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Inside Politics

McCain Strengthens Talk on Taxes; Early Primaries Likely to Shape Voter Expectations; Moderators Usurp Spotlights at Presidential Debates

Aired January 10, 2000 - 5:00 p.m. ET



GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Perhaps we need to, say, quote Regis to Senator McCain and say, Mr. Senator, is this your final tax plan?


FRANK SESNO, CNN ANCHOR: The McCain tax plan is in play as the Republican version of "who wants to be president?" moves to Michigan.

Also ahead...


UNIDENTIFIED MALE: One, two, three, four, we love Al Gore!


SESNO: Candidates in the corn -- we'll have an update on the Democratic race in Iowa and the expectations game there.



HOWARD KURTZ, CNN MEDIA ANALYST (voice-over): In the flurry of debates in recent weeks, the personality of the moderator has often shaped the tone of the encounter.


SESNO: Media reporter Howard Kurtz wonders who are the real stars of the presidential debates.

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

SESNO: Thanks very much for joining us. I'm Frank Sesno, sitting in today for Bernie and Judy.

We begin with the presidential battleground of Michigan and what Republicans hope to gain during their debate there tonight. State GOP leaders are billing the February 22 primary as the one that "clinches the nomination or blows the race wide open." At the very least, Michigan is a state where George W. Bush may be feeling less secure about his lead.

That is because, as CNN's Bruce Morton reports, John McCain has been coming on somewhat stronger in the polls and on the subject of taxes.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: On the issue of tax cuts, lower and middle-income Americans deserve tax returns breaks. They deserve to get a lot more money back.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): John McCain, at a town meeting in Holland, Michigan, talked taxes, a subject he and George W. Bush disagree about, a subject on which McCain plans a major speech this week. The Arizona senator trails here partly because popular three-term Governor John Engler has endorsed Bush. State chair Betsy De Vos says Engler's endorsement matters.

BETSY DE VOS, MICHIGAN GOP CHAIRWOMAN: He has clearly been a very strong leader and will leave his mark in many, many ways beyond his term as governor. So his support for a candidate or for an issue is particularly influential.

MORTON: Still, McCain has gained some ground on Bush.

ED GOLDER, POLITICAL REPORTER, "GRAND RAPIDS PRESS": He has been way ahead in the polls, but there is an insurgent McCain coming up on him quickly, and I think that's one of the reasons that Governor Bush decided to attend this debate after weeks of saying that he wouldn't.

MORTON: Both McCain and Bush are running TV ads here.

DE VOS: I probably have seen four of the Bush ads to one of the McCain ads so far.

MORTON: Down the road in Wyoming, Michigan, Steve Forbes got a warm reception from an audience of home-schooled children and their parents.

STEVE FORBES (R), PRESIDENTIAL CANDIDATE: Life, I believe, begins at conception and should end only at natural death.


GOLDER: There is a Forbes campaign, and it's -- it hasn't done an awful lot of good. I mean, he's got an organization in Michigan, but he hasn't done very well.


MORTON: Is Michigan a battleground? Well, that depends on what happens in the earlier states. Texas Governor Bush arrived here not very long ago and a reporter asked him, "Is this a fire wall for you if you do badly in the early states in New Hampshire and South Carolina?" Bush said, "I don't accept that premise. I'm going to do well in those states." In fact, were Bush to win decisive victories in New Hampshire, South Carolina, it would probably be all over by the time it gets here. If John McCain wins, or holds them close, then Michigan becomes a very important battleground -- Frank.

SESNO: Bruce Morton in Grand Rapids, Michigan.

In the Democratic race, Bill Bradley continued to campaign in Iowa today, following his debate there with Al Gore over the weekend.

CNN's Jonathan Karl has the latest on Bradley's bid to gain more ground in Iowa exactly two weeks before the caucuses there.


JONATHAN KARL, CNN CORRESPONDENT (voice-over): For Bill Bradley, the full-court press is on. It's not quite a sprint, but he is working his way through cities and towns throughout Iowa.

BILL BRADLEY (D), PRESIDENTIAL CANDIDATE: I'm running against somebody called Al Gore. You ever hear of Al Gore?

KARL: Monday's theme is education. Bradley stopped by schools in the towns of Atlantic, Exira and Carroll.

BRADLEY: And for me the most important thing to put a great, qualified teacher in every classroom in this country. And so what I am suggesting is that we put 600,000 great new teachers in classrooms across this country.

KARL: On education, Bradley sounds a lot like his rival Al Gore. Both emphasize early childhood development and after-school programs and the need for more teachers. Both want to dip into the surplus to spend about $100 billion on new initiatives.

Agriculture, though, is emerging as the battleground issue in Iowa, as Bradley is relentlessly hammered by Al Gore on his voting record on farm issues in the Senate. Over the weekend, Bradley started firing back.

BRADLEY: There is no credibility for Al Gore to come to Iowa and say, I'll help family farmers. Because the last seven years, there's been zero help for family farmers from this administration.

KARL: Bradley thinks Gore is especially vulnerable on agriculture. The campaign is citing government statistics to show how Iowa farmers have suffered under the Clinton-Gore administration, as commodity prices and farm income have plummeted. Bradley blames Gore for the collapse of the farm economy, even as he says the vice president deserves no credit for the economic boom elsewhere.

(on camera): But if he doesn't deserve credit for the economy, why does he deserve blame for what has happened to the family farmers? BRADLEY: Because you tell me one suggestion he made since 1992 or since 1996 to provide a safety net for family farmers, just one suggestion and you know, you won't find any.

KARL (voice-over): Speaking in Des Moines, Iowa, Senator and Gore supporter Tom Harkin shot back.

SEN. TOM HARKIN (D), IOWA: When it comes to things that matter economically to farmers and the rural people of Iowa, Al Gore has always been there with us, and quite frankly Senator Bradley has a pattern of voting against those interests.


KARL: The same polls that show Al Gore with a commanding double- digit lead here in Iowa show that more than half of likely Democratic caucus-goers say they could change their minds, and that's a potential opening for Bill Bradley -- Frank.

SESNO: Jonathan, we heard Bill Bradley there being very critical of the Bush -- sorry -- of the Clinton administration on the subject of agricultural support. What exactly does Bradley himself offer by way of a program?

KARL: Well, Bradley talks about a fundamental shift in agriculture policy. Taking money, federal aid away from big corporate farms and moving it toward smaller family farms. His proposals, though, are a little bit short on specifics over exactly how he would accomplish that -- Frank.

SESNO: Or the price tag?

KARL: Or the price tag.

SESNO: All right. John Karl, more details to follow, thanks very much.

In New Hampshire, the Democratic contest is much closer. A new "Boston Globe" survey of likely Democratic primary voters shows Bradley and Gore still neck and neck. An American Research Group survey shows Bradley with a slight lead. On the Republican side, "The Boston Globe" survey shows Bush three points behind McCain. But McCain has lost some ground since last month. The American Research Group poll also suggests McCain's surge in New Hampshire has stalled.

Polls from the states that hold early primary season contests are helping to shape expectations in campaign 2000. So are pundits, such as our Bill Schneider.

Bill, shame on you.


WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Frank, we're going to talk about "great expectations," even though this is not "Masterpiece Theater." Every race includes a phantom contender called expected.

It's not enough for a candidate to win. The candidate has to do better than expected. If the candidate wins, but does worse than expected, it's a setback. Now, who defines what's expected? The polls, the pundits and the talking heads. The campaigns try to influence expectations by low-balling them. That way, anything they get is better than expected.

Now, with the early contests just a few weeks away, it's now time to play the expectations game.


SCHNEIDER (voice-over): First, the Democrats. What's expected in Iowa on January 24? A solid win for Gore. What if Bradley comes in a close second? Then Bradley has done better than expected and gets a boost going into New Hampshire. How close is close? A five- point victory for Gore is close. A 20 point victory is not. In between can be spun either way. And in New Hampshire, February 1? Listen to the Democrats try to spin expectation.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: In New Hampshire, the polls say that you are ahead. I'm asking people to give me a come from behind upset victory here.

BRADLEY: Your underdog pitch brings tears to my eyes.


GORE: Well, I hope that my upset victory brings tears to your eyes on February 1.

SCHNEIDER: What's actually expected for the Democrats in New Hampshire? Bradley wins, then he becomes a contender, he's beaten the vice president at least in one state. The race goes on. What if Gore wins? The race is over. The empire has struck back. If Bradley can't win New Hampshire, where he's campaigned the hardest and where conditions are most favorable, he's out.

Now the Republicans. What's expected in Iowa? A solid win for Bush with Steve Forbes second and John McCain, who's not campaigning in Iowa, way back. What if Bush wins narrowly in Iowa, say, 10 points or less? That's a setback for the front-runner, trouble going into New Hampshire. If Forbes is a close second to Bush, he gets a big boost out of Iowa and suddenly becomes a serious contender. What if McCain beats the odds and comes in second or third in Iowa with no campaign? Then he gets the big mow.

What's expected in New Hampshire? McCain wins, same deal as for Bradley. McCain becomes a contender and the race goes on.

What if Bush wins New Hampshire? McCain is out. But Bush may not be home-free, because the Republicans have other contenders. If Forbes or Bauer runs a decent second to Bush in New Hampshire, then Bush may still have to fend off a serious challenge from the right. The race goes on. (END VIDEOTAPE)

SCHNEIDER: Outsiders like Bradley and McCain are expected to do well in New Hampshire. You know, this is the state that gave us Eugene McCarthy. Jimmy Carter, Gary Hart, Pat Buchanan. New Hampshire is the political equivalent of Roswell, New Mexico. Aliens land there. The question is can they survive anywhere else. California is the next big test for both parties on March 7th, and Californians have always been attracted to aliens.

But first, McCain will have to survive some tough tests in South Carolina, where he's depending on the veterans' vote, and in Arizona, where his own constituents could finish him off.

SESNO: All of a sudden the expectations are going to have to the track with you next time. We'll see how you do.

Hey, what are the expectations for Gary Bauer and Steve Forbes, to take two particulars?

SCHNEIDER: Well, Frank, Forbes is expected to do better right now than Bauer because he has more money. Remember what happened when Pat Buchanan beat Phil Gramm in Iowa in 1996? Gramm was out and Buchanan became the champion of social conservatives. Same thing would happen this time if Gary Bauer beats Forbes in Iowa. Then Forbes is finished and Bauer becomes the champion of social conservatives. And so what? The right is not expected to be a major force in this campaign. Ah-hah. That means expectation for Bauer and Forbes are very low in New Hampshire. If either one of them does better than expected, the right suddenly becomes a force.

SESNO: Makes perfect sense. Bill Schneider, thanks very much -- appreciate it.

Well, we're going to talk some more about expectations and the early contests in Iowa and New Hampshire.

For that we bring in David Nyhan of "The Boston Globe" and David Yepsen of "The Des Moines Register."

Gentlemen, welcome to you both.


SESNO: Great to see you.

David Nyhan, let's start with you.

Expectations from ground zero where you are? First the Republicans?

DAVID NYHAN, "THE BOSTON GLOBE": McCain has to win New Hampshire to stay alive with any chance for the nomination. He has been ahead of Bush marginally up here until recently. Both Bradley and McCain were ahead here, but the institutional organizations of Senator Judd Gregg on behalf of Bush and on Governor Jeanne Shaheen on behalf of Gore I think make it a little tougher for the two challengers.

SESNO: Well, let's talk Republicans for just a minute. Do you feel things changing there? Do you see them changing? We mentioned some of those polls.

NYHAN: Yes, Bush had his best week in New Hampshire last week. He had a strong performance in the Manchester Republican debate. Things are coming together for him. And John McCain has been set back a little, been on the defensive because of the furor over the letters that he wrote as the Senate Commerce Committee chairman on behalf of contributors.

SESNO: So that's actually had some impact where you are?

NYHAN: I think so. And I think you just get the feeling that the Bush momentum, which is so overwhelming elsewhere, is starting to kick in New Hampshire as well.

SESNO: David Yepsen, different calculus where you are because of McCain's lack of meaningful organization and competition where you are. But do you see any dynamic shifting here?

YEPSEN: Well, we're only a couple of weeks away -- it's always easy to say it's too early -- but Governor Bush is way ahead here. He's got a lot of the institutional pieces of the Republican Party out here who are with him, and the polls show he's way ahead. But his people are worried about complacency, they're worried about getting people out on caucus night to go vote. When you're way ahead in the polls, then your people start to sit on their hands. So I could tell you that the Bush campaign is worried about getting some of the grassroots work done.

The second thing, the dynamic that's at work here is in the Forbes campaign. Iowa is really do or die for Steve Forbes. He's got nothing going in the polls in New Hampshire. He's in second place here in Iowa. He hasn't been here much. He's planning to come back later this week to do a big bus tour to try to gin something up here in the end. So we're keeping an eye on Steve Forbes to see whether he can rekindle some of the sparks that he had earlier in the campaign.

SESNO: David Nyhan, what about Steve Forbes in New Hampshire?

NYHAN: If he does well, if he does a reasonably strong second in Iowa, that will help him in New Hampshire and it will hurt John McCain, I think. Forbes has not been a factor, even though he's been running ads lately in New Hampshire criticizing Bush on the tax front. Interestingly, the Bush people tried a preemptive strike, and for three weeks they've been running an ad daily in New Hampshire in which Bush promises tax cuts. So they think they've inoculated themselves. The Bush people think they've inoculated themselves against this. But if Forbes does well out in "Yepsen country," which is what we call it here, in Iowa, then that will help Forbes in New Hampshire.

SESNO: Well let's go back out to Yepsen country for a minute -- you're on the railroads, too, I guess, David. That's not bad.

YEPSEN: Right, right.

SESNO: The agricultural issues seem to be some of the issues around which the Democratic campaigns are crystallizing their debate. What's the impact there?

YEPSEN: Well, I think it has some impact. The Bradley campaign is trying to capitalize on the world of hurt that exists in rural America. The rest of the country's in an economic boom, Frank, but they're not in rural America, and so Senator Bradley is out here in small Iowa towns today campaigning hard. His people are trying to develop something of a rural strategy to pick up some votes against Al Gore, arguing that it's the Clinton-Gore administration who's been there for seven years. And, as Senator Bradley asked in the debate, are you better off today than you were seven years ago? I tell you, it's got the Gore people a little bit worried.

SESNO: But the Gore people are also striking back. And the Gore people are saying that what's Bill Bradley going to do for agriculture? Any traction to that?

YEPSEN: That's right, and there may be some. I mean, Senator Bradley comes from an urban state. He doesn't have the greatest voting record on ag issues. Frankly, Frank, maybe too much is being made out of this ag business out here. If you look at who these caucus-goers are -- I know Iowa is a farm state -- but the most Democratic caucus-goers are not in agriculture or have jobs tied to agriculture. They're doing other things. And so while we're having this little spat right now over here over agriculture, I think a lot of other dynamics and factors are going to be at work in the outcome on caucus night.

SESNO: OK, from Yepsen country back to Nyhan country for a minute, what is developing on the right there in New Hampshire? We heard David talking a moment ago about Gary Bauer and Steve Forbes and the conservative right. What about in New Hampshire?

NYHAN: Well, the absence of Pat Buchanan as a factor -- remember, Frank, Buchanan won here four years ago -- and the decline of the :Manchester Union Leader" as the right-wing trend setter or standard bearer in the journalism scene means that the conservatives have less going for them in New Hampshire than in any previous primary I can recall. Their issues -- guns, crimes -- are not big issues here. And the fact that we have a moderate Democratic governor in Jeanne Shaheen and a relatively moderate congressional delegation -- if you take out Senator Bob Smith, who was himself briefly a candidate and then went off the right-wing edge somewhere -- means that this is -- it's going to be a moderate year in the Republican primary. And that helps Bush tremendously.

SESNO: David Nyhan, David Yepsen, both of you from your respective countries, we thank you very much for your time today. Appreciate it, great to see you both as always.

YEPSEN: Thanks, Frank.

SESNO: Thank you. And later on INSIDE POLITICS, Al Gore at the United Nations. Was his announcement there a campaign pitch, too?

And up next:


JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): Between prayers and hymns, many pastors work in a little plug for politics.


SESNO: John King on the influence of Christian conservatives in the Iowa caucuses.



SESNO: In Iowa, especially in the weeks before the presidential caucuses, it can sometimes be difficult to tell the difference between a Sunday church service and a campaign event.

CNN's John King looks at the role of Christian conservatives in the Iowa contest and the GOP candidates who are trying to win them over.


KING (voice-over): The special guest is presidential hopeful Gary Bauer, here not for an endorsement, but a blessing.

REV. NOEL WILCOX, MOLINE GOSPEL TEMPLE: But our prayer as a church today is that he, wherever he goes, will continue to hold up Your name as the solution to our nation.

KING: Church-going Christian conservatives are a major force in the Iowa caucuses, their support critical to Bauer's underdog campaign.

GARY BAUER (R), PRESIDENTIAL CANDIDATE: We're living at a time when we can't pray in the schools, 1 1/2 million of our children are thrown away every year, and we're on the verge of redefining marriage to be between two men or two women.

Ladies and gentlemen, this country desperately needs you.

KING: In exit polls four years ago, nearly 40 percent of Republican caucus-goers described themselves as Christian conservatives. So with this year's caucuses now just two weeks away, competition for their support is fierce.

REV. DAVID MILLER: We pray that You would honor him as he has honored You. We pray that Your blessing will be on him throughout this campaign. KING: Some rivals criticize Texas Governor George W. Bush for refusing to make opposition to abortion a litmus test for Supreme Court nominees, but Bush has deep support among Iowa's social conservative activists.

HUGH WINEBRENNER, DUKE UNIVERSITY: As they mature, they become more pluralistic, they become more interested in winning than simply making a statement. And that's what is happening with the Christian right in Iowa.

KING: Steve Forbes hopes a weekend Christian Coalition straw poll victory in Georgia translates into more support here in Iowa.

UNIDENTIFIED MALE: I'm really, really pleased. We have -- I mean, we have dozens of pastors who have come on board now.

KING: Church-based networks are critical to candidates short on cash.

LARRY BOECKMANN, KEYES PRECINCT LEADER: The Christian Coalition and the Promise Keepers, the different church groups -- the different people who have the same values as the candidate that you are backing. Otherwise it's not going to work.

UNIDENTIFIED FEMALE: Labels and stuffing and typing.

More envelopes?

KING: Inviting pastors to lunch is part of the Bauer campaign's effort, and the presidential race is increasingly the subject of Sunday conversation.

REV. RAY CORLEW, WESTSIDE ASSEMBLY OF GOD: I don't ever try to tell them who to vote for. But I tell them to be very careful at looking at all the platforms and then voting their consciences.

KING: Bauer shrugs off those who say Republicans are wrong to mix politics and religion.

BAUER: I mean, I don't recall anybody criticizing Martin Luther King when he built an entire civil rights movement around the African- American churches in our country, and thank God that he did.

KING: So between prayers and hymns, many pastors work in a little plug for politics.

WILCOX: Would you agree that it's important that we not be spectators, but we be participators and prayers that God will guide each one of us individually to do what God wants us to do. Would you say amen?

Give the Lord a hand if you believe...

KING: John King, CNN, Davenport, Iowa.

(END VIDEOTAPE) SESNO: Up next on INSIDE POLITICS, John McCain prepares to lay out his position on taxes. Will it help him make his case against George W. Bush? We'll talk taxes with McCain campaign manager Rick Davis when we come back.



BUSH: I look forward to having -- to hear what version two is. And perhaps we need to say, quote Regis to Senator McCain and say, "Mr. Senator, is this your final tax plan?"



SESNO: George W. Bush told reporters in New Hampshire this morning that he thought John McCain had already unveiled his tax plan, and he questioned exactly what McCain plans to unveil tomorrow. McCain aides say, yes, the senator talked taxes last year in conjunction with the congressional debate going on at the time. But tomorrow he'll lay out his official presidential campaign stance on the issue.

McCain's speech comes as taxes take center stage in the Republican race, particularly in the leadoff primary state.


(voice-over): Another record day for the booming U.S. economy, and beyond Wall Street, prosperity has affected the bottom line on the signature issue in the New Hampshire GOP primary: taxes.

Swimming against current Republican orthodoxy, John McCain argues we should not use the projected windfall primarily to cut taxes. Most of it, he says, should go toward shoring up Social Security, Medicare and buying down the national debt.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: It's fiscally irresponsible to promise a huge tax cut that is based on a surplus that we may not have.

SESNO: It's an argument Democrats have used in the past against proposed Republican tax cuts. Now, McCain is using it against George W. Bush, whose $483 billion package of cuts is twice as big as McCain's. Bush responds in a new ad.


BUSH: There may be an increase in the surplus by $800 billion more than anticipated. That makes the idea of having a paltry tax cut even more risky.


SESNO: The ad never mentions McCain by name, but it's clearly an attempt to undercut his fiscal responsibility argument.

With Bush to the right of McCain, Steve Forbes is trying to position himself to the right of Bush in the first true attack ad of 2000.


UNIDENTIFIED FEMALE: There's something you need to know about George W. Bush. In 1994, he signed a pledge with my organization that he would not support sales tax or business tax increases. In 1997, unfortunately he broke this pledge. He proposed an increase in the business tax and sales taxes.


SESNO: Governor Bush did support an increase in business and sales taxes, but it was offset by a $3 billion cut in property taxes. Bush says he stands firmly for tax cuts.


So let's talk taxes now and campaign 2000 and John McCain with McCain campaign manager Rick Davis. He joins us from Grand Rapids, Michigan.

Good to see you. Thanks for joining us.


SESNO: Let us start then with the McCain program that we're going to hear tomorrow. As our briefings lay it out, it will be about $240 billion worth of tax cuts over five years. Most of it, about 62 percent of it, to be precise, would go to shoring up Social Security, 10 percent to fix Medicare, 5 percent for debt reduction, and as I said, about 240 billion for tax cuts.

What do you say to those critics who say, hey, this sounds something like -- something like that would come right out of the Clinton playbook?

DAVIS: Well, I'd have to say that there's nothing more conservative than what John McCain is embarking upon to lay out tomorrow. The basic rockbed of conservative values of saving Social Security have always been strong. And we start out with a major commitment to do that. We're the only candidate who's actually going to present a program by which we make a commitment to preserving Social Security in the future and giving people who are in the Social Security system a chance to be able to set aside private accounts. Besides that...

SESNO: Mr. Davis -- go ahead. Sorry to...

DAVIS: Besides that, Frank, the tax cut at $240 billion is a very healthy tax cut.

SESNO: McCain has criticized -- McCain has criticized George Bush for not doing enough to help low-income Americans through his tax-cut plan while still cutting too much. Yet, in McCain's plan, as I understand it, that 15 percent tax bracket is not going to be reduced -- that is to say low- and moderate-income earners are not going to pay less tax -- but the upper end of the income bracket, of the income earners -- up to $70,000 -- will go into the 15 percent bracket. So what is John McCain doing for low and moderate income taxpayers?

DAVIS: Well, we have a number of important incentives for savings for low- and moderate-income brackets. And I'd have to say too that the -- the moving up of the 15 percent bracket will take millions of current taxpayers off the roles for the purposes of the lower income threshold. So it's real progress.

SESNO: But true or false -- but true -- true or false: that low- and moderate-income Americans will not get a tax cut or see their rates reduced under John McCain's tax plan?

DAVIS: Oh, absolutely false: 70 percent of our tax cut will be below 70 percent threshold, or $70,000 taxpayers.

SESNO: Yes, but what about the family earning -- what about the family earning $40,000.

DAVIS: Oh, absolutely. In fact, I think you'll find tonight that as details start coming out about our plan, and certainly in tomorrow's speech, I think not only do we compete with George Bush at the $40,000 threshold for his families that he's mentioned, but we actually do better than he does.

SESNO: Take a single person, no children, who's earning $45,000: Do they get a tax cut under John McCain's plan?

DAVIS: Absolutely.

SESNO: Where?

DAVIS: They not only get a tax cut -- because there are expanded IRAs. They have the personal savings accounts where they can put $3,000 a year into a personal savings account that allows them to save that money much like an IRA. All they've got to do is hold it in savings for one year and then they are able to use that money for anything that they need, family emergencies, medical emergencies, education, whatever they want to do. Just with that tax cut alone moves them into an area where they create a more productive economy by encouraging savings.

SESNO: How significant a role is the subject of taxes playing in New Hampshire and Iowa?

DAVIS: Well, taxes are always important to the Republican primary voters, and that's why we've made it one of the central elements of our four-point program. But we have sided on trying to take a more responsible and conservative approach to it by also taking a surplus which is not available every year and putting some of the money aside to pay down that debt, help encourage Medicare to stay afloat, and to take the time to actually set something aside for Social Security, so that the next generation isn't in the middle of a real jam.

SESNO: Before I let you go, I want to touch quickly on the question of what Senator John McCain has done to help constituents, some of them donors, a subject that has been bandied about quite publicly lately. Just exactly how many letters did Senator John McCain send to the FCC on behalf of non-corporate interests?

DAVIS: We released over 500 letters the other day, Frank, and it was in an effort to try and disclose as much as we possibly could. We've even asked the FCC in a full request to release whatever records they might have between the two, and the idea there is to show that the overwhelming majority, the correspondents that exist, 99 percent is simply helping constituents and those consumers who have had a gripe with the FCC.

SESNO: All right. Rick Davis, we thank you very much for your time. John McCain's speech on taxes, his policy on taxes laid out in more detail tomorrow. Appreciate it. Thank you.

DAVIS: Thank you, Frank.

SESNO: And there is much more ahead on INSIDE POLITICS.

Up next...


GORE: Today in sight of all the world we are putting the AIDS crisis at the top of the world's security agenda.


SESNO: An announcement that may help Al Gore win over some people who protested his campaign early on.

Plus, the latest and legal political twists in the case of the 6- year-old Cuban boy ordered back home to his homeland. Even Hillary Clinton is weighing in on that, as well as a campaign flap over soft money. That and more still ahead.


SESNO: We will have more of the day's political news coming up, but now a look at some of the other top stories we're following today.

Only days after U.S. immigration officials ruled on the fate of Elian Gonzalez, a Miami judge just moments ago also weighed in on the case of the 6-year-old Cuban boy. To Miami now and CNN's Mark Potter, with details on the judge's ruling announced late this afternoon -- Mark.

MARK POTTER, CNN CORRESPONDENT: Well, Frank, this is a major victory for Elian Gonzalez's family in Miami and for the Cuban- American community here. The ruling gives temporary custody of the boy to his great uncle in Miami, Lazaro Gonzalez, and orders the boy to stay in Miami until a hearing on the matter can be held on March 6. This flies in the face of an INS order that he be returned to Cuba Friday to be with his father. In asking for temporary custody of the boy, the families' lawyers argue that if Elian went back to Cuba he would be harmed physically and mentally because of the conditions there. In announcing her ruling, Judge Rosa Rodriguez agreed that at least at this stage a case was made.


JUDGE ROSA RODRIGUEZ, MIAMI-DADE CIRCUIT COURT: Petition for interim order as well as the petition for temporary custody contains sufficient verified allegation that if emergency relief is not granted and Elian is returned to Cuba he would be subject to imminent and irreparable harm, including loss of due process rights and harm to his physical and mental health and emotional well being.


POTTER: The judge also ruled that the boy's father in Cuba Juan Miguel Gonzalez should come to Miami for the hearing, be notified and be brought here. Now he has said, of course, that he's not coming to Miami. The judge said that if he doesn't show up it could hurt his case. The lawyers for the family here in Miami are ecstatic, of course. With this ruling, they got everything they wanted.


SPENCER EIG, FAMILY ATTORNEY: Today is a great day for Elian Gonzalez, and a great day for the Constitution of the United States. Today's order by the court which granted emergency temporary custody to Lazaro Gonzalez and the Gonzalez family, a family which is taking very good care of Elian here, will permit Elian Gonzalez his day in court.


POTTER: The question now is how will the U.S. government respond? Will it honor or ignore the state judge's ruling? Some lawyers have said that federal authorities are not bound by a ruling from a state court. But if this judge here in Miami has her way, Elian's case will be on hold until now at least until March 6 and the family in Miami will finally get its day in court.

Mark Potter, CNN, reporting live from Miami.

SESNO: And we will tell you that we'll be having more on the reaction from Washington on the Elian Gonzalez story in just a few minutes, when we'll talk with our White House correspondent Kelly Wallace, who's been tracking the story from the capital city here.

And a program note: The Gonzalez custody battle is the topic of tonight's "LARRY KING LIVE." Representative Dan Burton will be Larry's guest tonight, 9:00 p.m. Eastern Time.

To some other news now. America Online and Time-Warner, parent company of CNN, agreed to tie the knot, creating the biggest corporate merger in history. The deal is valued at $350 billion, and it shows just how dominant the Internet and the digital landscape have become in the media world. AOL's Steve Case would take over as the new company's chairman, while Time-Warner chair, Gerald Levin, would be chief executive officer


STEVE CASE, CHMN. & CEO, AMERICA ONLINE: We're kicking off the Internet century with a unique company with unparalleled assets and unprecedented ability to accelerate the next Internet revolution and an unsurpassed opportunity to have a positive impact on society.


SESNO: Ted Turner, CNN founder and vice chairman of Time-Warner, maintains his title in the new AOL-Time-Warner company. The deal still needs government approval. And for more on the AOL-Time-Warner merger and how it may affect you, join us for a special edition of "MONEYLINE," that'll air at 6:30 p.m. Eastern Time right here on CNN.

And when INSIDE POLITICS returns: Al Gore's efforts to win gay and lesbian support. Might he help himself in the primary, but hurt himself in the fall?


SESNO: Republicans are pressing ahead with their attack against Vice President Al Gore's recent comments on gays in the military. The controversy followed the vice president to the United Nations today, where he pledged another $100 million to fight the worldwide AIDS epidemic.

CNN's Jeanne Meserve reports.


KOFI ANNAN, U.N. SECRETARY-GENERAL: Welcome, Mr. Vice President. Or perhaps I should say, Mr. President.


ANNAN: ... of the Security Council.


GORE: I'm working on it.

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Working on it even with this appearance. In one stroke, Gore underscored his international policy credentials and highlighted an issue of importance to two key Democratic constituencies, gays and blacks, committing more resources to battling AIDS in Africa.

GORE: The budget the Clinton-Gore administration will send to our Congress next month will include an additional increase of another $100 million for a total of $325 million to fund our worldwide fight against AIDS.

MESERVE: It is an interesting twist to see Al Gore taking up this cause. At the outset of his campaign, Gore was dogged by disruptive AIDS activists, who accused him of siding with big pharmaceutical companies and obstructing Africans' access to inexpensive AIDS drugs. The administration modified its policies, and now some of those same demonstrators are in the vice president's corner.

ERIC SAWYER, ACT UP: Bradley, who is also running for the campaign, has refused to meet with us and refused to issue a statement about AIDS in general.

MESERVE: Though Gore has backed off his requirement that appointees to the Joint Chiefs of Staff would have to pass a litmus test agreeing that gays should serve openly in the military, the backpedaling has not apparently hurt his standing with gays and lesbians.

WINNIE STACHELBERG, HUMAN RIGHTS CAMPAIGN: I don't see that there is any retreat on the part of the gay community or others from supporting him. In fact, it was just a clarification of his policy.

MESERVE: Despite Gore's clarification, the Republicans sense a soft spot and are ripping into Gore with a new television ad set to air later this week in Iowa, New Hampshire and South Carolina.


ANNOUNCER: General Colin Powell couldn't pass Al Gore's litmus test. Neither could Norman Schwarzkopf. Schwarzkopf and Powell, the heroes of Desert Storm.

Call Al Gore. Tell him the only litmus test ought to be patriotism.


MESERVE: Republican candidate Senator John McCain said, with their stands on gays and the military, both Bradley and Gore have proven that they are not qualified to be commander in chief.


MESERVE: But right now, Al Gore is worried about winning the Democratic nomination, and gays and lesbians figure into his calculations. His campaign estimates that in the key states of New York and California, gays and lesbians make up 10 to 15 percent of the primary electorate -- Frank.

SESNO: Jeanne Meserve, thanks.

And turning back again to the controversy over the Elian Gonzalez, as we reported earlier, a family court judge in Miami ruled today that 6-year-old Elian should remain in the United States under temporary custody of his great-uncle until a hearing can be held in March. Earlier today, Vice President Gore questioned last week's decision by the Immigration and Naturalization Service that Elian should be returned to his father in Cuba.

Now we want to bring you up to date on exactly what the administration is saying with our White House correspondent Kelly Wallace -- Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Frank, the White House says the Justice Department will have to decide if today's ruling by a Florida judge affects the INS decision.

The Justice Department, which has jurisdiction over the INS is withholding comment until it can see the actual ruling. But meantime, Republican Congressman Dan Burton, who caused quite a stir by issuing a congressional subpoena for the 6-year-old, is applauding today's developments.


REP. DAN BURTON (R-IN), GOVERNMENT REFORM CHAIRMAN: I'm happy that the court's agreed to hear the case. It makes it clear that the boy is not going to be immediately sent back to Cuba, and I think that's good. All the issues ought to be aired completely in the court, and they should make a decision on what's best for the boy.


WALLACE: Now Congressman Burton says he will still go ahead with his subpoena, although he says he does not expect it will ever come down to the little boy appearing before his House committee in February.

Earlier today, President Clinton refused to comment about whether or not it was appropriate for Congressman Burton to issue a subpoena for Elian. The president also refused to criticize his vice president, who appears to be at odds with his boss's handling of the Gonzalez case. Last week and again today, Democratic presidential candidate Al Gore said the fate of little Elian should be decided by the courts. The president said his vice president is free to disagree.

OK, and Mr. Clinton pretty much says that anyone who disagrees is free to express their opinion, but he said he's trying to do whatever he can to not have this matter politicized, and anyone who wants to challenge it should challenge it through the legal process.

But for now, Frank, the focus in Washington is on the Justice Department to see how it will decide whether the state court ruling affects the INS decision for the little boy to be reunited with his father in Cuba by this Friday -- Frank.

SESNO: Kelly, the president may be saying he doesn't want to see this politicized, but the fact of the matter is this is a highly politicized issue right now. And aside from saying this all belongs to working through the Justice Department and all the rest, what else is the administration doing to turn the temperature down on this? What can it do?

WALLACE: Well, you know, they're really trying to stay clear of it. And that's the thing. They are trying to say that they are not involved in this, that it is a legal matter. They're referring all questions to the Justice Department, and they're trying to say that anyone who has any -- who wants to challenge this should go to the courts. But clearly they're concerned. And in terms of the vice president, some political analysts think he could benefit politically by the remarks he's making, especially when it comes to winning the state of Florida in a presidential election. Cuban-Americans, these political analysts think, could very well vote on this issue. And it could cost the vice president, if he became the Democratic nominee, the state of Florida -- Frank.

SESNO: Kelly Wallace at the White House watching this closely -- thanks.

First lady Hillary Rodham Clinton today expressed support for the INS ruling, but speaking to reporters in New York, where she's running for the United States Senate, Mrs. Clinton also said she understands those who want to challenge the decision in court.


HILLARY RODHAM CLINTON, FIRST LADY: The INS made the decision, but there is a right for parties to go into the court to challenge that decision, which is what's going on now. My plea is that it get resolved quickly and that the best interest of the child be the determining factor and that this child not be used as a political football to advance certain political or ideological points of view.


SESNO: Mrs. Clinton also commented on reports that her expected opponent in the Senate race, New York Mayor Rudy Giuliani, has received soft money from two little-known political committees. According to "The New York Times," the two committees have taken in and spent almost $1 million for Giuliani's political operation since 1998. Recently, the mayor has criticized Mrs. Clinton for collecting more than $350,000 from a special Democratic Party national committee that can legally accept unlimited donations. Aides to Giuliani say the money he received is above board and that the Federal Election Commission has not questioned the donations.

Still to come on INSIDE POLITICS, campaign debates. Who is in the spotlight, the presidential candidates or the network anchors?


SESNO: It has happened frequently in the presidential debates of campaign 2000, the moderator more or less stealing the thunder and some media attention from those fighting to become the next person to occupy the Oval Office.

Howard Kurtz of CNN's "RELIABLE SOURCES" reports.



ALAN KEYES (R), PRESIDENTIAL CANDIDATE: Gary, Gary, the one problem...

TIM RUSSERT, MODERATOR: We've all -- we've all agreed that the candidates could have...

GARY BAUER (R), PRESIDENTIAL CANDIDATE: Listen to the moderator, Alan.

RUSSERT: We've all agreed the candidates would have a chance to question one another, just for the record, Mr. Bauer, if nothing is done, benefits must be reduced by a third or the tax is doubled in the year 2035.


KURTZ (voice-over): There were seven important people at the Republican presidential debate in New Hampshire last week: six candidates and NBC's Tim Russert.


RUSSERT: Would you appoint someone to the Joint Chiefs of Staff who openly advocated openly allowing gays to serve in the military?


RUSSERT: Would you appoint...

BUSH: I would appoint...

RUSSERT: Would you appoint an openly gay person to a senior staff or Cabinet position?


KURTZ: Russert's aggressive questioning even drew a rejoinder from Alan Keyes.


KEYES: ... and I begin to wonder when Mr. Russert will declare his candidacy.


KURTZ (on camera): In the flurry of debates in recent weeks, the personality of the moderator has often shaped the tone of the encounter. These are, after all, network extravaganzas, complete with big-shot anchors more prominent than some of the White House wannabes. And sometimes they can't help drawing attention to themselves, as NBC's Tom Brokaw did in Iowa.


TOM BROKAW, MODERATOR: Senator Hatch, why not have means testing for Medicare? Why should someone who earns my kind of income, for example, pay and get the same kind of coverage as a school teacher or someone who works on a farm here in Iowa?


KURTZ: ABC's Peter Jennings took a more self-effacing approach last week in New Hampshire, often keeping his questions short and to the point.


PETER JENNINGS, ABC ANCHOR: Mr. Gore, in this campaign, there have been some questions on occasion on who you are.


KURTZ: Other moderators have used subtlety to drive home a point. Fox's Brit Hume didn't ask George W. Bush about the chatter that he lacks the intellectual capacity to be president. Instead, Hume took this approach in New Hampshire.


BRIT HUME, FOX NEWS: Can you tell us, sir, what do you read every day?


KURTZ: And sometimes the audience just plain doesn't like the questions. That's what happened at Friday's GOP debate in South Carolina when MSNBC's Brian Williams asked Bush about the Confederate flag flying over the state capitol.


BRIAN WILLIAMS, MSNBC ANCHOR: It is, as you can hear from the reaction of tonight's crowd of 3,000 people from South Carolina, a hot-button issue here. The question is: Does the flag offend you personally?


KURTZ: No moderator worth his anchor-hair wants a boring debate. But Russert's dominating performance drew fire from "The Manchester Union Leader," which is backing Steve Forbes. The paper apologized for co-sponsoring the debate, saying Russert gave too much time to Bush and John McCain, though the air time turned out to be roughly even.

Russert makes no apologies for challenging the candidates, telling CNN: "You can have a staged infomercial if you like where each of the candidates can offer their canned responses and consultant- driven replies, you can have a journalistic even where you ask follow- up questions. It's imperative that we fulfill our role as journalists and press for specific answers."

There's nothing new about Major League network anchors firing provocative, controversial questions at candidates. CNN's Bernard Shaw did it to Michael Dukakis in a pivotal moment in a 1988 presidential debate.


BERNARD SHAW, CNN ANCHOR: Governor, if Kitty Dukakis were raped and murdered, would you favor an irrevocable death penalty for the killer?


KURTZ: And some local anchors serving as questioners are ready for their close-up.

At Friday's GOP debate in South Carolina, David Stanton of the local NBC affiliate tried the melodramatic approach with Gary Bauer.


DAVID STANTON, WIS-TV ANCHOR: Mr. Bauer, if someone in your family was raped and became pregnant and wanted an abortion, and after discussion with you they were adamant in their decision to have an abortion, would you support that decision or would you try to prevent it?


KURTZ: In case you haven't had your fill, there's yet another Republican debate tonight in Michigan, hosted by Tim Russert.


RUSSERT: I paid for this microphone, Mister.

SEN. ORRIN HATCH (R-UT), PRESIDENTIAL CANDIDATE: Well, let me tell you something...


KURTZ (on camera): In theory, at least, the debates are supposed to be about the candidates, but they are also television shows, with television stars and would-be stars trying to enhance their own reputation. Running for president these days means getting into the ring with millionaire anchors who pack a rhetorical punch.

This is Howard Kurtz of CNN's "RELIABLE SOURCES."


SESNO: And when we return, a four-time governor of Louisiana on trial for the third time in a very controversial career.

(COMMERCIAL BREAK) SESNO: Former Louisiana Governor Edwin Edwards went on trial today. The four-time governor is charged with manipulating the riverboat casino licensing process and accepting payoffs from friends and cronies seeking casino licenses. If found guilty, the 72-year-old Edwards could be sentenced to life in prison.

Edwards was tried twice on federal racketeering charges in the 1980s. The first trial ended in a hung jury; the second, in acquittal.

Nackey Loeb, who helped guide New Hampshire's largest newspapers, has died. Mrs. Loeb and her husband, William, bought "The Manchester Union Leader" and "New Hampshire Sunday News" back in the 1940s and turned them into two of the nation's most conservative newspapers. Mrs. Loeb dies Saturday with her family at her side. She was 75.

And that's all for this edition of INSIDE POLITICS. We'll see you again tomorrow when Candy Crowley will have a live report from New Hampshire, where John McCain will be outlining his tax plan.

And you can go online at -- all the time, rather, at CNN's for the very latest, and more, from the candidates and their campaigns.

I'm Frank Sesno. "WORLDVIEW" is next.


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