was other agencies.

Now, this chapter is not over. Our objective is to find out what he did with those tapes, because that contained some of our most vital nuclear secrets. We tried to find them at a landfill at Los Alamos. They weren't there. This chapter is not over.

BLITZER: Is he cooperating now?

RICHARDSON: Well, he's cooperating, but we still don't have a lot of answers. The Justice Department and the FBI I think are doing a very good job in trying to get to the bottom.

BLITZER: But what's the major question that remains unanswered?

RICHARDSON: Where are the tapes? What did you do with them? Why did you take them?

BLITZER: He says he threw them away, right?

RICHARDSON: Yes. Did you -- why did you copy them so many times? What did you do with the tapes? Did you give them anybody?

He hasn't answered those questions.

BLITZER: The Clinton administration -- you were an integral part, you were the United Nations ambassador, the energy secretary, diplomatic troubleshooter, you made trips to North Korea, elsewhere -- when you look back over this administration and your role in it, what was the saddest moment you had and the happiest moment, really, that you had?

RICHARDSON: Well, the saddest moment was sitting at my office at the Department of Energy, we had put all these massive security improvements, and then all of a sudden these computer hard drives are missing, and you can't do anything about it. You have to order your subordinates to do the job. They let me down. But I have to take accountability, too. So I took the heat. I would say that's the saddest moment.

BLITZER: And you took the heat not only there but effectively undermined your chances of being a vice presidential running mate.

RICHARDSON: Well, that didn't help, that's for sure. Yes, that adversely affected it. That took me out of the running. And I was in the mix, in any event.

The happiest moment, there are a lot of them at the Department of Energy, knowing that some of the work that I did is responsible, for instance, for thousands and thousands of nuclear weapons workers that in the past may have been contaminated. And now because of efforts that we made, and the president made, they will be compensated and treated and their families will be taken care of.

RICHARDSON: I think that's a good legacy. The government in the past had lied to these workers. Contractors had lied to them. If they worked on these weapons, "You won't be contaminated." The record was not good on the part of our government. And the fact that we owned up to it, and we said, If you can prove that there's a link between the illness and your work, we're going to take care you, that affects thousands of workers. BLITZER: There was some talk that you would want to be chairman of the Democratic National Committee. Terry McAuliffe is President Clinton's favorite fund-raiser and his potential chairman. But the former mayor of Atlanta, Maynard Jackson, is looking at that. Did you want to be chairman of the DNC?

RICHARDSON: No. Some had suggested it to me. I've got to get on and earn a living. I'll be unemployed January 20.

On the McAuliffe issue, I just didn't like the way it was done. I think that they way you get a chairman is, you ask the party workers, you talk about issues. Democrats around the country -- Beltway decisions shouldn't dictate that.

But McAuliffe I think is a good choice. He's a good man. But I didn't like the way it was announced, five people talking about it.

BLITZER: Is President Clinton the leader of the Democratic Party now, or Al Gore?

RICHARDSON: I think both of them are.

BLITZER: Well, who's the real leader, though.

RICHARDSON: Well, it depends on what Al Gore wants to do. I believe he ran a good race. He is owed respect. He is young. He's not going to fade away. He will have a role in the party, but so will President Clinton. He has sent a signal that he's going to be a major player, and I think that's good.

My point, though, Wolf, is that there are a lot of African- Americans, Hispanics, women's groups, labor -- the coalition of the Democratic Party that needs to be part of not just issues discussions but discussions about what's going to be the future of our party.

Al Gore ran a good race, but the reality is, we don't control the Senate, we don't control the House, and we don't control the presidency.

BLITZER: Now, you're thinking and thinking seriously maybe down the road two years running for governor of New Mexico, your homestate.

RICHARDSON: Well, I definitely am going to spend a lot of time in my home state. I'm looking at that race. There's another race there, too. I don't want to fade away from politics. I love government. I really appreciate the chance the president gave me to serve in two Cabinet positions. I loved being in the Congress.

I'll be back.

BLITZER: Any final word of advice for President-elect Bush?

RICHARDSON: You've really got to be bipartisan not just in words. you've got to appoint Democrats to your Cabinet. I said Democrats, not just one.

BLITZER: What about you? You're a Democrat.

RICHARDSON: No, no, I'm gone, I'm out of here. They don't want me either.

BLITZER: Who do you want to be the next energy secretary?

RICHARDSON: Well, I think Governor Tony Knowles of Alaska. He's a Democrat, he's a moderate.

BLITZER: He supports the drilling up there in the Alaska Wildlife Refuge.

RICHARDSON: Yes, he does. And so they are doing a good job on diversity in the Cabinet. There's a good mix. I think Whitman was a good appointment. I worry about Senator Ashcroft and civil rights, but he is a decent guy. Maybe he'll moderate his views on that a bit.

But they need Democrats. They don't have any Democrats in the Cabinet. And you can't just say, "I'm going to talk to you Democrats." You've got to relate with them on appointments, on policy, on deeds.

You know, it was very close election. The message is that there's a very strong Democratic presence in the Congress and in the country that needs to be brought in.

BLITZER: On that note, Bill Richardson, Merry Christmas, Happy New Year.

RICHARDSON: Same to you, Wolf.

BLITZER: And hopefully you'll be a frequent guest not only on LATE EDITION, "Wolf Blitzer Reports," my new show during the week as well.

RICHARDSON: Absolutely.

BLITZER: Even if you're out of government.

RICHARDSON: I may be pitching for the Orioles, you know.

BLITZER: I don't think so.

RICHARDSON: That's another thing.

BLITZER: I don't think that's going to happen.

Bill Richardson, thanks again.

(END VIDEO CLIP)

BLITZER: And up next, political upheaval in Israel. What impact will the country's upcoming elections have on efforts to reach a peace agreement with Palestinians. We'll talk live with former Israeli prime minister, Benjamin Netanyahu, in Jerusalem, when LATE EDITION continues. (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WILLIAM JEFFERSON CLINTON, PRESIDENT OF THE UNITED STATES: The parties are reengaging, and they have asked us to be involved and that is good. But we are going to be on their timetable, so I can't say for sure.

(END VIDEO CLIP)

BLITZER: President Clinton speaking cautiously this past week about the latest Israeli-Palestinian efforts to forge a peace agreement.

Welcome back to LATE EDITION.

Joining us now, live from Jerusalem, to talk about the peace process and the upcoming elections for a new prime minister is the former Israeli Prime Minister Benjamin Netanyahu.

Mr. Netanyahu, good to have you back on LATE EDITION. Thank you for joining us.

And the first question is the obvious question: Why aren't you running? Why aren't you challenging Prime Minister Ehud Barak in the election scheduled for February?

BENJAMIN NETANYAHU, FORMER ISRAELI PRIME MINISTER: Well, because in many ways this is a mock election. It doesn't really provide the people with a full, complete, democratic choice, because you are electing a prime minister but the Knesset is deadlocked, our parliament is completely deadlocked.

So you really need new elections for the prime minister and the Knesset to give the people the opportunity to choose both a head of a government and a Knesset that can form a stable government, which Israel so desperately needs. So when that happens I will consider my position.

BLITZER: But the polls show that you would have been a very strong candidate. In fact, you are ahead of Barak in the polls right now. Had you been elected -- if you would have been elected in February, wouldn't you have been, even without a new Knesset, a new Israeli parliament, wouldn't you have been in a better position to, in effect, rehabilitate your political career?

NETANYAHU: I think my political career has been fully rehabilitated. When you're leading 20 points in the polls, you must be rehabilitated.

But I can be prime minister. I could have been easily prime minister. There is no doubt in anyone's mind. But being prime minister and acting as a prime minister are two different things. I could be but I couldn't act. With the present composition of the Knesset, I would not be able to form a stable government, and Israel needs, now, a strong, stable government.

So sooner or later, within the next couple of years, probably before that, we'll have new elections. And then we could form the -- we could have the people choose the real path that they want to go to. And I think they need a different path from the one we are going in right now.

BLITZER: Now you're supporting Ariel Sharon, the Likud leader, the former defense minister -- foreign minister of Israel in his bid to -- in his bid against Ehud Barak. If Sharon does emerge as the next prime minister, won't he automatically be the leader of the Likud next time around, once the parliamentary elections are called for?

NETANYAHU: Well, he was the leader of the Likud now, and I think that is not the crucial issue right now. The personal questions are put aside. If personal questions were paramount in my mind, I would be running, as I said, and I would win.

But what's paramount in my mind is that we need a real choice so the people can choose. The choice of just unending concessions in face of violence or firmer policy that I believe we will need eventually with a new government.

BLITZER: And you're going to be aggressively campaigning for Sharon in the next two months?

NETANYAHU: Well, I certainly have given him my support, and I believe that most of the people support my view that the way to resolve the crisis that we are in right now is to restore a measure of Israel's strength and deterrence. It's the unraveling of Israel's strength that has produced this current crisis.

And you have to ask the question: How is it that a government that has offered the Palestinians the most far-reaching, the most sweeping concessions, shocking to many, including to me, the partition of our ancient capital of Jerusalem, and, yet, what they receive in kind is bullets and rocks and molotov cocktails and lynchings.

And it is not as paradoxical as some may think. It is a result of weakness that feeds on weakness. And in fact, we're telling the Palestinians it's OK to practice aggression against Israel. You're going to get rewarded with unimaginable concessions that no government in Israel previously was willing to do, Labor or Likud.

BLITZER: Earlier today, the Israeli Prime Minister Ehud Barak was quoted as saying this, and I want to put on our screen and read precisely what he said.

"We are talking about a difficult discussion for both sides on the most painful of issues. If we don't make an agreement and we drift, God forbid, into a situation of deterioration, there will be cracks in the other peace deals, as well," referring to Israel's peace treaties with Jordan and Egypt.

And he also went on to say there would be a completely different Middle East if there is no agreement in next five or 10 years, with an increase in weapons of mass destruction, Islamic fundamentalism, and a rise in terrorism.

As a result, he says, Israel must bite the bullet, make the kinds of concessions that he's offering to the Palestinians right now, to achieve a true and lasting peace.

NETANYAHU: Well, I disagree both on short term and on the long term. And, actually, I'm much more optimistic.

First of all, I proved in my three years in office that you can take a very explosive situation, which I received with bombs in the street and buses blowing up and so on.

And it took us a little less than a year to bring it under control. It's taken Barak a little over a year to take the quiet situation that we handed over to him and bring it into the worst security crisis in Israel's history.

I believe that what we should do is first stabilize the situation. And once it's stabilized and once the Palestinians change their message of incitement to their people with a message of reconciliation, do step-by-step incremental agreements that, I think, will afford better life for the Palestinians and the Israelis, reduce the friction.

But I don't think we can go a lot further than that right now because I don't think the Palestinians have moved psychologically to the point where they really accept the existence of Israel. They keep demanding not merely a state next to Israel but a state instead of Israel, which is what the demand for the inclusion of millions of Palestinian refugees in Israel would mean. It would mean end of the state of Israel. So I don't think they are ready yet for primetime peace.

But let me say, just briefly, that I think in the long term, I'm probably the only optimistic, rather, Israeli that you will find, Wolf, because I see the information technology revolution cracking up all these totalitarian regimes, all these anachronistic dictatorships that are still in the world.

And I think eventually you will have a more democratized Middle East. We could have a fuller, more complete peace agreement with a different Middle East when that happens. Until it happens, we must pursue a policy of strength and deterrence and incremental agreements. That's all we can do for the moment. And that's a Middle East peace, in a realistic Middle East, the way really is. And it isn't western Europe here, it's the Middle East.

BLITZER: You know that the foreign minister in Prime Minister Barak's government, Shlomo Ben-Ami, was in Washington these past few days, and was widely quoted as saying that Israel would be prepared -- his government would be prepared to cede sovereignty on the Temple Mount, what the Muslims call the Noble Sanctuary, the Haram al-Sharif, the part that is effectively already controlled by the Muslim clergy, in exchange for the kind of full peace agreement that Israel has sought. Is that something that you think Prime Minister Barak's government can now do in final two months before the elections, make that kind of concession?

NETANYAHU: I think that this is wrong on two counts. It is wrong substantively. It's wrong on timing. Substantively -- because you are dealing here with the holiest site to Judaism. This is the site of King Solomon's temple. It's the site of the Second Temple destroyed by the Romans. It's unimaginable.

BLITZER: But it's the third -- it is third -- excuse me for interrupting -- the third holiest Muslim site in the world, as well.

NETANYAHU: Well, it happens to be -- Jerusalem and the Temple Mount are mentioned in the Bible hundreds of times. It's not mentioned in the Koran even once.

But I think the important thing is that not only substantively is it wrong, it's also wrong in terms of timing. Because -- say you believe you want to do this -- which I think is remarkable. I mean, after having Arafat and his people shoot at Jerusalem from 250 yards away, you're going to put them in the heart of Jerusalem in the walls of the Old City and they'll just make life impossible. Jerusalem could empty of its Jewish residents. That's on the substantive side.

But procedurally, I just think it's wrong morally, and in many other ways, that a prime minister who is resigned, who doesn't have any mandate in the Knesset -- he's a minority of a minority in our parliament, he's a minority in the public opinion -- and to go against the wishes of the people just to try to save his political skin before elections, I think this is -- this is wrong. It shouldn't take place. And I don't think -- I don't think this will pass.

BLITZER: Mr. Netanyahu, you negotiated with Yasser Arafat. You made -- with Israeli military withdrawals from certain parts of the West Bank, you were at Wye River plantation negotiations -- those negotiations with him. Do you believe that Yasser Arafat, with whom you negotiated as well, is fully committed to a peace settlement with Israel?

NETANYAHU: We'll see. That's the whole point. He has evidently shown that he is not. And during the time that I served as prime minister, he was not merely waffling, he was violating agreements that we had signed earlier, the Oslo agreement.

So I introduced a simple principle. It's called reciprocity. And it says: I'll give you something, that is, Israel will give Palestinians something, if you, Arafat and the Palestinians, give us something in return, namely security, control the areas we hand over to you, from being used as staging ground for terrorists against us.

I have to say that this was a much more sober arrangement. I gave him as long as he gave me. But it wasn't a blank check. And I certainly wouldn't give him half of our ancient capital of Jerusalem. That's just not thinkable. BLITZER: When you negotiated at the Wye River Plantation, the agreement almost collapsed at the end because of the issue of Jonathan J. Pollard, the convicted U.S. spy for Israel. You thought you had an agreement, an understanding, with President Clinton that he would be released, he would be allowed to go to Israel.

As you know, President Clinton is now in the midst of making decisions on pardons. He issued some pardons only on Friday. Do you think you have an agreement, you had some sort of understanding with Mr. Clinton that should have allowed Jonathan Pollard to be released?

NETANYAHU: I think Pollard should be released because he did something wrong, he did something, frankly, at the behest of the Israeli government at the time. That was wrong, too. It wasn't acting against America; it was to provide us information against Iraq and other threats. But nevertheless, Israel should never spy on America.

Well, he served his dues, he should be out.

Did the president make that promise to me? Yes, he did. But he said that he couldn't fulfill it because of just a strong opposition within the American defense establishment.

I had hoped then, I hope at any moment, that ways will be found to release Jonathan Pollard. He's suffered enough, more than I think any other spy, or any other person convicted of spying, in solitary isolation for many years.

BLITZER: Benjamin Netanyahu, it was kind of you to join us from Jerusalem. Thank you so much for joining us on LATE EDITION.

NETANYAHU: Thank you.

BLITZER: And when we return: the changing of the guard here in Washington. President-elect George W. Bush introduced more picks for his administration. We'll talk about the new players and how they're likely to fare in confirmation hearings with Nebraska Republican Senator Chuck Hagel and Minnesota Democratic Senator Paul Wellstone.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: John Ashcroft is a man of deep convictions and strong principle. His job will be to enforce the law -- that's what his job's going to be -- in an impartial way, not in a political way.

(END VIDEO CLIP)

BLITZER: President-elect George W. Bush announcing his selection of Missouri Senator John Ashcroft to be the next attorney general of the United States. Welcome back to LATE EDITION.

Senator Ashcroft was one of several Cabinet announcements the president-elect made this past week. Joining us now to talk about those choices and a lot more are two senators who will have a say in whether the nominees are eventually confirmed.

In Omaha, Nebraska, Republican Senator Church Hagel; and in Minneapolis, Minnesota, Democratic Senator Paul Wellstone.

Senators, welcome back to LATE EDITION.

I want to begin with you, Senator Wellstone.

Senator Ashcroft is being widely criticized by some in the civil rights movement, others as simply being too conservative. Will you vote to confirm Senator Ashcroft as the next attorney general?

SEN. PAUL WELLSTONE (D), MINNESOTA: Well, I think, first, we have to have the hearing. I mean, I can only speak for myself. I mean, I know John personally. I don't agree with him on many issues, but I've known him in the Senate and have had a good relationship with him.

I think ultimately what this is going to come down to is, you know, important questions are going to be asked. They should be asked. There should be good, substantive discussion at the time of his hearing.

But the ultimate decision is: Is this somebody who is qualified? Is this somebody who you believe is ethical and will work hard?

And I think John, you know, can pass that test.

But, look, we will have the debate. The important challenge is to make sure that it's not a poisonous debate.

BLITZER: So, in other words, basically going into the confirmation hearings, Senator Wellstone, I hear you saying you have an open mind and you're ready to give Senator Ashcroft the benefit of the doubt, and you're inclined to confirm your fellow senator.

WELLSTONE: I think that's probably accurate. Again, all that I said, I mean. I never would say otherwise.

I do want to wait for some discussion on some of the important questions, but I think you accurately have characterized my position.

BLITZER: We're going to go to Senator Hagel in just a moment, but we're having some technical problems. He can't hear us right now. We're going to work on that. Let me continue asking you, Senator Wellstone, some more questions.

WELLSTONE: Well, the country's going to be blessed. We don't need to hear from Chuck.

(LAUGHTER)

BLITZER: We do need to hear from Senator Hagel.

WELLSTONE: I'm kidding.

BLITZER: He's a very important -- he's a very important senator.

WELLSTONE: Absolutely, absolutely.

BLITZER: Here he is. Senator Hagel, can you hear me now?

SEN. CHUCK HAGEL (R), NEBRASKA: Yes, Wolf, I can, thank you.

BLITZER: All right, excellent. We were just talking about Senator Ashcroft and the prospects of his being confirmed. Senator Wellstone said he's inclined to go ahead and give him the benefit of the doubt and to confirm him.

But let me read to you, Senator Hagel, from today's St. Louis Post Dispatch, an editorial in there about Senator Ashcroft that says this: "The Senate should set aside its sensibilities and scrutinize Mr. Ashcroft's record as it relates to the job of attorney general. In particular it should investigate Mr. Ashcroft's opposition to civil rights, women's rights, abortion rights, and judicial nominees with whom he disagrees. The Ashcroft choice is at odds with President- elect George W. Bush's image as a uniter."

Strong words from the St. Louis Post Dispatch.

HAGEL: Well, obviously any appointment to the Cabinet should and is going to receive very significant scrutiny. That's why we have confirmation hearings, Wolf. And I am sure Senator Ashcroft is going to be well-prepared to defend his record, and I think it's a good record.

So I don't see anything in that that is any different from any other appointee of any other administration at any other time.

We all come to this with a record, and we need to explore that record, just as Senator Ashcroft's record will be explored.

BLITZER: The other -- there's some controversy, Senator Hagel, emerging on the secretary of defense. Tom Ridge, the Pennsylvania governor, apparently is not being considered right now. His name was once considered as a possible defense secretary. It seems to be of some consideration for the former Indiana Senator Dan Coats, for the former Pentagon official, Paul Wolfowitz, who's a dean at Johns Hopkins University. Who do you want to be the defense secretary in this new Bush-Cheney administration?

HAGEL: Well, it's not my pick. And I am confident that George W. Bush and Dick Cheney will pick someone who, first of all, is competent, can do the job of secretary of defense, has the trust of the Congress and the American people.

The three members that are in contention, as you suggested, Wolf, certainly I believe all three qualify on every accord.

But speculation's fun in this business. But until the president- elect makes a choice, then we'll wait and see.

BLITZER: Senator Wellstone, it looks like President-elect Bush so far is picking, in the words of what Bill Clinton used to say, "a Cabinet that looks like America," with African-Americans, Hispanic- Americans, women.

BLITZER: Are you giving him favorable marks so far on his appointments?

WELLSTONE: Yes, I think so. I mean, I think -- look, President- elect Bush will be our president. He has the right to put forward people that he wants to work with, that he thinks will work well for the country. And I certainly think that, in terms of racial diversity, he is doing a very good job, and I give him credit for that.

I mean, there are many questions that abound, questions about what he's going to do on the environment, about whether there's going to be the investment in children and education, whether he is willing to take on pharmaceutical companies and do something on health care, questions about foreign policy that maybe Chuck and I, who are good friends, could get into in this discussion with you. But I think he has done a good job in terms of his nominees so far.

BLITZER: Is there -- Senator Hagel, how important is it for President-elect Bush to find a Democrat or two to round out his Cabinet?

HAGEL: Well, I think it is important to do that, and I've maintained that point right from the beginning.

But I think it is important this we recognize, Wolf, that President-elect Bush must bring people in around him to help him govern who share his philosophy about government, about governing. And I believe there are Democrats out there that do share that kind of philosophy.

BLITZER: Can you give us a name or two that you have in mind?

HAGEL: Well, surely, there are a number of names that have been floated who have taken themselves out of contention. Paul and my friend and colleague, John Breaux, being one of them. But a congressman from Illinois, Bill Lipinski, a Democrat whose name has been floated for a couple of Cabinet spots, those kinds of individuals; Charlie Stenholm, a congressman from Texas who is highly recorded in both parties. Their philosophy fits very closely to what Governor Bush's philosophy is about governing this country.

So there are many people out there, I think, in the Democratic Party, who could be brought in to help Governor Bush govern this country.

BLITZER: And I know we're going to take a break very shortly, but, Senator Wellstone, you've said earlier you're not standing by at your telephone, waiting for a phone call, are you?

WELLSTONE: Well, I was going to ask Chuck to suggest that I be secretary of labor, and then we'd have a little bipartisanship.

(LAUGHTER)

HAGEL: I love you dearly, Paul.

(LAUGHTER)

BLITZER: I don't think that's going to happen.

Let's take a quick break. When we return, your phone calls for senators Chuck Hagel and Paul Wellstone.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We are continuing our conversation about the next presidential administration with Nebraska Republican Senator Chuck Hagel and Minnesota Democratic Senator Paul Wellstone.

Senators, we have a caller from Wiggins, Mississippi. Let's take that call. Please go ahead with your question.

QUESTION: Hi, thank you.

I first want to say I believe President-elect Bush's selections have been right on target, great for America. But I'd like to ask Senator Hagel -- of course, our senator, Trent Lott from Mississippi, the majority leader, said that it will be an expedited process for the confirmation hearings. What do you anticipate, Senator Hagel, as far as the timeline with the inauguration for the actual confirmation hearings?

HAGEL: Well, first of all, thanks for the question. But it might be better addressed to my colleague, Paul Wellstone, because, as I think most of us know, for a period between January 3 and January 20, the Democrats will be in charge of the Senate. And we will accommodate our schedule to the Senate Majority Leader Tom Daschle for that period of time.

But to your bigger question, I look forward to -- and I think Paul shares this, but he can speak for himself, the confirmation process of the president's Cabinet to be expedited, it will be very quick. It doesn't mean that we will glance over the big issues, like, Wolf, at the top of our segment of this show mentioned, John Ashcroft's record. John Ashcroft, I believe, has a very strong, good record. We'll get into those details.

But this process is very important for the governing of our country. And it will be expedited. And we will get right to the heavy lifting here during that January 3 to January 20 period. BLITZER: All right. Let's take another caller from England. Please go ahead with your question.

CALLER: Hello.

BLITZER: Go ahead.

CALLER: Can you hear me? OK. Yes, I'm calling from England.

In one of our newspapers today, they confirmed what we've been seeing on British news and also on NBC that they're doing the Florida recount, the Miami media and Miami Herald, et cetera, and they've found that Gore in just one county alone, is 134 ahead -- votes ahead of Bush. And they still haven't counted the other counties. And that the...

BLITZER: Well, what's the question, ma'am?

(CROSSTALK)

CALLER: ... is trying to freeze the ballots for 10 years so that they can't be counted.

BLITZER: All right. What's the question? Do you have a question?

CALLER: Hello.

BLITZER: I was going to say -- let me just bring in Senator Wellstone.

(CROSSTALK)

BLITZER: I think I can paraphrase that question, Senator Wellstone.

I think she was driving at what would happen if in the news media, they discover that, lo and behold, all those dimpled chads and pregnant chads and hanging chads did have -- result in more votes for Gore? It doesn't really mean much now, after all, does it?

WELLSTONE: Well, it doesn't mean much in terms of who will be the president. But it does mean -- it does mean a lot in other ways. I mean, I think what could happen upon further investigation we find that there really were voting rights violations that this -- that the election could have turned out differently, if we find that out, I don't know for sure, then I think that'll be a real challenge for George W. Bush. I think there will be continuing indignation.

I don't want to sugar-coat this. Chuck and I work well together, but I think there will be indignation, communities of color and others, about the election. So the issue then will be whether or not we, quote, "govern from the center."

But of course, my definition is the center of people's lives. If you have a White House and you have a Congress -- and we have 50-50 in the Senate, which means we've got to work together -- that speaks to the issues that are important to people's lives, getting money out of politics, bringing people back in, health care, education, living wage jobs, respect for the environment, we'll be all right. Otherwise, I think we're going to have major debate.

The question is whether it's the kind of debate that's good debate and still civil, or whether or not you have, kind of, a politics of poison. That's what we've got to avoid is the politics of poison.

BLITZER: Well, let me ask Senator Hagel to follow up on that. If the news media, if they find out that maybe there were some more votes -- and even if there were some civil rights violations, George W. Bush is going to be the next president of the United States. Nothing can be -- is going to stop that from happening. How concerned are you about these issues that Senator Wellstone raises, perhaps the anger, the frustration, the legitimacy, if you will, of the next president?

HAGEL: Well, every point Paul made is exactly right. I think we must move forward. We have a president. That's been certified. It was very close, one of the closest elections in the history of our country. If in the event, as we unfold the process that's ongoing in Florida, we find that there were charges of fraud and -- beyond just your basic irregularities, then that will have an impact. And then it will be President Bush who will have to, it seems to me, reach out and make some effort to address some of those issues.

But I don't think we can unwind all of this, Wolf, and go back and try to replay it all. We've got to move forward. We've got a country to governor and a world to lead. And, yes, what we find out in the next few months is going to be important. We need to address it. But we can't unfold it all and undo it all. We must continue to govern and lead.

BLITZER: You know, I want to move on to talk a little bit in the few minutes we have left, Senator Wellstone, about the economy. Dick Cheney was speaking relatively bluntly over these past few weeks about being on the verge or at the door of a possible recession. I want you to listen to what Dick Cheney said earlier this week about the evidence that is out there about the downturn in the economy. Listen to this.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT-ELECT OF THE UNITED STATES: There does seem to be a lot of evidence out there. It's not just something that we are seeing, but a lot of evidence that, in fact, the economy has slowed down some. It was growing at a fairly rapid rate, on the order of 5 percent or better, and it's slowed.

(END VIDEO CLIP)

BLITZER: Is this politics, Cheney setting the stage, as some Democrats are suggesting, that he wants to leave a Clinton recession as being responsible, if you will, for the economic downturn? Or are there really serious reasons to be concerned about what's happening to the U.S. economy?

WELLSTONE: How about if, in my answer, I say both. I mean, I think, obviously, Vice President-elect Cheney is trying to sort of pin this, if you will, on the Clinton administration. I think that's a bit of a stretch.

On the other hand, I think there is news of some downturn. I think some of us look to the Federal Reserve to lower real interest rates. I think that could be terribly important.

I think, again, the real debate is going to be if this, then, is used as a pretext for over $1 trillion dollars in tax cuts, which many of us think was not only fiscally irresponsible but denies us our capacity to invest in children and education and job training and health care, I think you're going to have a major, major debate.

BLITZER: Senator Hagel, you have the last word. The $1.3 trillion Bush tax cut that's on the table, the proposal that he made during the campaign, does that have any chance of getting through this 50-50 Senate anytime soon?

HAGEL: Well, I don't know about anytime soon. I personally think we do need some tax cuts. I think across-the-board tax cuts are probably the fairest, whether that is $1.3 trillion over 10 years or $1 trillion or $750 billion -- I don't know what it is. That's going to be up to the new president, the leadership, and the Congress.

We're going to have to deal with the Democrats on this. A lot of factors need to play into this before any strategic decisions are made by President Bush, I would think. And that's what I would counsel him to do and how to move forward on the tax cut issue.

BLITZER: All right, Senator Hagel and Senator Wellstone, thanks to both of you for joining us. Happy holidays, happy New Year. And we'll have you back in the new year, hopefully in the not-too-distant future. Thank you very much.

HAGEL: Happy holidays.

WELLSTONE: Yes, happy holidays.

BLITZER: Thank you.

We have to take a quick break. For our international viewers, World News is next. For our North American audience, stay tuned for the second hour of LATE EDITION.

We'll check the hour's top stories with Gene Randall, then talk with the Reverends Jesse Jackson and Jerry Falwell about the divide between peace and politics in this season.

Plus, our LATE EDITION roundtable and Bruce Morton's last word. It's all ahead in the next hour of LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: This is the second hour of LATE EDITION.

(BEGIN VIDEO CLIP)

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: George Bush is against affirmative action.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REV. JERRY FALWELL, CHANCELLOR, LIBERTY UNIVERSITY: The government can't be expected to be -- to change hearts, change attitudes, change lifestyles.

(END VIDEO CLIP)

BLITZER: The Reverends Jesse Jackson and Jerry Falwell debate politics and pray for peace during the holiday season.

Plus our LATE EDITION roundtable: Steve Roberts, Susan Page and David Brooks.

And Bruce Morton has the last word on a dark year and the extraordinary event that touched the world.

Welcome back to the second hour of LATE EDITION. We'll get to our conversation with the Reverends Jesse Jackson and Jerry Falwell in just a moment.

But first, here's Gene Randall with the hour's top stories.

(NEWS BREAK)

BLITZER: President-elect George W. Bush says one of his top priorities is to unite the country. Joining us now to talk about his efforts are two men who often have very different perspectives. In Chicago, the Reverend Jesse Jackson. He's the founder of the Rainbow PUSH Coalition. And in Lynchburg, Virginia, the Reverend Jerry Falwell. He's the chancellor of Liberty University.

Gentlemen, good to have both of you on LATE EDITION. Merry Christmas to both of you.

And let me begin with you, Reverend Jackson. I know that the issue of John Ashcroft becoming the next attorney general is a sensitive issue for many in the African-American community. I want to quote to you what Julian Bond of the NAACP, a board chairman, said only on Friday. He said, "Any pretense of unifying the nation has ended with this nomination. This confirms the correctness of blacks voting nine to one against Governor Bush."

Do you support what Julian Bond says?

JACKSON: Absolutely. It's not just blacks, I might add. There is a case of a very able jurist, Ronnie White, on the state Supreme Court of Missouri, that he vilified and defamed this man to keep him from becoming a federal judge, calling him a pro-criminal judge. It's so shameful The New York Times editorialized against it.

He takes the position against women's right to choose in the case of incest and rape, a fairly extreme position; against worker's right to organize; against affirmative action. He is a very real threat to the years of civil rights and social justice progress in our country.

BLITZER: So, are you going to launch a fight against Ashcroft's confirmation?

JACKSON: I'm convinced that there will be a body of workers and women and historic minorities who will resist this appointment. Because in some sense, the attorney general sets the moral tone for the country. And so if he takes the position that he wants to make affirmative action illegal, and take away a woman's right to set the termination, and workers' rights to organize, against class-action lawsuits -- he threatens a broad base of the American people who have an interest in the government of inclusion and not one of exclusion. You add that to a Supreme Court that has now lost some of its moral standing -- this is a real threat to social justice.

BLITZER: I want to bring in the Reverend Falwell in a second. But let me just nail down this final point on John Ashcroft.

BLITZER: You are going to have an uphill struggle. You heard a liberal Democratic senator like Paul Wellstone say on this program just a few minutes ago that he is inclined to give John Ashcroft, a fellow senator, the benefit of the doubt, and recognize that every president is entitled to have someone in key cabinet positions with whom that president is comfortable.

JACKSON: He also said he wanted to hear the hearings and hear the evidence. I mean, how did this man defame Justice Ronnie White? Or why would he be against the law of affirmative action for women and people of color? Why would he stand against women's right to choose in case of incest and rape? So he will face that test, but it will be uphill battle.

After all this is a president who did not win the majority of the vote. It's now evident what happened to the votes in Florida. That's very painful to all of us. I just hope that Mr. Bush will be true to his own sense of the need to unify.

What can unify us? For example, a commitment to federal hate crimes legislation; commitment to campaign finance reform, we take the money out of politics; a commitment to election law reform; a commitment to defend all of America's children. Let's choose three or four things that really transcend race, region and politics.

BLITZER: Reverend Falwell, I take it you have very different perspective on John Ashcroft. You know this senator quite well and the criticism that he is now facing. Is that fair?

FALWELL: Absolutely not. I predict he'll get more than 70 votes in the Senate. And the reason is, he is such a royal gentleman. We all saw what he did in Missouri, in the recent election, conceding although there were many who urged him to do otherwise. He is that kind of a noble and humble gentleman.

He happens to be pro-life. So is Pope John Paul II, so is Billy Graham, so are millions of Americans. And that doesn't make them bigots or in any way against the rights of women. He happens to be a very strong Christian.

As a matter of fact, he preaches quite regularly, just like Reverend Jackson and I do. He preached in my pulpit. He's a gospel singer. Out in Missouri, he is an Assembly of God leader and the Baptists and the Methodists and the Presbyterians and the Catholics and the Pentecostals all love John Ashcroft.

When I think of going from Janet Reno to John Ashcroft, I think of moving from utter darkness to brilliant light. And he is just a wonderful, wonderful nominee.

BLITZER: Reverend Falwell, the New York Times editorial page does not agree with you. I want to read to you from the...

FALWELL: I would hope not.

BLITZER: ... from Saturday's New York Times editorial. It says this:

"Mr. Ashcroft's hard line ideology and extreme views on -- and actions on issues like abortion and civil rights require a searching examination at his confirmation hearing. The Senate is duty-bound to determine whether he will be able to surmount his cramped social agenda to act as the guardian of the nation's constitutional values."

The New York Times in Saturday's editorial. You say 70 votes. You think that there are going to be 70 votes in favor of John Ashcroft.

FALWELL: I think he will get at least 70. You know, if I were a U.S. senator and I read that in the New York Times, I would vote for him. It's -- the New York Times is hardly a barometer of middle America. And I would predict at least 70 votes.

I can name a few he will not get. There are others, I'm not sure he will get. But I think I can think of 70, maybe one or two, who will vote for him, mainly because he has earned his stripes. And he will do nothing but bring dignity back to the office.

Something else he will do -- the FBI who is -- the FBI is such a wonderful organization, has been for all these years, and suddenly they have in the last eight years been defamed, denigrated, compromised, and the director's been ignored by the attorney general. You're going to see the FBI restored to real dignity and acclaim, as they should be, under this attorney general.

BLITZER: Reverend Jackson, I see you're anxious to say something.

JACKSON: Wolf, I grew up in Greenville, South Carolina, with Bob Jones headquarters, a school that kind of propelled race-based, anti- Semitic ideology. Mr. Ashcroft received an honorary doctorate from that school without making any mention of continued practices of race discrimination at that school even now. They are now -- will only do inter-racial dating, even now, if in fact there is parental consent.

JACKSON: This has been its history. And of course, they give him all A's.

There is no evidence in his background of a commitment to equal opportunity and equal protection under the law for all Americans. And it's not about blacks only. It's about workers' right to organize versus the harsh penalties of workers from organizers, about women's equal pay. It's a broad range of social issues, and that is why The New York Times takes that view, and I support their view.

BLITZER: I want to move on to some other issues, but let me give Reverend Falwell the last word on John Ashcroft since the Reverend Jackson had the first word on the subject.

FALWELL: Bob Jones University has given honorary, as has Liberty and most schools, to many Democrats and Republicans. And to say this is something negative to John Ashcroft, being given an honorary degree by any school, is not fair.

Likewise, John Ashcroft, as he told President-elect Bush on the day of his nomination -- public announcement of his nomination -- he said, "I will do what integrity demands." And if this president ever asked him to do something, unlike the person sitting there now, to do something that is not right, he would resign before he would do it.

BLITZER: All right, Reverend Jackson, I want to look back at the Florida recount. At the time you were quoted, and I want to make sure that this is an accurate quote. I'll read to you what the newspapers quoted you as saying: "If George Bush wins, it will be by Nazi tactics." Was that an accurate quote of what you said?

JACKSON: Well, there certainly were Gestapo tactics. We were in West Palm Beach, Florida, on the day after the election, where Holocaust and Haitian survivors appealed to us: "Please fight for our vote because we punched two for Gore and we got Buchanan."

And as we gathered downtown with the Rabbi Jacobs and Reverend Masters (ph) holding hands, there burst in a hundred people threatening us from Miami and hurling obscenities as they sought to pray. And as these women and men start to make their case, they're hurled more obscenities. That time was dismissed lightly. That was Nazi-, fascist-like, breaking up a non-violent demonstration.

But in Florida two weeks later, the same group we now know was a paid group, some of Tom DeLay's staff members and Trent Lott's staff members. They broke up the count of a democratic election. Those were violent, Gestapo-like tactics, beneath the dignity of democratic protests.

BLITZER: President Bush, earlier today, was on ABC's "This Week," Reverend Falwell, and he was asked about that comment of the Reverend Jesse Jackson. I want you to listen to what he said to Sam Donaldson on "This Week," earlier today, in connection with that quote from Jesse Jackson.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Jackson, a man that I worked with when I was president and had a reasonably pleasant personal relationship with, went too far. And I -- leave out the policy aspects, I was deeply offended about the attacks.

(END VIDEO CLIP)

BLITZER: Reverend Falwell, you heard Jesse Jackson explain why he said what he said. And I know you have a close friendly relationship with Reverend Jackson. Give us your reaction to that.

FALWELL: Well, Jesse is like Jerry Falwell. Once in a while, he gets his mouth in gear before his mind is working, and I do the same thing. I don't think he really meant that, although he says he did, nor do I believe he meant it when he likened Mr. George W. Bush to Milosevic.

I think that losing is hard. You know, George W. Bush is the president-elect. He is our 43rd president. And had Mr. Gore been elected, it would have been equally as hard for me to swallow and say "President Gore." I would have done it.

But, unlike Barbra Streisand and Paul Begala and a few others, I never agreed to leave the country. However, if they wish to, I will pay their fare.

JACKSON: Wolf, I want to make it one more time. When we were in Miami when Haitian survivors who couldn't speak English well could not get support and they were turned away and they were hurt, these are Haitian and Jewish-Americans came to ask us to stand with them in West Palm, so we announced a non-violent demonstration downtown -- indeed, a prayer vigil. As we sought Rabbi Jacobs and the Reverend Masters (ph) to pray. There were 100 people who had been driven in, who hurled things and cursed while the rabbis and ministers prayed.

JACKSON: They physically broke up a nonviolent demonstration...

(CROSSTALK)

FALWELL: Jesse, George W. Bush had nothing to do with that.

(CROSSTALK)

JACKSON: ... a nonviolent demonstration with these violent tactics in West Palm as well as in -- as well as in Miami. To break up a nonviolent prayer vigil is Gestapo-like. It is un-American. It is not right.

FALWELL: But you know, Jesse, in your heart, as I know in mine, George W. Bush would never intentionally, knowingly, do anything like that. And when you called him the other day -- I was talking to Karl Rove, who's his senior adviser, and Karl said you had just called. I said, "Did the president-elect take the call?" He said, "Yes, he did, and they had an amicable conversation."

There would be -- I suspect if I had said something like that about Al Gore and then called him, had he won, I doubt he would have taken my call...

(CROSSTALK)

JACKSON: ... I never said George Bush was Gestapo or Nazi-like. I'm saying those demonstrators...

FALWELL: Well, they kind of blended together there.

JACKSON: No, no. Those demonstrators in West Palm -- and we saw them on TV. We now found they were paid hands from Tom DeLay and Trent Lott's staff to break up the Democratic count. Now what do you call that, Reverend Jerry?

FALWELL: Well, Jesse -- well, Jesse, you had a few paid hands down there, too, and it got out of hand. And you know that Mr. Gore said, "Break it up...

(CROSSTALK)

JACKSON: There's no evidence that those (inaudible) were nothing but nonviolent. Not on one, not on one occasion.

BLITZER: All right, gentlemen, we have to take a quick break. I want to pick up all of that, including Reverend Jackson's phone call with President-elect Bush. But let's take quick break.

When we return, we'll also take your phone calls for the Reverends Jesse Jackson and Jerry Falwell.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We are continuing our conversation with the Reverend Jesse Jackson, he joins us from Chicago, and Reverend Jerry Falwell, who's in Lynchburg, Virginia.

Reverend Jackson, Reverend Falwell makes a pretty good point. When you called President-elect Bush, he took your phone call. That was a pretty gracious move on his part, wasn't it, given some of the things you said over the course of the campaign?

JACKSON: Well, the fact is, he did the right thing by reaching out the night before. I did the right thing by reaching out the next day, because you have to work in some ways to build bridges. Let the record show that George W. Bush got the fewest votes nationally. He lost the African-American vote 9 to 1.

FALWELL: He got more than Bill Clinton got, Jesse.

JACKSON: And the evidence is that he lost the vote in Florida. So he does, in many ways, have an uphill battle from a Democratic point of view. But I recognize that the nation's business must go on. So there must be some reasonable dialogue to try to find common ground. So we talked about that for a moment.

What would be common ground? How do you address these ills? Well, can we find common ground on federal hate crimes legislation? Can we invest some of our surplus in wiping out poverty? We find common ground on that. What about campaign finance reform, election law reform? Let's find big themes that all Americans can rally around. So it was a good conversation.

BLITZER: Reverend Falwell, you were quoted in The New York Times on December 15 as saying this -- and I want to read to you what you were quoted as saying. Let me know if this was an accurate quote as well.

Quote, "The worst thing Mr. Bush could do is to bring Democrats into his administration or reach out to Governor Whitman or Governor Ridge for key positions when these people do not believe what his constituency believes or what he believes."

FALWELL: That's a correct quote, but all the quote isn't there.

I said I have no problem with President-elect Bush selecting Democrats or Republicans for his team unless they do not consistently support what he represent, namely, bringing down taxes, rebuilding the military, strengthening America's families and the pro-family, pro- life perspective. I have no problem with Governor Whitman being at EPA. I would have a problem with her at HHS or as the attorney general.

BLITZER: Reverend Jackson, some people are pointing out that it took George W. Bush, the incoming president, the president-elect, to announce that the first-ever U.S. secretary of state, who is an African-American, Colin Powell, is going to get that job. Does he deserve credit for bringing African-Americans, Hispanic-Americans, women into this incoming administration?

JACKSON: The diversity is a good thing. Reaching out to General Colin Powell, of course was a smart thing to do. He has foreign policy experience. George W. Bush has been out of America, I understand, four times: twice to Mexico, once to Canada, once to China. So he does not have much foreign policy experience. To have Mr. Powell and Mr. Cheney around him does help balance off some of that.

Diversity is a significant thing. But budget priorities have the most long range impact, as well as public policy. So we want -- I would like to see him take some of the surplus budget and invest it in -- since it's Christmas time, invest it in at-risk babies, invest it in the poor, invest it in job training, invest it in first class education and health care for all Americans. Whether they're in Appalachia or Mississippi, let's take some surplus and let's invest in Americans who are left out. That's the morally correct thing to do.

BLITZER: Reverend Falwell...

FALWELL: I think he'll do that.

BLITZER: Yes, Reverend Falwell, let me ask you about that. Obviously, his record as governor of Texas in six years, he sought to reach out to minorities. And of course, at the Republican convention in Philadelphia, there was an effort to reach out to minorities. Now in his Cabinet. Why do you think George W. Bush did as poorly in generating African-American support in the election as he did? Nine to one, African-Americans voted for Al Gore.

FALWELL: Because Mr. Gore's campaign did a very excellent job in illegally employing the African-American church. That is, actually Gore went to T.D. Jakes' church in Dallas, Jesse, Al Sharpton, both Clintons. Many surrogates of Mr. Gore went into the African-American church and actually told them not just to vote but to vote for Democratic candidates, and particularly Mr. Gore.

Now if we conservatives did that, that's illegal. But I have the scripts of many of those meetings so in case we ever hear from the FTC or the IRS, we'll say, "Well, now when you take the president, the vice president, et cetera, down, we'll go with you."

But the fact is, they did an excellent job of mobilizing and politicizing the African-American church. And I think they have that church really engrossed in a type of political slavery.

For example -- and I heard Dr. Woodson say this the other night on one of the networks, a black minister who's working in inner city New York and Washington and Philadelphia, and that is this: that we need -- we need vouchers, we need to educate -- unless we get all the inner cities educated, the children, with higher education and quality education, beginning with vouchers where parents take control of their children and place them in schools where they can learn something, we're never going to solve the problems and break down the wall, the barrier, that is so obvious...

(CROSSTALK)

JACKSON: ... the integrity of African-American churches to in some sense to attack Reverend Jakes and other ministers this way is really extreme and radical. And of course, it is...

(CROSSTALK)

FALWELL: Well, did Al go there? Did Al Gore go there, Jesse?

JACKSON: Of course -- of course he went there.

FALWELL: Yes, he went there, and asked for their vote. And that's illegal. That's no more legal than the Buddhist temple.

JACKSON: Of course he asked their vote...

(CROSSTALK)

JACKSON: ... but you organized the Christian Coalition to go for those...

(CROSSTALK)

FALWELL: I had nothing to do with the Christian Coalition. That's Pat Robertson. I'm Jerry Falwell.

JACKSON: Well, my point is that the African-American church is the base of our getting the right to vote in the first place. And it is (inaudible) the right for ministers to seek a public policy.

You know this is Christmas time. Do we have an emphasis on defending the at-risk babies or giving a tax break back to the shepherds? That's the Roman government's point of view. We chose to put more emphasis on at-risk babies, and in fact...

(CROSSTALK)

FALWELL: We want tax breaks for everybody, and that means we leave out no one, no one at the top or the bottom. And I believe that George W. Bush is going to be a man who brings us all together. And, Jesse, it will be so great that you'll finally buy that meal for me that you promised the night before the election.

(CROSSTALK)

JACKSON: ... some good information.

BLITZER: Reverend Jackson, Reverend Falwell, stand by. We have to take another quick break. We can talk a little bit more about all of this when we return. We'll also be taking some more phone calls for the Reverend Jesse Jackson and Jerry Falwell. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking with Jesse Jackson and Jerry Falwell.

And I want to begin with you, Reverend Falwell. We only have a few minutes left. Bill Clinton and his legacy is leaving office in a few weeks. He was interviewed in today's New York Times. He said this -- I thought it was an interesting quote from him. Let me read to you what he said.

"The price I paid for my personal mistake" -- referring to the Monica Lewinsky matter -- "was, believe it or not, more than anything else, a profound personal price. I'm glad that my life is happy and in good shape, and I'm glad my country is still in good shape. But that whole episode was fundamentally a political move. It was not rooted in any established principles of Constitution or law or precedent" -- the entire impeachment process.

It's interesting -- the latest Wall Street Journal-NBC News poll has him, right now, his job approval rating at 66 percent. In perspective, that's higher than Ronald Reagan's was at the end of his second term. It's higher than President Eisenhower's was at the end of his second term. What is the legacy of Bill Clinton as he leaves office, Reverend Falwell?

FALWELL: One word: scandal. And the worst was not Monica Lewinsky. Giving away our nuclear secrets to the Chinese for campaign funds would be treason in any other generation. And he has literally done so much damage in the federal courts that, in my lifetime, it will not be corrected.

I'm glad that we are getting off to another start and, perhaps, during the next four to eight years, Mr. Bush can appoint three, four Supreme Court justices and maybe a few hundred federal judges below that level who can maybe bring back a strict, constructionist approach to interpreting law and a good pro-family, pro-life perspective.

BLITZER: Reverend Jackson, you ministered to Bill Clinton during those trying days. You have the final word: the Clinton legacy as you look forward?

JACKSON: Well, you know, we all have sinned, come short of the will of God, all of us have. But we live in our faith. We live under the law. How should you judge him by his public policy? America's better off eight years later. More Americans are working. We've gone from deficit to surplus...

BLITZER: We just, unfortunately, had a technical problem. We lost Reverend Jackson. We apologize to him. We wish him a Merry Christmas.

Reverend Falwell, hopefully we didn't lose you.

FALWELL: No, I'm right here.

BLITZER: We want to wish you a Merry Christmas and a Happy New Year as well.

Our satellite obviously went down.

Thanks to both of you for joining us on this Christmas Eve LATE EDITION.

And up next, the transition of power: Is President-elect George W. Bush scoring high marks with his Cabinet picks? We'll go around the table with Roberts, Page, and Brooks when LATE EDITION continues.

(COMMERCIAL BREAK)

BLITZER: Time now for our LATE EDITION roundtable. Joining me: Susan Page, Washington bureau chief for USA Today; Steve Roberts, contribution editor for U.S. News and World Report; and David Brooks, senior editor for The Weekly Standard.

You know, Steve, President Bush, you know, the elder, was on ABC earlier today. Sam Donaldson interviewed him. He was asked about this new "Bush the Son" Cabinet looking very much like the Bush original Cabinet. Listen to what President Bush had to say.

(BEGIN VIDEO CLIP)

GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: When they look at the totality of George's Cabinet, they'll see new faces, and they'll see some very experienced people, which, Sam, will send a very calming message not only in this country but around the world.

(END VIDEO CLIP)

BLITZER: Are you calm, Steve Roberts?

STEVEN ROBERTS, EDITOR, U.S. NEWS AND WORLD REPORT: Yes, I think it is a calming message, but that's not...

(COMMERCIAL BREAK)

BLITZER: We had a technical problem. We are back now.

Steve Roberts, we are talking about the calming influence of this new Bush cabinet as a result of some familiar faces, obviously, being recalled.

ROBERTS: Well, as I was saying that President Bush really can't mean this as a compliment to his own son, because his son is very inexperienced in foreign policy, very inexperienced in economic policy. And I think it's important to have some people around him who have actually been there, who have done these jobs, Colin Powell, Dick Cheney, people like that.

Secretary of the Treasury Paul O'Neill: very experienced guy. And he needs that kind of reinforcement, because if people are looking at George Bush the Younger, by himself, that's not going to produce a lot of calm. That can cause anxiety in a lot of people.

BLITZER: David, how is this new transition -- this transition to this new cabinet emerging? Any hiccups? Any problems do you foresee?

DAVID BROOKS, EDITOR, THE WEEKLY STANDARD: Smooth as silk. This is so business-like it's not only calming, it's narcoleptic. I mean, there's no Bill Bennett in this cabinet, there's no Bob Reich in this cabinet, nobody who's a good interview for us journalists. We all got to be wearing black for the next four days.

These are extremely organized, Junior-Achievement-type people, and one of the things that indicates what Bush likes: executive ability. There's the most corporate administration we have ever had, you know, the people who own America are going to get to run it for the four years.

And the second, the idea that he is delegator-in-chief. He says, "OK, I have got four things I'm going to do. Go off and do it. Come back, I'll be done running and tell me how you did it."

BLITZER: You know, and he's bringing a lot of governors into his new administration. The John Ashcroft, a former governor of Missouri, now the senator who was defeated in his bid for reelection. Do you think that's seriously -- you heard Jesse Jackson a few minutes ago suggest that there could be some confirmation problems, although Jerry Falwell thinks more than 70 senators will probably vote in the end to confirm him.

SUSAN PAGE, WASHINGTON BUREAU CHIEF, USA TODAY: Well, if Paul Wellstone is going to give him a fair shake and vote to confirm, it's hard to see where his opposition comes from in the Senate. And of course, there's a long history of this Senate being pretty favorably inclined to people who have been members of that body.

You know, John Ashcroft is a good example of watching out what you wish for. If he had not lost his Senate race last month, he'd be in a state with a Democratic governor. He probably wouldn't be eligible politically to be nominated for this job. And the fact that he conceded graciously that night has really smoothed his way with some Democratic senators.

Although, I think it is true that the Democratic Party is not happy. And this is no -- John Ashcroft is not to the attorney general's slot what Colin Powell is to secretary of State, a person who is broadly acceptable to the other side.

BLITZER: Senator Ashcroft did concede. He could have called for a recount in Missouri. Didn't do that. Do you seriously think there's going to be some confirmation snags on his front?

ROBERTS: No, I don't. I think he did himself a lot of good with the very gracious and generous way in which he did concede, particularly given the fact that Florida went on for 36 days. We had an object lesson of how not to do it. And Ashcroft did it with great grace.

He is an extremely conservative, rigid guy. And -- but look, this is the base of the Republican Party. You know, anybody who thought that all of George Bush's Cabinet members were going to be like Christie Whitman are just wrong. David said on this program three weeks ago that attorney general was the litmus test for the conservatives. I think you were right then. You proved to be right.

But I do think certain things will come out against Ashcroft, particularly his vendetta against Justice Ronnie White. This is a guy -- a black justice of the Missouri State -- I think, maybe...

(CROSSTALK)

ROBERTS: ... Missouri Supreme Court. Ashcroft just destroyed this man without evidence.

BLITZER: But Steve, there were -- there were more than 50 members of the U.S. Senate who voted against that confirmation. It wasn't just Ashcroft.

(CROSSTALK)

BROOKS: Yes, Steve, you say rigid; I'd say principled. I mean, the guy has incredible integrity. He's written a book about his relationship with God, his relationship with his family.

BLITZER: You're talking about Ashcroft.

BROOKS: Ashcroft, a man of high principle. And this is actually going to be good. All of the people who are whooping and hollering about how right-wing the guy is, there's going to come a time in this administration where there's going to be a scandal. And it's going to be up to the attorney general to appoint a prosecutor, not an independent prosecutor, because that law is gone. And Ashcroft is going to be very moral about it, very independent about it because of his conscience and the way he hews to it.

BLITZER: You know, the other appointment that we were expecting this week but didn't happen yet is Tommy Thompson, the governor of Wisconsin, who is apparently in line to become the secretary of Health and Human Services. It sounds like it's a done deal. Very, very anti-abortion rights. Obviously made a reputation on welfare reform. Is that going to be a controversial appointment if, in fact, Tommy Thompson gets that slot?

PAGE: Well, not among Republicans who, you know, won the White House and the rights to name the administration. And I think you've seen with George Bush that in the positions that matter to conservatives, he's naming conservatives to those jobs. He named a moderate governor, Christine Todd Whitman, to a job where her moderate social views are irrelevant as head of the EPA.

So he's managing to put together an administration that looks pretty moderate, but it seems to me has a very conservative heart.

ROBERTS: Well, you've got to remember that a lot of this doesn't necessarily have to -- a lot of this questioning of Ashcroft or Thompson is not aimed at defeating them because neither one is going to come close to being defeated.

ROBERTS: It's aimed at several ways. The interest groups who care about these issues, they lay down markers about where their points of view are. And in these hearings, Ashcroft will be asked about a lot of things. And part of the attempt the Democratic senators will be to get him on the record saying things that maybe are not quite as conservative as he had said in the past so that they can use this as leverage.

The hearings are very important beginning of an ongoing relationship between the Senate and the Cabinet member.

BLITZER: David, step back. The appointments that have been made so far, the names that have officially been announced, what does all this say about George W. Bush as the incoming president.

BROOKS: Pragmatism. The man is not an idealogue. Most of these people are administrators, whether they're Republican administrators or private administrators, they are executives, they are process- oriented people. They are not sort of Reaganites. For the most part, they're not people who go off the reservation. They are people who follow orders and who play team ball. That's why it's going to be so darn boring for all of us.

(LAUGHTER)

There's to be so little leaking, so little in-fighting, it's just going to Bush Team or Team Cheney.

BLITZER: Let's hope you're totally wrong and all those leaking...

(LAUGHTER)

... and the boring as we need excitement, we need leaks.

We're going to take a quick break. We'll have much more of our roundtable when LATE EDITION returns.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our LATE EDITION roundtable.

Susan, all right, let's take a look at -- you know, this is the season for stuffing stockings. Some people get a holiday gift. Some people get a lump of coal. Let's be generous and give some gifts out to various individuals. Who would you give a gift to?

PAGE: You know, without much fanfare, four women -- four new women were elected to the U.S. Senate last month, bringing the total to 13, still not 50 percent or anything close to it, but a record number. The nine women who are already in the Senate have been able to cooperate on issues that they agree on and agree to disagree in a tolerable way on issues they disagree about. And I wonder if that could provide a kind of model for bipartisanship when we get to this new 50-50 Senate and evenly divided government.

BLITZER: I'm always in favor of more women in the Senate, and nobody can complain about that.

Do you have any gifts you want to give out, Steve?

ROBERTS: Well, in the same vein, I think that one of the gifts that George Bush needs is a big ear. He needs to listen to a lot of diversity.

You know, I think about Colin Powell, and I'm reminded Jack Kemp used to say that, because he was a pro football player, he used to take showers with the kind of people most Republicans never met. And I think that Colin Powell grew up with the kinds of people most Republicans never met in the South Bronx. He's going to have a lot to do in foreign policy. But I hope George Bush also listens to him on domestic policy, too. Because he brings a perspective that he's not going to hear from those corporate executives that David was talking about.

BLITZER: David, have you got any gifts?

BROOKS: I should give them a big shower stall in the White House.

(LAUGHTER)

I'm going to give Senator Daniel Patrick Moynihan a collection of his own books. Because here's a senator who writes books, who reads books, a really interesting guy, outgoing, last of a dying breed of really interesting people -- now we have all the senators who are sort of blow-dry hair, and we have the corporate executives in the White House. So you've got to appreciate guys like Moynihan.

BLITZER: And he never got $8 million for an advance on any of those books, I believe.

ROBERTS: Not all his books combined came close to $8 million.

BLITZER: Nothing wrong with $8 million.

Our lumps of coal -- any lumps of coal out there?

PAGE: I'd say a lump of coal to the shocking news that what we saw happen in Florida isn't unusual, it happens all across the country: antiquated voting machines, votes thrown out because the system of voting doesn't make sense.

This isn't building Star Wars; this is something we ought to fix.

BLITZER: In this day and age to have those kinds of voting equipment, it is worthy of a lump of coal.

ROBERTS: A lump of coal to Ralph Nader and all of his supporters. They were told repeatedly that they could cost Al Gore the election. It was an ego trip from the word go. In fact, in many ways they did cost him the election, certainly in Florida, where almost 100,000 people voted for Nader. And they're going to have to live with it. They're going to have live with all the policies of all of these corporate executives that David's talking about who Ralph Nader has sworn his life to oppose. And now he's going to have to deal with them, and it's his own darn fault.

BLITZER: Lump of coal?

BROOKS: Eight million lumps of coal to Hillary.

(LAUGHTER)

You know, she shouldn't have signed this book deal. It's OK if she signs a $2 million book deal. I'm sure you could make back $2 million. People want to read in her effervescent prose style about health care reform -- something.

(LAUGHTER)

But $8 million means she's got to do a full Jerry Springer, reveal everything about her administration, herself, private life. She gets the lumps of coal.

BLITZER: Do you think the publisher is not going to make back the $8 million?

BROOKS: He's got to sell two million copies in hard cover. That's just a huge...

(CROSSTALK)

BLITZER: Forgive me for asking, but is that just domestic? What about world rights?

BROOKS: That is not including world rights. But it's still -- $8 million is just a huge, huge, huge advance.

ROBERTS: And you should remember, what she did would be illegal under the rules of the House of Representatives. It's only legal in the Senate where Moynihan and others have written books and have been an important part of their income, so they allow this kind of deal. But under the rules of the House of Representatives, this would be banned.

BLITZER: But there's no indication that she's going not take the money rights?

PAGE: I believe she's going to take the money. And I believe that we'll probably all be four people who will buy the book.

BLITZER: And it doesn't look like what happened with Newt Gingrich, when he had to eventually give back the advance, that there's any momentum out there.

David, is there any momentum against her on this deal?

BROOKS: It's the role of the Clintons of the universe to lower the standards not only of the White House but the entire Democratic Party. So Dave Bonior and all these people who were upset about Newt Gingrich's book deal, suddenly mum's the word.

BLITZER: David Brooks, unfortunately, Steve Roberts, Susan Page, we have to leave it right there.

Merry Christmas, Happy New Year, Happy Hanukkah to all of our roundtable.

Just ahead: Bruce Morton's "Last Word."

(BEGIN VIDEO CLIP)

FRANK BORMAN, APOLLO 8 MISSION COMMANDER: And from the crew of Apollo 8, we close with good night, good luck, a Merry Christmas, and God bless all of you.

(END VIDEO CLIP)

BLITZER: Bruce remembers a ray of light in a dark year.

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's last word on a turbulent year that was touched by a special moment.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The high court went political, some say. The system failed; the people have lost faith. It's been a bad year. And you can't argue that, of course. Look around. Civil war in the Middle East, a tattered peace in Northern Ireland, much of sub-Saharan Africa ravaged by AIDS.

Well, maybe we have seen more than our fair annual share of pain, but there is always some. The worst share I remember was 1968. Martin Luther King murdered, Robert Kennedy murdered, American cities burning bright, the fires fueled by race. Police clubbing and beating young people at the Democratic Convention in Chicago, whose crime was opposition for the Vietnam War. And the war itself, a giant killing machine whose end was not in sight.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Three, two, one, zero.

(SHUTTLE LAUNCHED)

(END VIDEO CLIP)

MORTON (voice-over): But something else happened that dark year, happened at Christmas time. Apollo 8, one of the flights which preceded Apollo 11's landing on the moon, Apollo 8 became the first manned spacecraft to fly around the moon, as it happened during Christmas week.

And its astronauts saw, for the first time ever -- and so did we all, thanks to their television cameras -- saw from a quarter of a million miles away the small blue and white planet which held the hopes and fears and dreams of all of us. They saw not sunrise but earthrise from out there by the moon. And Frank Borman, the mission commander read some old words.

(BEGIN AUDIO CLIP)

FRANK BORMAN, APOLLO 8 MISSION COMMANDER: In the beginning, God created the heaven and the earth. And the earth was without form and void, and darkness was upon the face of the deep. And the spirit of God moved upon the face of the waters, and God said, "Let there be light," and there was light.

(END AUDIO CLIP)

MORTON: And we watched and listened, and for a short while, magic replaced the awful memories of that year.

Borman ended this way:

(BEGIN AUDIO CLIP)

BORMAN: And from the crew of Apollo 8, we close with good night, good luck, a Merry Christmas, and God bless all of you, all of you on the good Earth.

(END AUDIO CLIP)

MORTON: And so say all of us.

I'm Bruce Morton.

BLITZER: Thanks, Bruce.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. This note: The major news magazines published double editions last week, so there are no new ones being released today. That means they can all take a little vacation, a few days off for the holiday spirit.

And that's your LATE EDITION for Sunday, December 24.

Be sure to join us again next Sunday for a special look back at the year 2000 with our annual year in review. Among our guests: Party chairmen Ed Rendell and Nicholson; Congressmen Charlie Rangel and David Dreier; and former Secretary of State Larry Eagleburger; and former Congressman Lee Hamilton.

And please join me on January 1 when my new show, "Wolf Blitzer Reports," returns to CNN, weeknights, 8:00 p.m. Eastern.

Until then, thanks very much for watching. Merry Christmas, Happy Hanukkah, Happy New Year.

I'm Wolf Blitzer in Washington.

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