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Inside Politics

Elizabeth Dole Jumps on Bush Bandwagon; President Clinton Re- Invests in Alan Greenspan; Bradley Seeks Tax Advantage Over Gore in New Hampshire

Aired January 4, 2000 - 5:00 p.m. ET



ELIZABETH DOLE (R), FORMER PRESIDENTIAL CANDIDATE: Governor George Bush, the next president of the United States. Thank you very much.


BERNARD SHAW, CNN ANCHOR: Now that Elizabeth Dole is on the Bush bandwagon, can she help him where he needs it most -- against John McCain in New Hampshire?


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The establishment will be with Governor Bush, and anyone who wants the status quo certainly doesn't want to support John McCain.


SHAW: We'll tell you how McCain is playing to anti-establishment sentiment in the Granite State today.

Plus, Bill Bradley seeks a tax advantage over Al Gore in the lead-off primary state.



WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I have been thinking of taking public, then we can pay the debt off even before 2015.


SHAW: Thoughts on President Clinton's political investment in Alan Greenspan.

ANNOUNCER: From Washington, this is INSIDE POLITICS with Judy Woodruff and Bernard Shaw.

SHAW: Thanks for joining us. Judy is off today.

At the very least, Elizabeth Dole's endorsement gives George W. Bush something candidates covet: a headline that may grab some voters' attention, especially now that the primary season has moved into overdrive. But can she do more for him than that?

Well, CNN's Candy Crowley reports on the Bush-Dole announcement in New Hampshire, and whether it may make a difference.


CANDY CROWLEY, CNN CORRESPONDENT (voice over): She said...

DOLE: I support Governor Bush, not only because I think he can win, but because I know he can lead.

CROWLEY: He said...

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Elizabeth Dole is a leader in our country, and she is a leader in our party. She is admired and respected all across our country, and deservedly so.

Elizabeth, you have always said that you have been a lieutenant in Ronald Reagan's army. I am proud to have you a general in mine.

CROWLEY: They said it together in New Hampshire, where George Bush is in a Texas-sized tussle with John McCain.

For McCain, who endorsed Phil Gramm in '96, but later became one of Bob Dole's fiercest defenders, this has got to hurt. But McCain understands the game.

MCCAIN: I have always said that the establishment will be with Governor Bush, and anyone who wants the status quo certainly doesn't want to support John McCain.

CROWLEY: The endorsement of George W. Bush by Elizabeth Dole came along with the highest of Republican compliments, a comparison to the party icon.

DOLE: Twenty years ago, another governor rode out of the West, espousing a conservative philosophy that was as optimistic as it was inclusive. Ronald Reagan may have learned from the past, but he lived for the future. He made a career out of being underestimated.

CROWLEY: Despite her own failed presidential bid, Dole showed a talent for reaching beyond party regulars.

G.W. BUSH: Elizabeth Dole brought many new faces and new voices into our party, and the political process is better for it.

CROWLEY: The endorsement is a good hit for the Bush campaign. Dole is one of the GOP's most popular figures and it's most visible woman, but Bush polls well among women. His strategists believe she can be most helpful in New Hampshire among independent voters who are finding McCain so attractive.

Looking to stop McCain's movement, Bush aides say he will increasingly try to draw policy distinctions between himself and the senator. Perhaps of equal importance is the itinerary. In a state used to up-close and personal attention, Bush has been criticized for not being here enough -- not that he's sensitive about it.

G.W. BUSH: After saying hello to you all today, we are going to fly to Iowa, coming back tomorrow. I am going to be here on Thursday. I am going to go south for debate, and I'm coming back on Sunday. I'm coming back a lot, and I am really looking forward to it.

CROWLEY: It's unclear whether the popularity of one politician can rub off on another. But having an endorsement is better than not, and timing helps. Dole's endorsement comes four weeks before the New Hampshire primaries, just as voters are beginning to focus.

And in Iowa for the second half of the day, the Bush-Dole twosome became a threesome with the endorsement of Senator Charles Grassley, Iowa's most popular Republican. It is three weeks until the Iowa caucuses.

(on camera): With the high-profile Dole endorsement came the inevitable question: What about a Bush-Dole ticket? He said it was premature. She didn't say no.

Candy Crowley, CNN, Des Moines.


SHAW: Even before that Dole endorsement, Bush appeared to be gaining back some ground against McCain in New Hampshire. The latest American Research Group poll shows McCain three points ahead of Bush among likely GOP primary voters in New Hampshire. Now, McCain had been leading by nine points just two weeks ago.

McCain also is spending this day in New Hampshire, where he is planning to campaign for most of the next four weeks until the GOP primary there.

As CNN's Pat Neal reports, McCain sharpened his focus on an issue of interest to Internet fans and tax foes.


MCCAIN: It's only 26 days, four hours and 12 minutes before the polls close on February the 1st.

PAT NEAL, CNN CORRESPONDENT (voice over): The race is tight and the clock is ticking, but Senator John McCain thinks he has an edge on Governor George Bush, who has made tax cuts the sweeping centerpiece of his campaign.

MCCAIN: I am adamantly opposed to taxing the Internet. I am adamantly opposed to taxing the Internet. NEAL: New Hampshire is one of the most wired states in the country. Its economy has been helped by a boom in Internet jobs. McCain hopes to use that plus that, plus the state's famous aversion to taxes, to separate himself from Bush.

While Bush supports the current Congressional ban on Internet taxes, he hasn't decided, as McCain has, if it should be permanent. Many of his fellow GOP governors favor an Internet tax as an important source of revenue.

MCCAIN: You tax the Internet according to the sales-tax structure that is in place today, it would harm the Internet commerce by some 24 percent. I don't think we ought to tax the Internet. It is generate -- it is a prime generator of this economy.

NEAL: Bush says overall deep tax cuts are the key.

G.W. BUSH: We need tax cuts to remain prosperous, and to make sure that our economy continues to grow. We need tax cuts to make sure our system is fairer for everybody -- not just a few, but everybody.

NEAL: But McCain says that Bush's plan goes too far.

MCCAIN: Governor Bush's tax plan, 60 percent of the tax cuts are for the wealthiest 10 percent of America. I don't think that's necessary. I want the tax cuts for lower and middle-income Americans.

UNIDENTIFIED FEMALE: I would like to know what you're going to do to focus back on the family.

NEAL: After a holiday break, McCain continued his town-hall campaigning. So far, he's held more than 80 in New Hampshire. Aides believe this question-and-answer format is one reason the Senator is doing so well here.

UNIDENTIFIED MALE: I just want you to know that you just won yourself a vote, and I like that a candidate can actually answer a question without having...

NEAL: The latest New Hampshire poll show McCain still leading, but Bush has edged up. McCain says winning here isn't everything.

MCCAIN: And I think we have to do very, very well. If that means a close second, then I think that may be well enough.


NEAL: But privately, the campaign knows this is a make-it-or- break-it state for McCain, so much so the candidate plans to spend three out of the next four weeks campaigning here -- Bernie.

SHAW: Pat, that sounds like a full schedule. What does he have on tap for tomorrow?

NEAL: Well, Bernie, tomorrow McCain plans to stress citizenship. As you know, he spent years in the Navy. Tomorrow he plans to encourage Americans to not just to volunteer, but to serve something greater than their own self-interest -- Bernie.

SHAW: OK, Pat Neal in Bedford, thank you.

Now, let's talk about the GOP presidential race in New Hampshire, and the possible ramifications of Elizabeth Dole's endorsement of G.W. Bush.

We're joined from Manchester by Dick Bennett. He is the president of the American Research Group that conducted the New Hampshire poll we reported just a moment or two ago.

What does Mrs. Dole bring to the table for Bush?

DICK BENNETT, AMERICAN RESEARCH GROUP: Well, she brings some votes and support. She was seen as very favorably before the -- she got out of the campaign, and I think that Bush needs everything that he can get right now to really gel support among women, and I think that's going to help him quite a bit.

SHAW: How will she play with independent voters?

BENNETT: Well, I think independents like her. I think that she's seen as more moderate; that's helpful to Bush. And I think that women especially -- and there are a lot of women independents, and I think that she -- I think a lot of times we don't find endorsements help, but I think this time it may be helpful for Bush. He's -- this is just one of the tricks he's going to pull out of his hat.

SHAW: Among issues, which ones did she play very effectively with voters, Dick?

BENNETT: Well, she -- it was really herself. It was really her personality. The problem -- her campaign failed because she wasn't here very much, but they liked her. They liked the fact that she was a woman. They also liked the fact that she may be the first president. I think now they're going to like the fact she may be the first vice president. And I wouldn't discount that at all.

SHAW: And what are you hearing? That was going to be my next question.

BENNETT: Well, the excitement for her -- a year ago, essentially, she was leading in New Hampshire. And the excitement for her was because she was going to -- people thought this was going to be the first woman president. She had a legitimate shot at it. And she didn't campaign very well, but you know, she -- now they -- I think they think, well, maybe, OK, she didn't run a good campaign, but she could be vice president.

SHAW: Do you think she can be a firewall for Bush against McCain?

BENNETT: Well, George W. Bush is very strong among women. And anything to shore that up, to hold there, he -- Bush needs that. McCain needs to really to attack Bush and get women away from Bush. But with this, this just makes it even stronger.

SHAW: OK. Dick Bennett of the American Research Group, thanks very much.

BENNETT: Thank you.

SHAW: Quite welcome.

Now to another state where John McCain has made a big push, South Carolina. His campaign is launching a new TV ad today featuring South Carolina Congressman Lindsey Graham, known nationally for his role as one of the House prosecutors in President Clinton's impeachment trial.


REP. LINDSEY GRAHAM (R), SOUTH CAROLINA: John McCain will bring honor back to the Oval Office. He's the conservative who will stop Bill Clinton's betrayal of our military and say no to the big money special interests. Duty, honor, country, that's why I am supporting John McCain for president.


SHAW: Graham sounds a similar note about McCain's character as compared to President Clinton's in a one-minute radio spot that also debuts in South Carolina today.

And still ahead on INSIDE POLITICS, the Democrats in for the Granite State, with talk of taxes and a new endorsement.

Plus, Warren Beatty makes a decision about his political future.


SHAW: The Democratic presidential race in New Hampshire may be getting tighter, just like the Republican race. The American Research Group poll shows Bill Bradley with only a three-point lead over Vice President Gore. Two weeks ago, Bradley led Gore by 12 percentage points in the same poll.

Bradley reached out to voters with the popular issue of tax reform as he campaigned in the Granite State today, and as Patty Davis reports, rival Al Gore was not far behind.


PATTY DAVIS, CNN CORRESPONDENT (voice-over): The talk was politics and eggs, but Democratic presidential candidate Bill Bradley provided the meat. Bradley proposed $125 billion in budget savings over 10 years. His target: corporate America's tax loopholes and shelters.

BILL BRADLEY (D), PRESIDENTIAL CANDIDATE: I want to crack down on that so that corporations that are paying their fair share aren't penalized, because some have creative accountants that manage to reduce their tax burden. DAVIS: Bradley would step up audits and enforcement of current corporate tax laws. The rest of the savings would come from cutting subsidies to mining companies, oil and gas producers, and ranchers who graze their livestock on federal land.

BRADLEY: I also want to eliminate some special-interest tax breaks that have no business being in the tax code at all.

DAVIS: With this proposal, the Bradley campaign is hoping to mute criticisms from Vice President Al Gore about how Bradley would pay for his health care proposal without imperiling other programs. Gore also supports closing billions of dollars in tax loopholes, part of the Clinton administration's 2000 budget, and points out that Bradley as a New Jersey senator supported large loopholes for pharmaceutical companies.

As the campaign heats up going into the final weeks before the New Hampshire primary, Gore also brought his campaign to New Hampshire, speaking to a group of high school students.

The sniping continues between the two candidates as they run neck-in-neck in New Hampshire. Vice President Gore says Bradley's health-care plan is a budget buster and risks recession; Bradley counters with this.

BRADLEY: When you can't be positive about what you're going to do, you tend to be negative about what the other person's doing.


DAVIS: Now, both Bradley and Gore campaigned in separate New Hampshire cities today, but come tomorrow, they go head to head once again here in New Hampshire in their fourth Democratic debate -- Bernie.

SHAW: Patty, what can we expect from that debate?

DAVIS: Well, we can expect the two candidates to try to differentiate themselves from one another even more than they're doing so far on the campaign trail. It's very important with just a few weeks left before the New Hampshire primary and before the Iowa caucus, they want voters to know exactly what they stand for -- Bernie.

SHAW: Patty Davis, Bedford, New Hampshire, thank you.

Vice President Gore will head into the New Hampshire primary with a key endorsement. Tomorrow, Senator Edward Kennedy of Massachusetts is expected to announce his support of Gore's White House bid. Kennedy has only twice endorsed Democratic candidates during the primary season. Both were from Massachusetts, Michael Dukakis and Paul Tsongas. Kennedy is to make his announcement on support during a joint appearance with Gore in Boston tomorrow.

After entertaining the possibility of a bid for the Democratic nomination, actor Warren Beatty seems to have ruled out making the race. In an interview with "Vanity Fair," Beatty says he is "not running now." Beatty did not rule out a future White House bid. He would not endorse either of the Democratic candidates.

A familiar name will appear on the presidential primary ballot in California. John Anderson, an independent candidate in the 1980 presidential election, will be listed as a candidate for the Reform Party nomination. A spokesman for the secretary of state says the Reform Party leadership called and requested Anderson's name on the ballot. The 77-year-old Anderson has not indicated whether he wants to be a candidate, but he did not ask to have his name removed.

Up next, Bob Novak has questions about the first lady and a holiday event. We'll see whether or not Bill Press agrees.


SHAW: The Sierra Club is criticizing the environmental record of Texas in a new ad running in New Hampshire. The latest spot from the environmental group takes aim at GOP hopeful George W. Bush, claiming a lack of action in his home state.


UNIDENTIFIED NARRATOR: Even though Texas has over 400,000 kids with asthma, like William Tinker, Governor George Bush has proposed weakening the Clean Air Act. Call George Bush. Tell him to clean up Texas's air and water, for our families and for William Tinker's future.


SHAW: The ad begins airing tomorrow, and it will run through the week, possibly longer. The Sierra Club says it is spending tens of thousands of dollars on this ad.

Joining us now to talk more about the presidential race and other political matters, Bob Novak of the "Chicago Sun-Times" and Bill Press of CNN's "Crossfire."

Elizabeth Dole endorsing the governor of Texas -- what does it mean?

ROBERT NOVAK, "CHICAGO SUN-TIMES": That's a big plus for Governor Bush, Bernie. She has a constituency of women, and women who don't usually vote in Republican primaries. And whether she takes all of them and brings them to George Bush is another matter, but I think it also shows that there is in the Republican Party among regular Republicans -- and she is a regular Republican -- a hostility to John McCain. And if the race gets to be a Bush versus McCain race, you're going to find a lot of people, like Lamar Alexander and Elizabeth dole, who may not have been great Bush fans in the beginning, saying they'd rather have Bush than McCain.

SHAW: Bill, your read on this.

BILL PRESS, CO-HOST, "CROSSFIRE": Well, I hate to disagree with my good friend Bob Novak so early.

NOVAK: I'll Bet you do.


SHAW: Here we go in the New Year. But I don't think any of these endorsements amount to a hell of a lot, to tell the truth. It's better to have them than not them, but I don't think she brings a lot to George W. Bush, Bernie.

And you know, in the end, I wouldn't be surprised, and I admit up front, I do not have the evidence to back this up, but I wouldn't be surprised in the end if it comes down to money. I mean, in politics, as long as I've been in it, you know, the loser doesn't endorse the winner unless there's word, somehow, somewhere, some way that the debt, which her debt was about $432,000 when she quit, will be taken care of by George W. Bush after he gets the nomination.

NOVAK: That's a pretty tough accusation, to say that she's been bought and paid for, particularly when you don't -- admit you don't have any evidence but...

PRESS: The point I have made is that I've learned that there's no free lunch or there's no free endorsement in politics either. I am just saying, I wouldn't be surprised if that turns out to be the deal.

NOVAK: Now the Bush people say that she is back on the vice presidential possible list. Is that ridiculous? No, because you have to wait and see until Philadelphia next year; if he is the nominee, he looks to see what he needs, where's he going.

SHAW: Now, Bill, if you feel that way about that endorsement, your thoughts on Senator Edward Kennedy's endorsement of Vice President Al Gore tomorrow in Boston.

PRESS: At the risk of being consistent, I'd make the same point, better to have him than not have him. I don't think it means a hell of a lot. I think the Clintons have been -- the Clinton-Gore administration has been particularly good to the Kennedy family, and I think it's payback time.

NOVAK: Let me explain to you what it means, Bill. I always like to explain Democratic politics to you.

PRESS: Please, please, please explain.

NOVAK: The -- Vice President Gore is in very bad shape right now. There is beginning to be a feeling that he's not going to make it. He's got high negatives. He doesn't look like a good candidate. He is now trailing in New Hampshire. And it was obvious right along that Ted Kennedy was for him, as practically the entire Senate is for him. And I believe they thought they needed him now rather than later, particularly whatever help he does get -- frankly, Teddy Kennedy will give him some help in upper New England and in Massachusetts, his home state, and perhaps even in New York. So I think it is a sign that the Gore people are in trouble, and this was a life preserver thrown out by Ted Kennedy.

PRESS: And it may help, granting Bob's point, on the particular issue that Bradley's trying to push, which is health care, because nobody has done for health care than Teddy Kennedy. And for Teddy, whose the most liberal probably of the senators, except maybe for Barbara Boxer, to endorse Gore, I think maybe provides a slight firewall in that direction.

SHAW: I really want to know, do you share Bob's view that Al Gore is in very bad shape?

PRESS: No, I don't share that view. I still think Al Gore wins the nomination, although I'll tell you, just having spent 10 days in California, I was surprised at the inroads Bill Bradley has made in what should be Gore's territory. Bradley is strong.

NOVAK: He's fading.

SHAW: Bob, you're saying that Gore is fading?

NOVAK: He's fading right now. It isn't a terminal fade, but he's definitely falling, and I think he needs some help, because he hasn't been a regular candidate.

SHAW: Very interesting.

On to the campaign coffers of Hillary Rodham Clinton and the matter of -- quote -- soft money.

NOVAK: It's come out on her reporting that she has, what, over $300 million in soft money coming in, just an enormous amount for a Senate campaign, that is a special fund, that isn't the regular thousand-dollar limit. It's an outrage.

SHAW: Three-hundred million?

NOVAK: Yes. And it's an absolute outrage for -- that this kind of money is coming into her, and it's a -- it's going to -- it's -- particularly with all the hypocrisy about campaign finance reform coming from the Republican -- from the Democrats. Now...

SHAW: I'm sorry...

NOVAK: Three-hundred thousand. I didn't say -- you know, you get in Washington, you think in millions -- $300, 000. But the Republicans have been so poor on campaign finance reform that they can't use the soft money argument very well, but please, give us a break from the Democrats talking about soft money when she's getting all of this soft money.

PRESS: What's an outrage is soft money. I think Bob said it -- is saying that. I disagree that it's more of an outrage for Hillary to use it. If you look at any of the Senate candidates that are in trouble today, they are building up these soft money PACs as an endrun around the thousand-dollars contributions. Republicans and Democrats across the country. There was a chance to get rid of soft money. John McCain wanted to do it. Trent Lott and the others said no, and now they're stuck with it.

And I might also point out one other thing, that when the ads first ran, those first ads that Hillary ran in northern New York, with soft money, and Rudy Giuliani expressed outrage, reporters asking whether he would agree not to use any soft money, and he would not agree. So I think it's going to be soft, soft all over the place, and shame on all of us for not getting rid of it.

NOVAK: Yes, but let's not have her talk about campaign finance reform. Let's say that she has disqualified herself.

SHAW: Bob Novak, thank you.

Bill Press, thanks very much.

PRESS: Good way to start off the year.

SHAW: Firing away.

There is much more ahead here on INSIDE POLITICS.

Coming up:


WILLIAM SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT (voice- over): President Clinton is famous for stealing Republican issues, like the balanced budget and welfare reform. Now he's going one step further: He's stealing the Republican's Federal Reserve chairman.


SHAW: Bill Schneider on the political strategy that keeps this man, Alan Greenspan, at the fed.



MARIA HINOJOSA, CNN CORRESPONDENT (voice-over): The legislature of this tiny state couldn't be more quaint, yet it's charged with such weighty issues as morality, humanity and civil rights.


SHAW: Maria Hinojosa on the landmark issue now facing Vermont lawmakers.

And later: the lengthy history between two political families. Our Bruce Morton and whether they could be closer in the future.


SHAW: We'll have more of the day's political news coming up, but now a look at some other top stories. One day after derailing over the agenda, peace talks between Syria and Israel are back on track in Shepherdstown, West Virginia. What happened to unstick the process? Well, for the answer, we turn to this distinguished journalist, CNN's Walter Rodgers in Shepherdstown -- Walter.

WALTER RODGERS, CNN CORRESPONDENT: Thanks, Bernie. What happened was it took a second presidential rescue mission from President Clinton. Mr. Clinton driving from the White House all the way up to West Virginia here in Shepherdstown to persuade the Israeli prime minister, Mr. Barak and Syria's foreign minister, Farouk Al- Sharaa, that they really ought to sit down face to face to begin these discussions. So we're now essentially at the starting line. What Mr. Clinton could not get the parties to agree to last night, a trilateral face-to-face meeting, he did persuade Mr. Al-Sharaa and Mr. Barak to agree to late this afternoon. They met for an hour, talks that were said to be very constructive. And the discussions are now under way.

The initial first day's snag, Bernie, appears to have been posturing on both sides, the Israelis and the Syrians seeking a procedural advantage, each trying to dictate to the other what the agenda would look like here. The Syrians, of course, wanted to talk about an Israeli withdrawal from the Golan Heights first; the Israelis, of course, wanting to insist that Syria address their security concerns. It took an American compromise, again, sponsored by President Clinton and Secretary of State Madeleine Albright, that compromise being that all issues were open for discussion at any time. So we had a trilateral meeting, the working sessions are underway this evening and tomorrow, and the talks are now back on track -- Bernie.

SHAW: Sounds very intense. On the Golan Heights, Walt, we're hearing reports that Israel is asking the United States for $17 billion to withdraw from the Golan Heights. What can you tell us about that one?

RODGERS: That is an -- well, I can tell you that the Israeli newspapers are filled with stories to that effect. President Clinton does not deny them, neither does State Department spokesman James Rubin, they just won't confirm the price tag, the $17 billion. And this is just military assistance that the Israelis want to ensure their security for getting off the Golan Heights, but some of the stories in Israel are fascinating, that is to say "Haarits (ph)," one Israeli newspaper said the Israelis are now looking for American cruise missiles, that is pretty interesting stuff -- Bernie.

SHAW: It certainly is. Walter Rodgers in Shepherdstown, West Virginia, thank you.

Interest fears -- interest rate fears and profit taking sent blue chips and technology stocks into a steep dive for the second day in a row. The Dow fell more than 359 to close at 10,997.93 in heavy trading. It was the fourth biggest point drop ever for the Dow. The Nasdaq, which closed at an all-time high on Monday, fell more than 229 points to 3,901.77.

You know, if your job allows you to work from home, a new federal policy could have an impact on you and your employer. The Labor Department says companies are responsible for federal health and safety violations in the home workplace. Business groups are opposed to this new policy. The United States Chamber of Commerce says, among other things, it could have a chilling effect on telecommuting.

Two trains carrying 96 passengers collided in southern Norway Tuesday, killing at least seven people and injuring 22. Several cars burst into flames after the crash. Rescue efforts were called off after seven hours of searching. At least 21 people are still missing. There's no word what caused this head-on collision about 110 miles north of Oslo.

Cuba says it won't stop the father of Elian Gonzalez from coming to the United States to pick up his son, if necessary. U.S. immigration officials are expected to decide this week whether to return 6-year-old Elian to his father. Elian, who was rescued from the Florida Straits in November, began first grade in Miami today.

When INSIDE POLITICS returns: Are President Clinton and his would-be successors playing politics with the chairman of the Fed, Alan Greenspan?


SHAW: Now to the White House, where something Al Gore, Bill Bradley, George W. Bush and John McCain all agree on: President Clinton renominated Alan Greenspan as chairman of the Federal Reserve.

CNN's Chris Black has more on the move that was widely expected and widely applauded.


CLINTON: For the past 12 years, Chairman Greenspan has guided the Federal Reserve with a rare combination of technical expertise, sophisticated analysis and old-fashioned common sense.

CHRIS BLACK, CNN WHITE HOUSE CORRESPONDENT (voice-over): No surprise, President Clinton reappointed Alan Greenspan to his fourth four-year term as chairman of the Federal Reserve, a full six months before expiration of his current term. Why?

CLINTON: Clearly, wise leadership from the Fed has played a very large role in our strong economy.

BLACK: Heading into the election year, President Clinton sent a reassuring message to the financial markets, and let the American people know the same master of monetary policy will be in place during the term of the next president.

The Republican economist, a man of few words, had some uncharacteristic praise for the Democratic administration.

ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Your commitment to fiscal discipline, which as you know and indeed have indicated, has been instrumental in achieving what in a few weeks, as you pointed out, will be the longest economic expansion in the nation's history.

BLACK: And offered a clue as to why a 73-year-old man would prefer this job to retirement or the more lucrative business world.

GREENSPAN: It's like eating peanuts -- you keep doing it and keep doing it, and you never get tired, because the future is always ultimately unknowable.

BLACK: White House officials tell CNN Mr. Greenspan was the only candidate for the job. The only other name to surface was former Treasury Secretary Robert Rubin, who had indicated he was not interested. Chief of Staff John Podesta called Mr. Greenspan on December 22 to ask him if wanted to stay. The president's advisers wanted his name to go to Capitol Hill early this year so he would be confirmed before his term expires in June. Senate Majority Leader Trent Lott predicted no problems with Senate confirmation.


BLACK: White House officials said the president came to appreciate over time the role Mr. Greenspan played in the thriving economy, an opinion shared by Vice President Al Gore, who signed off on the reappointment early last fall -- Bernie.

SHAW: Chris, I want to ask you, not a sneaky question, but Clinton-Greenspan. Do these two need each other? Something has happened in their relationship, has there not, since Clinton first took office?

BLACK: Absolutely, Bernie. White House officials say that President Clinton was a little suspicious of the Republican chairman of the Fed at the beginning of his administration for a few years. But over time, both of these men have come to see that their success is linked and that their policies actually are compatible. And so this reappointment, there was really no debate in the administration over it. The president's top economic advisers all enthusiastically were in favor as was the vice president. And it was a no-brainer, they say.

SHAW: Interesting, Chris Black, because as you know in the year's gone by, there used to be very intense debate over the Fed.

Thanks very much.

More now on the politics behind that decision to keep Greenspan at the Fed. For that, we turn to our senior political analyst, Bill Schneider.

What about it?

SCHNEIDER: Bernie, you know President Clinton is famous for stealing Republican issues, like the balanced budget and welfare reform. Now he's going one step further: He's stealing the Republicans' Federal Reserve chairman. Has he no shame? Well, let's put that question aside, and ask, has he no rationale? That's easy. Of course he does. (BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): President Clinton knows that a Federal Reserve chairman can make or break presidential candidates. Arthur Burns helped make Richard Nixon in 1972, when the Fed allowed a huge expansion of the nation's economy. Paul Volcker helped break Jimmy Carter in 1980, when the Fed pushed interest rates up and choked off any prospect of an economic recovery.

The Democrats' worst nightmare is that the Fed will raise interest rates enough to slow down the economy and create fears of a recession. Tough luck, Gore. Bye-bye, Hillary. Which is why the president has been effusive in his praise of Greenspan.

CLINTON: This chairman's leadership has been good not just for the American economy and the mavens of finance on Wall Street, it has been good for ordinary Americans.

SCHNEIDER: Remember, Greenspan was first appointed by President Reagan, then reappointed by presidents Bush and Clinton. He's a real bipartisan figure.

Look at his popularity ratings. He's popular among both Democrats and Republicans, though Republicans seem to have stronger opinions of him, both favorable and unfavorable, which shows up in the campaign. Some Republicans denounce Greenspan, claiming he's trying to spoil a good economy.

STEVE FORBES (R), PRESIDENTIAL CANDIDATE: They're trying to slow the economy down. It's bizarre.

SCHNEIDER: Others embrace him, as a way of saying Republicans won't do anything to spoil this good economy.

MCCAIN: If Mr. Greenspan should happen to die, God forbid, I would so like they did in the movie "Weekend At Bernie's." I'd prop him up and put a pair of dark glasses on him and keep him as long as we could.

SCHNEIDER: Democrats want to make Greenspan the symbol of their successful stewardship of the economy.

GORE: I have in the past given you my assessment of his performance by giving him a grade of A-plus, plus. I'll add another plus to that.

SCHNEIDER: All Democrats.

BRADLEY: I strongly support his reappointment of Alan Greenspan. I think that he has performed very well.

SCHNEIDER: But there's a risk for Clinton in reappointing Greenspan. It could promote the idea that the good economy really is bipartisan, a point Republicans are trying to make.

FORBES: It was the Republicans who stopped some of the destructive nonsense of the Clinton-Gore administration that enabled us to enjoy the prosperity we have today.

SCHNEIDER: Greenspan takes the partisan edge off the economic issue, and that could create a big problem for Democrats.


SCHNEIDER: Because voters may conclude that it doesn't matter whether the president is a Democrat or a Republican, the economy will be OK either way. You know, Greenspan embodies a bipartisan consensus on the economy. So now what we have is two parties trying to say, hey, this is our bipartisan consensus.

SHAW: But you know, Bill, politicians, either Democrats or Republicans, they cannot touch this man. Why?

SCHNEIDER: Well, legally, of course, the Fed is independent, constitutionally independent, which drives politicians crazy. Because the institution most responsible for controlling the economy is beyond the reach of politicians. And Alan Greenspan, more than most Fed chairmen, has been impervious to any kind of political appeal. A lot of Republicans blame him for George Bush's defeat in 1992, and they say he's never been a partisan one way or the other.

SHAW: He is clearly his own man.


SHAW: Thank you, Bill Schneider.

And when we return, the first lady prepares to make New York her home. And Vermont braces for a debate on a controversial issue.


SHAW: The first lady has some unpacking to do in New York today. Two moving vans delivered the Clintons' furnishing and belongings from storage to their new home in New York. Mrs. Clinton is expected to begin unpacking tomorrow in Chappaqua and plans to move in by the end of next week.

And as the first lady enters a new stage of for her New York Senate campaign, does the move say something more about her personal life?

Tish Durkin Of "The New York Observer" joins us now.

Does it?

TISH DURKIN, "NEW YORK OBSERVER": Well, I think what's more important is what it says about the first lady's political life. I think that whatever is strange or not strange about the Clintons' marriage remains so whether the first lady is in Chappaqua or in Washington, D.C., but this is clearly, A, the final nail in the coffin to the ever-persistent notion that she might somehow pull out of this race even at this late date. And secondly, it's a statement of singleness of purpose, and a final putting of the first lady aspect of her character on the back burner.

SHAW: So symbolically these two vans moving up to New York as she starts unpacking tomorrow, these two vans symbolically indicate that Hillary Clinton has reached the point of no return.

DURKIN: Absolutely. I think she reached it quite a while ago, but even the most doubting of Thomases would have to come to that conclusion. I think once you see the vans pulling into the driveway up at Chappaqua, that debate is over.

SHAW: Does she have some fence-mending to do with the neighbors up there?

DURKIN: Well, I think since the purchase was announced some months ago, there was concern and indeed some grievances being expressed by members of the Chappaqua community, which is a rather semi-posh and kind of quiet community that doesn't think kindly about the traffic and the attention and the notion of helicopters overhead and Secret Service looming and so on and so forth. So I think that the first lady has got to be anxious to get in, get settled in and assure the neighbors as much as possible that their not going to -- that their entire lives are not going to be disrupted for the entirety of the next year.

SHAW: Talking about relations, what about Hillary and the cardinal?

DURKIN: Well, you know what? I actually -- you're referring to a letter written by John Cardinal O'Connor to a Catholic priest who heads an Irish organization that had moved toward endorsing Mrs. Clinton because -- out of appreciation for her, what they see as her positive role in the Irish peace process. And the cardinal expressed some concern that a Catholic priest would be heading an organization supporting such a pro-choice candidate as Mrs. Clinton.

I personally don't find that particularly remarkable because, you know, the specter of a Catholic cardinal addressing a Catholic priest on an issue that is a very important to the Catholic church is not unusual. And secondly, it's not as if an awful lot of people who are in lockstep with the cardinal on that issue are going to be voting for Mrs. Clinton anyway.

And finally, of course, as Mayor Giuliani wants to know, he is as at least as pro-choice as is the first lady.

SHAW: Well, is abortion more a problem for the mayor than Mrs. Clinton?

DURKIN: I actually think it is for this reason. I think that by and large, needless to say, in the state of New York, it is a -- strictly on the raw politics, it is a good thing rather than a bad thing for a Republican to be pro-choice and pro-gun control and all those other things that we know of the mayor, because if he were not they would supply terrific battering rams for the first lady to use against them. And that's a problem for her. She doesn't have those battering rams.

However, if you go to -- the cardinal's letter sort of points up the idea that really right-wing or conservative-minded people, be it on abortion or any number of other issues, really have no dog in this fight. And it will be interesting to see, I think, in coming months how the mayor tries to address that. If this is a close race, that's a tough problem for him. He goes into this based on 1998 numbers, Republican versus Democrat, with something like an $800,000 -- 800,000 vote disadvantage...


DURKIN: ... And he's got to make that up with third parties, two of which are quite right-wing in their perspective.

SHAW: "The New York Observer"'s Tish Durkin. Good to see you this year.

DURKIN: Nice to see you.

SHAW: Thank you.

In Mississippi today, Ronnie Musgrove recaptured the governor's mansion for the Democrats in the first ever statehouse election of Mississippi's chief election. As expected, members of the Democratic- controlled statehouse elected Musgrove over Republican Mike Parker. The vote: 86 to 36.

This election was thrown to the statehouse after Musgrove narrowly won the November general election but failed to get more than 50 percent of the vote. Musgrove has a week to prepare for his inauguration. He replaces Kirk Fordice, Mississippi's only Republican governor this past century.

In Vermont today, members of the state legislature met for the first time since that major controversy was thrown in their laps. That is, the state supreme court's ruling that gay couples must have the same rights as married men and women.

CNN's Maria Hinojosa looks at what is at issue, legally and politically.


HINOJOSA (voice over): The legislature of this tiny state couldn't be more quaint, yet it's charged with such weighty issues as morality, humanity and civil rights.

At the center of the debate are Stacey and Nina, who in the liberal state of Vermont can both legally be mommies to newborn Seth, but that's all.

NINA PECK: It's like an unfinished triangle. They have a relationship and we have a relationship, but the two of us don't have a relationship legally.

HINOJOSA: The couple sued to force Vermont to make that circle complete.

(on camera): Vermont's constitution has something called the common-benefits clause. That means that no matter how you live or where you live, you're supposed to have the same benefits as anyone else. The state supreme court ordered the legislature either let gays and lesbians get married, or to come up with an equal system under another name.

GOV. HOWARD DEAN (D), VERMONT: This is a benefits and rights decision, it is not a marriage decision. And that, I think, gives us the opportunity to craft what many would view as a compromise.

HINOJOSA (voice over): The governor wants the legislature to adopt an enhanced domestic partnership agreement. That means gay and lesbian couples here still couldn't use the word marriage, but would have more rights than in any other state.

That concession troubles opponents.

REV. CRAIG BENSEN, TAKE IT TO THE PEOPLE: If Heather has two mommies, Heather doesn't have a daddy, Heather is losing.

HINOJOSA: Without civil marriage, the lawyer behind the landmark case says gay couples are the ones who lose.

BETH ROBINSON, PLAINTIFF'S ATTORNEY: Any separate-but-equal system that the legislature may come up with isn't going to be truly equal.

HINOJOSA: For now, Stacy and Nina are seen as equals in the eyes of their married neighbors. And on the floor of the legislature, where the personal often becomes political, it's clear their message has been heard.

Maria Hinojosa, CNN, Montpelier, Vermont.

SHAW: Up next: From feuds to endorsements, a look at the ties between the Bushes and the Doles.


SHAW: Elizabeth Dole's endorsement of George W. Bush today was just the latest chapter in an ongoing saga.

Our Bruce Morton looks back at sometimes contentious relations between the Bush and Dole families.


BRUCE MORTON, CNN CORRESPONDENT (voice over): These two families go back a very long way. In 1972, then-President Richard Nixon decided to dump Bob Dole as chairman of the Republican National Committee. White House aide John Ehrlichman's notes read "Dole -- he must go."

Nixon wanted somebody full-time -- Dole was in the Senate -- somebody centrist. He chose George Bush. I have a memory of Dole coming back from Camp David and telling reporters, "they called me up to the mountain and pushed me off," but I can't find the quote.

Both Dole and Bush ran for president in 1980. Dole went nowhere. Bush beat Ronald Reagan in the Iowa caucuses, but Reagan beat Bush in New Hampshire and never looked back.

Both ran for president in 1988. Dole won Iowa -- Bush finished third -- and they traded angry charges in New Hampshire.

Dole said Bush lied about his record.


BOB DOLE (R), PRESIDENTIAL CANDIDATE: Well, I think he's been lying a lot, very frankly. And he won't get away with it again.


MORTON: Bush ran an ad about Dole -- Senator Straddle.


ANNOUNCER: George Bush says he won't raise taxes, period. Bob Dole straddled, and he just won't promised not to raise taxes -- and you know what that means.


MORTON: That time Bush went on to win the White House. And later he chose Elizabeth Dole as his secretary of labor.


GEORGE BUSH, PRESIDENT OF THE UNITED STATES: I have a piece of good news to deliver before the holiday, and that is that Elizabeth Hanford Dole has agreed to be the Bush administration secretary of labor.


MORTON: So the feud ended. Both Bushes had warm words for Dole during his 1996 campaign.


G. BUSH: And on behalf of the Bush family, I am very proud to welcome the next president of the United States and his wife, Elizabeth Dole.


MORTON: And now, she's endorsed him. Could she be the running mate? Never held elected office -- had two cabinet jobs. The Democrats nominated a woman in 1984 and lost, but probably no running mate could have helped Walter Mondale beat Reagan. This time? Richard Nixon once said a woman would help a Republican more than a Democrat because it would surprise people. Suppose he was right?

Bruce Morton, CNN, Washington.


SHAW: Interesting.

Well, that's all for this edition of INSIDE POLITICS. We'll see you again tomorrow when our Patty Davis will be live in Durham, New Hampshire, with a preview of tomorrow night's debate between Bill Bradley and Al Gore.

And, of course, you can go online all the time at CNN's Republican presidential candidate Alan Keyes will be available for an online chat tomorrow at 4:30 p.m. Eastern.

I'm Bernard Shaw. "WORLDVIEW" is next.


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