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Inside Politics

Al Gore Unveils Campaign Finance Reform Package; Politicians Enter the Fray Over Rising Gas Prices

Aired March 27, 2000 - 5:00 p.m. ET

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

(BEGIN VIDEO CLIP)

AL GORE, VICE PRESIDENT OF THE UNITED STATES: I understand the doubts about whether I personally am serious on campaign finance reform. I will try. Governor Bush will not.

(APPLAUSE)

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

FRANK SESNO, CNN ANCHOR: Al Gore takes on the campaign finance system, George W. Bush and his own tarnished image on the issue. Are some politicians getting even more pumped up about gas prices, even as OPEC oil ministers plan their next move? And one political problem keeps dogging Rudy Giuliani and his Senate bid, while another controversy apparently has been resolved.

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

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

Al Gore says his commitment to changing America's campaign finance laws is "both personal and profound." Few would argue that it is also political, a bow to the current climate on the presidential trail and to Al Gore's own vulnerabilities.

CNN's Patty Davis was in Milwaukee for the unveiling of Gore's new reform plan.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): Seeking to distance himself from questionable fund-raising activities in 1996 and shore up his credibility, Vice President Al Gore unveiled a new campaign finance reform proposal.

GORE: I know I am may be an imperfect messenger for this cause, but the real wounds will be to our democracy itself unless and until we address the problem. DAVIS: The problem, Gore said, big money and special interests' growing influence in politics. Gore called for an end to what he termed -- quote -- "this cancer on our democracy," vowing that he'd introduce the McCain-Feingold bill banning unregulated soft money on his first day as president.

GORE: I will lead. I will fight.

(APPLAUSE)

I will join with you and the grass-roots millions and Russ Feingold and John McCain and Bill Bradley and Jesse Ventura and grass- roots organizations to win the battle for campaign finance reform...

(APPLAUSE)

... and enact McCain-Feingold into law.

(APPLAUSE)

DAVIS: Under the proposal that would go into effect in 2008, Gore called for a $7 billion endowment to finance congressional elections. Candidates accepting the funding could not accept money from any other sources. Donors to the endowment could deduct 100 percent of their contributions. And television stations would be required to give all candidates free air time 30 days before the general election and equal air time to candidates that are attacked in so-called "issue ads."

Gore warned that Texas Governor George W. Bush would do nothing to reign in special interests and would preserve the status quo. But Bush and Arizona Senator John McCain aren't about to let Gore or the public forget about Gore's participation in a fund-raiser at this Buddhist temple and his money-raising phone calls from the White House in 1996.

Bush criticized Gore's proposal as -- quote -- "a taxpayer- financed government takeover of campaigns." Bush also said Gore needs to stop "withholding information about his own fund-raising excesses," comments echoed by McCain, who said the vice president needs to submit to -- quote -- "a complete and open investigation of 1996 campaign finance irregularities."

(on camera): The Gore campaign maintains the vice president's fund-raising activities have been thoroughly investigated by Congress and vows to push ahead making campaign finance reform a top priority.

Patty Davis, CNN, Milwaukee.

(END VIDEOTAPE)

SESNO: A statement from the Bush campaign today goes on to contend that the governor's own campaign finance plan is superior to Gore's. Bush would ban labor unions and corporations from donating so-called "soft money" to political parties, but he would allow it from individuals. He calls for "paycheck protection," requiring unions to get permission from members before using their dues for political purposes, which Gore opposes.

Bush proposes raising the $1,000 limit on individual contributions directly to candidates and requiring immediate disclosure of contributions over the Internet. Bush also would bar lobbyists from contributing to members of Congress when they're in session, which would still leave the door open for fund-raising on weekends or during the recess.

And now a closer look at the Gore fund-raising reform plan and some potential obstacles to it. For the nuts and bolts, we go to CNN senior Washington correspondent Charles Bierbauer.

(BEGIN VIDEOTAPE)

CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): Al Gore calls the $7 billion fund a "democracy endowment." He'd use the interest it earns to finance congressional elections starting in 2008. And where will it come from?

GORE: I will seek the help of every corporation, every union, every major foundation, every dot.com millionaire and billionaire, and every other citizen in the entire United States of America.

BIERBAUER: In other words, the same contributors who finance political campaigns now, but with one difference.

GORE: This is a nonpartisan endowment for our common democracy. You can't give, under this proposal, to any one party. You can't give to any one candidate.

FRED WERTHEIMER, PRESIDENT, DEMOCRACY 21: Certainly some groups who give money for the purpose of buying influence aren't going to find this attractive.

BIERBAUER (on camera): Contributions would be tax-deductible, costing the public $2.1 billion in lost tax revenue. And if the fund does not add up to $7 billion in seven years, Gore would require broadcasters to provide free air time to drum up the money.

(voice-over): The vice president's broader plan relies heavily on television and radio to give away air time they now sell profitably.

GORE: Every broadcaster should give every candidate for federal office five minutes of air time a night in the last 30 days before the general election.

BIERBAUER: In the 1996 campaign, television networks grudgingly gave presidential candidates limited free air time, but in a major media market that covers dozens of congressional districts, Gore's plan could amount to hours of political broadcasts every night.

SCOTT HARSHBARGER, PRESIDENT, COMMON CAUSE: The reality has been that TV broadcasters have refused this, even on a voluntary basis.

BIERBAUER: Gore says, if elected, the first bill he'll send to Congress is the ban on soft money Republican John McCain and Democrat Russ Feingold have tried unsuccessfully to push through the Senate. But the Republican majority in Congress shows no inclination to pass McCain-Feingold now.

SEN. ROBERT BENNETT (R), UTAH: I think there are solutions to this. They are not solutions that mean tramping on the Constitution and the First Amendment rights of groups to express themselves.

BIERBAUER: Republicans cite Supreme Court rulings that campaign contributions may be capped, but campaign spending is a matter of free speech. The vice president acknowledged he'd have to overcome his own fund-raising history to sell this plan, but reform advocates say it would help to have a president of either party actually committed to changing things.

Charles Bierbauer, CNN, Washington.

(END VIDEOTAPE)

SESNO: Well, as we've mentioned, Gore says his fund-raising history prompted him to take up the banner of reform.

Our Bill Schneider has been thinking about Gore's motives and his timing -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Why is Al Gore talking about campaign finance reform? Not many Americans are interested in the issue. It's a subject on which he lacks credibility, and he's talking about it at a time when very few people are paying attention to the campaign. Exactly. Those are the reasons why he is talking about it.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's called inoculation. Gore knows that the most damaging issue George Bush can raise against him is his involvement in the 1996 campaign fund-raising scandal. Bush knows it, too. In fact, he's already pounding Gore on the issue.

Take this...

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: It started with making phone calls out of the office, phone calls that he evidently claimed he didn't know about because he happened to have drunk too much iced tea one day.

SCHNEIDER: ... and that.

BUSH: After all, it was not all that long ago that he went to a Buddhist temple to raise money and one of his close friends was indicted and convicted of fund-raising excesses.

I think the vice president is somebody who will say anything to get elected.

SCHNEIDER: ... and this. BUSH: He must think American has got amnesia. He must think we forgot.

SCHNEIDER: Sooner or later, Bush will ask Americans: Do you want another president who is under investigation for wrongdoing? Or do you want to end this nightmare?

Most Americans do not find Gore very credible as a reformer. For Gore now to clothe himself in the mantle of reform is a brazen tactic. What makes him think it will work?

Several things. One is the fact that people don't find Bush, $70 million man, very credible as a reformer either. That certainly was the case among California primary voters this month. McCain has more credibility than either of them, although even in McCain's case California voters had some doubts.

These men are all professional politicians, remember.

Gore certainly understands his vulnerability. In fact, he claims it enhances his credibility on the issue.

GORE: I know first-hand what is wrong with the way we fund political campaigns.

SCHNEIDER: He got in trouble because we have a bad system. Has anyone ever gotten away with such a claim? Sure. John McCain.

(BEGIN VIDEO CLIP, FEBRUARY 8)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: My involvement with the -- quote -- "Keating Five" is very well-known. It was a three -- three-year investigation. But if you want to talk about my involvement in the Keating Five, don't you think it should be also revealed that I was found -- quote -- "guilty of poor judgment."

SCHNEIDER: So by getting out in front on this issue instead of hiding, Gore is staging a pre-emptive strike. When Bush goes after him now, Gore can claim: "I've made my proposal. Where's yours?"

GORE: Governor Bush is committed to defending the status quo.

SCHNEIDER: As someone once said, the best defense is a good offense.

(END VIDEOTAPE)

SCHNEIDER: Sure, Gore expects to hear howls of derision from Republicans who claim he has no standing to talk about campaign finance reform, but Governor Bush isn't saying very much about it. Gore is betting that voters will favor a flawed advocate over someone who doesn't have too much to say about the issue -- Frank.

SESNO: Politicians are very smart and they target their message very deliberately. Who is this supposed to affect or impress the most? SCHNEIDER: Well, it's really supposed to inoculate. It's not supposed to give him an issue to run on. It's supposed to give him some defense on the issue so that when Bush goes after him, Gore will be able to say: "Wait a minute. I have a plan, I've put it out there. Where's your plan? I have something I'm proposing to do." That way he won't have to keep defending his record.

I think it's just basically aimed at the electorate as a whole so that he can get on to the agenda that he really wants to talk about.

SESNO: Bill Schneider, thanks.

Well, let's talk about campaign finance reform and now Gore's new plan with Representative Marty Meehan, Democrat of Massachusetts, who has endorsed Al Gore. He joins us from Boston.

Good to see you.

REP. MARTY MEEHAN (D), MASSACHUSETTS: Nice to be here, Frank.

SESNO: And Bush campaign senior adviser Ari Fleischer. He joins us from Austin, Texas.

Ari Fleischer, good to see you as well.

ARI FLEISCHER, BUSH CAMPAIGN SENIOR ADVISER: Thank you, Frank.

SESNO: Let me start with both of you with the same simple -- fairly simple question, picking up on what Bill Schneider was just saying: Does this plan somehow inoculate Al Gore against allegations of his own campaign fund-raising abuses.

Congressman Meehan, let's start with you.

MEEHAN: Well, whether it does or not means little to me. The question is whether we're going to get campaign finance reform.

I've been fighting for the last six years in a bipartisan way with Chris Shays, Republican from Connecticut, to pass campaign finance reform. Al Gore supports that legislation, will sign that legislation. Now he has a furthermore comprehensive piece of legislation that I would support as well.

So the question for me is which president -- which person as president would sign a campaign finance reform bill and work with us to change this corrupt system. Al Gore will, and George W. Bush is against it. In fact, The New York Times today called George W. Bush's proposal a "toothless sham."

SESNO: All right. Well, before we go on to toothless sham or otherwise, Ari Fleischer, what about this notion of inoculation? I ask the question not to be ridiculous or superficial, but this is a legitimate issue as to who stands for what and how serious they are on the campaign.

FLEISCHER: Well, I think it is evidence, Frank, that the vice president will say anything to get elected. You know, I brought with me today a copy of "Putting People First," which was Al Gore and Bill Clinton's campaign manifesto from the 1992 campaign. He said all these same things back then. He committed to them in writing back then: said that he wanted to eliminate soft money, said that he wanted to reduce the cost of advertising. And he didn't do any of those things, even when he had a Democrat Congress in '93 and '94.

Now, that's the problem we have with politicians like this. They say it when it's opportune, but they really don't mean. If he had meant it, he would have done something while he had a chance.

SESNO: Hypocrite?

FLEISCHER: No, I just think it rings hollow, Frank. I think it's the kind of thing politicians when they're up for re-election like Al Gore, he says these things. You know, he did devote a lot of his energy to asking for more phone calls to make while he was in the White House as the vice president, but he didn't devote his energy to convincing the president to submit a campaign finance reform plan.

Where has he been for these last six years? Again, he wrote these down in "Putting People First," the '92 campaign manifesto, but did nothing back then. It's kind of a quadrennial promise the vice president seems to make.

SESNO: Marty, your response to this. Go ahead.

MEEHAN: I have to respond to that. That is absolutely ridiculous. I have sat at the White House with Vice President Gore working on campaign finance reform at several points over the last four years. We have a president that has said he would sign the bill. So to say that Al Gore hasn't supported campaign finance reform -- in fact, he's challenged vice president -- or former president -- Mr. Bush in this campaign. He's challenged him.

Let's abolish soft money. If you agree not to use soft money, I'll agree not to use soft money, and we'll eliminate television ads. We'll have debates twice a week.

So why doesn't George W. Bush accept that challenge? And the other point I would make is why it's important whether a president will sign campaign finance reform is the last time the Congress passed a campaign finance reform bill, sent it over to George Bush, all he had to do was sign it. Instead, he vetoed the bill.

SESNO: Ari Fleischer?

FLEISCHER: Well, Frank, we do think we should abolish soft money. The governor has a plan -- he announced it in February -- that would abolish all corporate soft money, that would abolish all union soft money. We need to have and we should have campaign finance reform, and importantly, we can do so without creating taxpayer- financed elections or to have a government takeover of campaigns, which would decide how much money each candidate gets to spend (UNINTELLIGIBLE). SESNO: I want to pick up on that point with Congressman Meehan if I may, this notion of a government takeover. This is very important. Vice President Bush (sic) is saying essentially, let's have a $7 billion endowment, he calls it, which will disperse money to federal candidates. Now, Governor Bush says this amounts to a federal takeover.

Isn't there a point to that, that this is some government or quasi-government agency that's going to be doling out money?

MEEHAN: There's no point at all. The cleanest way to have an election is to have money that doesn't come from special interests. And frankly, the taxpayers would save an enormous amount of money by a system like this, which would ensure clean elections, that the election process won't be corrupted by special interests. And it means that when it came time to get a health care bill passed or when it came time to pass tobacco legislation to protect America's children, the special influence of money wouldn't have that corrupting influence. I think in the long run it's a much better system.

FLEISCHER: But congressman, let me bring up a very troubling aspect about that. When you replace an individual's free decision about who they want to give their money to and therefore how much spending can be done by that candidate, you create a situation where somebody, for example, a David Duke, a former member of the KKK running in Louisiana, is entitled to millions of dollars of taxpayer money. If he ran against John Breaux, for example, he would receive equal financial support that John Breaux receives. Would you support giving David Duke taxpayer-financed money?

MEEHAN: I would support candidates who are legitimate candidates...

FLEISCHER: OK. So there you're going to start drawing up a list who can and can't get this money.

MEEHAN: Hold on.

(CROSSTALK)

FLEISCHER: ... government takeover of campaigns.

MEEHAN: No, you don't -- you set up a standard.

FLEISCHER: Somebody in the government will be responsible for deciding who gets it.

MEEHAN: It's not a government take -- would you let me answer? Would you let me answer? Look it, you set up a threshold for candidates. Those candidates who are legitimate, serious candidates have an opportunity to get public funding. I think the system is better served if there are limits on how much money people can spend.

George W. Bush has broken every campaign finance record in the books by being -- raising more money than anyone in history. After this election is over and unless George W. Bush agrees to limit how much money he takes from soft money, we're going to double the soft- money figures in this campaign.

The -- it has a corrupting influence on how decisions are made in Washington, and we need a president that is willing to stand up and change this corrupt system.

FLEISCHER: We need to ban soft money, but we don't need a system that has welfare for politicians where politicians are entitled to taxpayer money...

MEEHAN: That's not what this proposal includes.

SESNO: Gentlemen...

(CROSSTALK)

FLEISCHER: ... decide to run for office. That's not the way our democracy works.

SESNO: If I may, this proposal and this issue becomes a starting point, not an ending point. So I appreciate your early input and your early feedback on this. Thanks to you both.

MEEHAN: Thank you, Frank.

FLEISCHER: Thank you, Frank.

SESNO: Thank you.

Well, even as Al Gore tries to inoculate himself on campaign fund raising, if in fact that is what he is doing politically, his past does keep coming back to haunt him.

House Government Reform Committee Chairman Dan Burton has asked Attorney General Janet Reno to appoint a special counsel to investigate the case of the missing White House e-mails. Many involve, or are believed to involve, Vice President Gore and possible campaign-finance matters. Burton argues that the Justice Department, which is conducting its own investigation of the e-mails, has a conflict of interest.

A federal judge stepped in today to settle at least part of the Reform Party family feud. U.S. District Judge Norman Moon has ruled that Pat Choate, who served as Ross Perot's vice presidential running mate in 1996, is the legitimate chairman of the Reform Party. Choate was named chairman last month after Reform Party members deposed Jack Gargan at a rowdy meeting in Nashville, Tennessee. Gargan had been chosen by Minnesota Governor Jesse Ventura to lead the party, in part to wrest control from Perot loyalists, and Ventura has since left the party himself.

In a two-day hearing last week, Gargan argued his removal from office at the national meeting was illegal while Choate said Gargan's effort to hang on to the chairmanship was costing the party credibility with voters. By ruling Gargan's ouster as legal, Judge Moon gave Choate full claim over both the party chairmanship and the $12.6 million in federal funds the party is eligible to receive for the 2000 election.

And coming up on INSIDE POLITICS, OPEC oil ministers and the cry heard around the world from angry motorists: increase production, lower costs. But will it happen, and if it does, will it cool the simmering political issue of rising gasoline prices?

(COMMERCIAL BREAK)

SESNO: With oil prices at the highest levels in nine years, oil ministers from the Organization of Petroleum Exporting Countries met in Vienna today with their sights on increasing production. An agreement on boosting output is expected, but just what that amount will be remains the subject of some debate among OPEC members.

CNN's Wolf Blitzer joins us now from Vienna with details.

Wolf, what, if anything, was accomplished today that we know about?

WOLF BLITZER, CNN CORRESPONDENT: The 11 members of OPEC, they had full meetings today privately. They met before the cameras. They had their photo opportunities. They did not reach a final agreement on increasing oil production, though one is widely expected to emerge at some point tomorrow.

This has been a very, very difficult decision for these politically disparate members of OPEC. Some like the Saudis, the Kuwaitis, they're ready for a significant increase, perhaps 1.7 million barrels a day in extra oil production. But the Iranians, the Libyans, others here are strongly opposed. They're ready perhaps to go up to a million or even a million two. But there still is a significant difference over the way that would be phased in even if they split the difference.

What has to emerge by all accounts is there has to be a consensus so there's no bitterness, no acrimony here. Otherwise, these 11 members will leave and they will begin to cheat as far as their oil production levels are concerned and that could significantly drop, reduce the price of a barrel of oil, which has tripled over the past year from about $10 a barrel to more than $30 a barrel, right now in the high 20s. What they would like to see it eventually settle around $25 a barrel.

But I have to advise everyone, if they anticipate that an agreement here will in the short term result in the significant reduction in the price of a gallon of gasoline in the United States, that's simply not going to happen unless this consensus here completely falls apart and these 11 members of OPEC emerge and go ahead and cheat on their oil production limits.

SESNO: Wolf, the Clinton administration has been feeling the heat of higher oil prices. Just in a few moments we're going to talk with Gerry Seib of "The Wall Street Journal," who wrote about politics and oil prices, gasoline prices, just today.

But what is it that the Clinton administration wants from a practical and political point of view out of this meeting?

BLITZER: They would have liked, the Energy Secretary Bill Richardson, at least 2 million barrels a day in extra oil production. Although, I think everyone in Washington will breathe a sigh of relief if they can emerge with about 1.7. They want to see the price of oil, price of gasoline in the United States go down in the coming months.

This is a politically charged issue, especially in an election year. As a result, there has been some not-so-subtle pressure on friendly OPEC members like the Saudis and the Kuwaitis to go ahead and push for a significant increase.

And as far as the not-so-friendly OPEC members like the Iranians and the Libyans, there have been some signals over the past few weeks which many observers here do not believe are coincidental, signals to the Libyans, for example, there could be American tourism in Libya. Signals to the Iranians that there will be trade sanctions and easing of those trade sanctions with Iran, trying to show that if the Libyans and the Iranians work with the Saudis and the Kuwaitis to increase oil production there could be some benefit for them down the road as far as U.S. relations with those countries are concerned.

SESNO: All right, Wolf Blitzer, thanks very much, joining us from Vienna, Austria.

And a programming note for you, Wolf will be back on "THE WORLD TODAY," anchoring -- co-anchoring that program out of Vienna to bring you much more on that special OPEC meeting that's tonight 8:00 p.m. Eastern Time.

And joining us now to talk about the impact of rising gasoline prices on campaign 2000 is, as advertised, "Wall Street Journal" reporter Gerald Seib. Gerry, good to see you.

GERALD SEIB, "WALL STREET JOURNAL": Thank you.

SESNO: All right, you wrote today, gasoline prices rise as a political issue. Seeing it far and wide?

SEIB: Yes -- I mean, more and more, states like Virginia, Montana, Michigan, all over the country people are starting to pop up raising this as an issue. In the last week or so, J.C. Watts, a Republican leader in the House, Tom Davis, a leader of the Republican Campaign Committee in the House, have both told their members, raise this as an issue, go to gas stations, hold rallies, complain of what Democrats have done to stop OPEC from increasing prices and from failing to make gasoline prices an issue before this.

SESNO: You pointed to a Web site of George Allen from Virginia, right?

SEIB: Right. That's the hottest race probably where this has come up, George Allen, former governor of Virginia, running against Chuck Robb, an incumbent Democrat. Chuck Robb, unfortunately perhaps, some years ago offered a bill that would have attached a 50-cent-a- gallon gas tax to the current federal excise tax from gas. The campaign of George Allen has seized on that, is really hitting away on it big time. On their Web site they have a computerized graphic up there that tells you how much more your tank of gas would have cost today if that gas tax had gone into effect.

SESNO: All right, so here's what the Republicans are doing. How defensive are the Democrats?

SEIB: Well, the Democrats are vulnerable obviously because they're in power in the White House and they're vulnerable because this has snuck up on consumers and on voters. I think their response is going to be that this is going to get better. The OPEC meeting is probably going to change that.

And one of the things Republicans want to do is roll back gas taxes. What Democrats can say is if you roll back gas taxes, that's going to take money out of the pipelines to fix roads. You might not like expensive gasoline, but you really don't like clogged roads, and if you take the gas tax and roll them back, you're going to have clogged roads and potholes, and you don't like those anymore than you like high gas prices.

SESNO: All right, let's really be counter intuitive here for a moment.

SEIB: OK.

SESNO: And let me ask you, are there politicians out there that you have heard of who are saying, hey look, America, you're fat and happy, the gasoline is cheaper than it has been in a long time, even with these increases adjusted for inflation, time to look at alternative sources of energy and the like?

SEIB: Oddly enough, I haven't heard that refrain yet. I think that you probably have some people who will say, look, let's be responsible, let's be reasonable. We have been overconsuming. Gas prices at 99 cents a gallon, which is what you were seeing earlier this year, is not a realistic level.

So a little bit of an increase in the price of gas isn't such a terrible thing considering what the United States has gone through. I think that, that is a response that Vice President Gore, for example, may very well come around to. At this point, I think Democrats are just back on their heels a little bit on this issue and they haven't figured out what their response is.

SESNO: The alternative fuels issue, though, is one that is given some resonance by these turn of events.

SEIB: No, exactly. And you'll see Vice President Gore talking to the big three automakers I think as early as this week, talking about exactly that, efforts the federal government has been making and is continuing to make to push alternative-energy cars, cars that don't run necessarily on gasoline, things the big three auto companies would like to do on their own anyway.

SESNO: Well, and not Democrats only. You cited that Jay Markus (ph), a Republican in Iowa.

SEIB: Right, exactly. In Iowa, if you're a Republican, you can say, look, this isn't all bad. This will increase the use of ethanol, which is a corn-based fuel additive that happens to benefit the people in Iowa quite a lot. So there are different variations on this theme.

I think the interesting thing politically right now is that people are paying attention to gas prices. They have noticed, obviously, but they're not really angry about it yet. I think Democrats are going to be in trouble if people get angry about gas prices and we're really not there yet as a political matter.

SESNO: And is the anger spurred, do we think or do experts think, by the prices or the supply?

SEIB: The supply would be a much bigger problem. I mean, America is...

SESNO: You're standing on lines, you don't like it.

SEIB: Exactly. And Americans are not -- know they're not -- they're in economic good times. So they're willing to pay a little bit more, they may grumble about it, but they're not going to be angry about it. If there were a supply problem, that would be, I think, politically much more sensitive. We'll get to June in California and see if that's an issue, and then I think you'll know exactly how potent gas prices are going to be.

SESNO: One interesting little twist as we think about this -- we always like to slice the electorate up. It's those who -- what I -- from what I understand of the marketing figures, those who drive these big expensive gas-guzzling SUVs are much wealthier than others, they can absorb some of these price shocks.

SEIB: Yes, but you know, there is an interesting -- Spence Abraham, who is running for the Senate in Michigan, who is running against Debbie Stabenow, a Democrat, has started to use this issue in the last few days and he is going after suburban moms, saying the suburban moms who are driving those SUVS, they're the ones who are going to get hit most by gas prices, and it's because the Democrats were asleep at the switch, they've been environmental extremists and have kept oil drilling down in the U.S. So he's going after exactly those people and saying, look, you are being hurt by this and it's the Democrats' fault. It's an interesting attack and we'll see if it works?

SESNO: Well, Jerry, thanks for biking over here today.

JERRY: Exactly.

SESNO: Appreciate it.

Well, there's much more ahead on "INSIDE POLITICS." Up next: the New York Senate race and the art of a new deal reached by Mayor Rudy Giuliani.

Plus, Chuck Robb, endangered Democrat? We'll discuss the senator from Virginia's obstacles to re-election. And later...

(BEGIN VIDEO CLIP)

HOWARD KURTZ, CNN CORRESPONDENT: Elbowed out of the spotlight, the president embarked on a course familiar to many fading celebrities.

(END VIDEO CLIP)

SESNO: Howard Kurtz, on Mr. Clinton's made-for-TV comeback.

(COMMERCIAL BREAK)

SESNO: We'll have more of the day's political news coming up. But now, a look at some other top stories this day.

President Clinton is urging Russia's president-elect to stay the course of Democratic and economic reforms. Vladimir Putin, who has been acting president since December, won last weekend's election with 52 percent of the vote.

CNN's Steve Harrigan has reaction from Moscow.

(BEGIN VIDEOTAPE)

STEVE HARRIGAN, CNN CORRESPONDENT (voice-over): Carving the wax figure of the next Russia president began weeks ago. The artist knew who would win but he has little sense of who the winner is.

UNIDENTIFIED MALE (Through Translator): I know more he about the Ivan the Terrible than I do about Vladimir Putin. Mr. Putin joins a line of figures: some great, some terrible who have ruled Russia from the Kremlin. He got there not by birth or revolution or coup like the rest but through a western style Democratic election, or so it seems.

UNIDENTIFIED FEMALE (Through Translator): There was never any choice, Yeltsin picked him and served him up to us on a platter. The other candidates were just there for a show.

HARRIGAN: But Mr. Yeltsin had picked others before, young reformers who would carry on his legacy. None of them took with the people until Mr. Putin.

These grandmothers and mother's say they do know who their president is.

UNIDENTIFIED FEMALE: He is tough and I think this is -- it is the thing that we need in this country at the moment, some toughness.

HARRIGAN: A vote for toughness in the hope the next generation will be better protected than they were.

Steve Harrigan, CNN, Moscow.

SESNO: To another major story internationally: The custody battle over Elian Gonzalez which may be coming to a head. His Miami relatives today answered a government deadline to speed up their appeals. However, the Justice Department says the relatives did not fully comply because they did not agree to give up Elian if they lose. So it's not clear whether the government will take custody of the boy on Thursday with the intent of sending him back to Cuba. His U.S. relatives want an asylum hearing.

(BEGIN VIDEO CLIP)

LINDA OSBERG-BRAUN, GONZALEZ FAMILY ATTORNEY: The INS has placed us in a untenable position and they have given us two ultimatums. The ultimatums place us in a position where we have to choose between Elian Gonzalez's very valuable appellate rights and a winning appellate brief verses picking Elian up and taking him away to Cuba, which we all know will obliterate his appellate rights and the United States doesn't have the power to ever get him back.

SESNO: Last week, a federal judge affirmed an INS ruling that the boy be returned to Cuba.

And when INSIDE POLITICS returns: ups and downs for Rudy Giuliani, including a funeral that has not helped.

(COMMERCIAL BREAK)

SESNO: To the New York Senate race now in the political trials and tribulations of Republican Rudy Giuliani. First, an announcement today of a settlement in the mayor's dispute with the Brooklyn Museum.

As you may remember, an exhibit featuring a controversial painting of the Virgin Mary last fall prompted Giuliani to withhold the cities monthly payments to the museum. The dispute wound up in court. Now, both the museum and the city have agreed to drop their separate legal actions against one another. Both sides defended their reasons for suing in the first place.

(BEGIN VIDEO CLIP)

FLOYD ADAMS, BROOKLYN MUSEUM ATTORNEY: A loss would have validated the efforts of a mayor to bully a museum and to canceling an art exhibition and then to cripple it for not doing so.

MICHAEL HESS, NEW YORK CITY ATTORNEY: The issue of whether taxpayer's money needs and should be used for a religious bashing kind of exhibit like that is a legitimate legal issue to be litigated.

(END VIDEO CLIP)

SESNO: The settlement protects the cities government from $7 million yearly subsidy of the Brooklyn Museum and it forces the city to suspend its effort to evict the museum from the city-owned building it leases.

Another matter hanging over Giuliani's Senate bid has not been settled, at least not politically. The fallout from a controversial police shooting intensified over the weekend. We get that story from CNN's Frank Buckley.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): It began as a funeral mass for 26-year-old Patrick Dorismond, the off-duty, unarmed security guard shot to death by New York City police during an undercover drug operation. But it turned into a melee, with some in the crowd bombarding police with bottles. Twenty-eight officers were injured; five civilians were hurt; 28 people were arrested.

MAYOR RUDY GIULIANI (R), NEW YORK: I'm glad the police were able to arrest so many of them. I'm very, very glad that the police handled it in a very professional and restrained way.

BUCKLEY: But political opponents criticized Giuliani for blaming the disturbance on what the mayor called "demagogues."

REV. AL SHARPTON, NATIONAL ACTION NETWORK: I think rather than he continue to scapegoat, if he has evidence of people that were responsible, as he said, he ought to name them so that we can deal with them. Or he ought to admit that rather than deal with the issue, he turns everything into a political contest with his critics.

BUCKLEY: Since the shooting, critics have complained about Giuliani's response, especially the release of Dorismond's criminal history. Among those who have questioned the mayor's actions: his opponent in the Senate race, first lady Hillary Clinton.

HILLARY CLINTON, FIRST LADY OF THE UNITED STATES: He has led the rush to judgment. That is not leadership.

BUCKLEY: And while Giuliani was greeted with enthusiasm Sunday at a parade in New York, the mayor may be suffering politically from his handling of the shooting.

ESTER FUCHS, COLUMBIA UNIVERSITY: There is no question that his reaction to the Dorismond shooting has really been detrimental to his Senate campaign.

GIULIANI: So be it. I believe that I'm handling it correctly.

BUCKLEY (on camera): And Giuliani shows no signs of changing his response or softening it in an attempt to win back potential voters, saying instead that in the long term his handling of the case will be vindicated by the facts.

Frank Buckley, CNN, New York.

(END VIDEOTAPE)

SESNO: And Giuliani took his own swipes today against likely Senate rival Hillary Rodham Clinton. He charged that Mrs. Clinton's endorsement by a labor union-backed third party is proof she is a candidate of the far left. The first lady won the backing last night of the Working Families Party which was created in 1998 to help the push the Democratic Party toward the left.

When we return, Charles Robb and George Allen put on the gloves and enter the ring in the Virginia Senate race. We'll have that story after this.

(COMMERCIAL BREAK)

SESNO: Charles Robb made it official over the weekend: He wants to keep his Senate seat. The two-term Democrat from Virginia declared himself a battle-tested campaign veteran. And he wasted no time in taking shots at his Republican opponent, George Allen, for favoring -- quote -- "sound bites and distortion."

(BEGIN VIDEO CLIP)

SEN. CHARLES ROBB (D), VIRGINIA: If you want someone who'll fuel the fires and fan the flames of partisan gridlock, than I'm clearly not your man. But if you share my beliefs and my goals for America, I hope you'll join this fight.

(END VIDEO CLIP)

SESNO: The Robb-Allen contest is expected to be one of the toughest Senate contests this fall.

Well, joining us now to talk more about the Virginia Senate race, Tyler Whitley of the "Richmond Times-Dispatch."

Good to see you.

TYLER WHITLEY, "RICHMOND TIMES-DISPATCH": Glad to be here.

SESNO: OK, just how tough, how nasty?

WHITLEY: I think it will get real nasty.

SESNO: Why?

WHITLEY: Oh, it's two evenly matched candidates. There is a lot at stake. They have already started trading blows. And I just think it's two real tough competitors. So I think it's going to get nasty before...

SESNO: You know, people all over -- people all over the country have been paying close attention to Rudy Giuliani and Hillary Rodham Clinton in New York, perhaps not in Virginia. So give us a little quick primer on the personalities and the issues at stake in this Virginia race: Chuck Robb and George Allen.

WHITLEY: Chuck Robb is the Washington insider: somber, serious man. Allen is kind of the amiable Reaganesque-type who enjoys campaigning and shows it.

SESNO: And Chuck Robb...

WHITLEY: And the issues will be taxes, education, the environment, and law and order.

SESNO: And Chuck Robb has had his own share of clouds and scandals in his career?

WHITLEY: Yes, he has. That was back in the late '80s. I think he probably overcame that in '94 with his Senate victory, and the Allen people say they have no intention of bringing that up.

SESNO: How much of an issue are the national parties and players going to make this Virginia contest?

WHITLEY: Oh, I think the Republicans hope the national parties try to make a big issue, because they can tie the national Democratic Party around Robb, and that would make it much harder for him to win. The Republican National Committee is devoting a lot of attention to Virginia, and this is the race that they see they can -- they think they can win, and it's going to be very closely watched.

SESNO: Is George Allen a new kind of -- a new kind of Republican?

WHITLEY: No, I think he's somewhat in the mold of the Republicans that were elected in the '94. He's tough, conservative, kind of a no- holds-barred type of fellow with, however, an amiable personality that kind of offsets that.

SESNO: And he's pushing for a tax cut, and to the extent that we're looking for barometers in this campaign season, are Virginians' attitudes toward tax cuts -- Allen's attitude toward tax cuts going to tell us something?

WHITLEY: Yes, I think it will. And I think they are going to fight very directly over tax cuts. Even today as Robb announced here in Richmond, he said, we don't need big tax cuts, they'd be bad for the economy. And Allen is pushing for hefty tax cuts.

(CROSSTALK)

SESNO: Well, Tyler, do you see anything in the public...

WHITLEY: ... stories in 1997 for Republican candidate for governor who proposed massive cuts in the tax on cars and they think that's a winning issue in Virginia.

SESNO: Yes. Do you see anything in the public or the polls that indicate that it's a winning issue or a grassroots issue in 2000?

WHITLEY: I haven't seen any polls on that issue yet.

SESNO: From what you're hearing from the political consultants and those who are out there on the streets, is there any indication that this one's really going to connect with the voters?

WHITLEY: Well, the Allen people certainly think it will because they don't shrink from it at all and they bring it up at every chance they can. And they've been hammering Robb over the past week for suggesting seven years ago that he would like to see the gasoline tax raised 50 cents a gallon over a five-year period. That got nowhere and Robb hasn't brought it up since. But they still think they can attach that big tax increase around Robb's neck.

SESNO: Tyler Whitley, "Richmond Post-Dispatch." Thanks much for your time, appreciate it.

WHITLEY: Glad to.

SESNO: Up next on INSIDE POLITICS...

(BEGIN VIDEO CLIP)

HOWARD KURTZ, CNN CORRESPONDENT: The president of the United States seemed to be on hiatus, at least as far as the media were concerned.

(END VIDEO CLIP)

SESNO: Not anymore he isn't. Howard Kurtz on why Mr. Clinton is back in the media spotlight.

(COMMERCIAL BREAK)

SESNO: And finally today, the mystery of the disappearing president. Not exactly, but until recently you had to look pretty hard to find Mr. Clinton getting big media play.

Howard Kurtz of CNN's "RELIABLE SOURCES" looks at why and why that is not the case now.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): For months, the news has been dominated by these guys and these guys. But now another politicians is making his media comeback. No, not this former talk show host, and not this ex- wrestler either. We're talking about Bill Clinton.

The president of the United States seemed to be on hiatus, at least as far as the media were concerned, during the primary slugfest among those who want his job. Even when reporters questioned Clinton, they tended to ask about those other candidates: his vice president and his wife.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Well, you know, now if I get into that, then you'll have me handicapping that debate last night.

KURTZ: Elbowed out of the spotlight, the president embarked on a course familiar to many fading celebrities: he got himself booked on TV. First he talked about gun control in a rare satellite interview on "The Today Show." Then he pursued the subject on CNN's "BURDEN OF PROOF."

(BEGIN VIDEO CLIP, "BURDEN OF PROOF") GRETA VAN SUSTEREN, CO-HOST: The vice president wants, or has suggested, that we have photo licensing. What is your reaction to that?

W. CLINTON: I think it's a good idea.

(END VIDEO CLIP)

KURTZ: Clinton also showed up on ABC's "This Week," where he was asked about a commercial in which Charlton Heston, president of the National Rifle Association, calls him a liar.

(BEGIN VIDEO CLIP, "THIS WEEK")

W. CLINTON: I don't think it will wash with the voters, even with Moses reading the script.

(END VIDEO CLIP)

KURTZ: Clinton began speaking out on other high-profile issues, including rising oil prices.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE ANCHOR: The president is calling on Congress to create an emergency reserve and other measures aimed at easing the price and the supply crunch.

(END VIDEO CLIP)

KURTZ: At the start of his first term, Clinton seemed to be everywhere -- talking about health care with Ted Koppel; chatting with Larry King; revealing his underwear preference on MTV.

(BEGIN VIDEO CLIP)

W. CLINTON: Usually briefs.

(END VIDEO CLIP)

KURTZ: But the president did virtually no interviews during the Monica Lewinsky scandal and his subsequent impeachment ordeal. Now the game plan has changed. Any American president, even the lame-duck variety, draws major coverage by boarding Air Force One and hitting the international road.

(BEGIN VIDEO CLIP, "CBS EVENING NEWS WITH DAN RATHER")

DAN RATHER, ANCHOR: President Clinton made a pilgrimage of his own today with daughter Chelsea to the Taj Mahal.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BOB KUR, NBC CORRESPONDENT (on camera): The president believes it was important to come here just to keep lines of communication open with Pakistan's military ruler.

(END VIDEO CLIP)

KURTZ: And before returning home Sunday, he tried once again to play peacemaker in the Middle East.

(on camera): Barring an unforeseen crisis, the current occupant of the Oval Office will again be relegated to the sidelines when the presidential campaign heats up this summer, but Bill Clinton has a mighty megaphone and he knows how to use it. He may even try to keep on using it after he leaves here on January 20, 2001.

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

(END VIDEOTAPE)

SESNO: And that is it for this edition of INSIDE POLITICS.

We'll see you again tomorrow, when Jonathan Karl will be on the campaign trail with Governor George Bush at an education policy speech in Reston, Virginia.

And, of course, you can go online all the time at CNN's allpolitics.com.

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

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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