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Inside Politics

Gore Talks Up New Retirement Savings Plan; Lenora Fulani, Pat Buchanan Part Ways; Will Gas Prices Fuel a Political Backlash?

Aired June 19, 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've always encouraged individuals to invest in the stock market and to save. The difference is this: I protect Social Security.

(END VIDEO CLIP)

BERNARD SHAW, CNN ANCHOR: Al Gore talks up a new plan designed to fatten the nest eggs of future retirees and to one-up George W. Bush.

(BEGIN VIDEO CLIP)

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: First the stock market was roulette and risky, and now the heat's on and he changes position.

(END VIDEO CLIP)

SHAW: Also ahead:

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The '70s had consequences, too, car pools, smaller cars, the 55-mile-an-hour limit.

(END VIDEO CLIP)

JUDY WOODRUFF, CNN ANCHOR: The angst over current gas prices causes Bruce Morton to have a flashback.

SHAW: And some folks said it wouldn't last -- and it has not. We'll ask Lenora Fulani and Pat Buchanan about their political parting of the ways.

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

WOODRUFF: Thank you for joining us.

When Al Gore unveils his new retirement savings plan in Kentucky tomorrow, he no doubt will be hoping voters view it as the best of both worlds, an opportunity for private investment without the risk he claims George W. Bush's proposal would pose for Social Security. The Gore plan clearly is a response to Bush, as well as the growing budget surplus.

(BEGIN VIDEOTAPE)

GORE: The gang's all here.

WOODRUFF (voice-over): Al Gore's latest offering, a program to help low- and middle-income Americans build retirement funds on top of their Social Security.

GORE: People are going to like it. It does not put the Social Security fund at risk. It doesn't put the trust fund into the marketplace. It keeps the trust fund protected. Social Security's always going to be there. I'm not going to let it be touched.

WOODRUFF: Gore's retirement savings-plus would cost $200 billion over 10 years. It would work a lot like traditional employer 401(k) plans that match workers' contributions.

But Gore's plan is more generous than most. Lower-income Americans, earning up to $15,000 and couples up to $30,000 a year, would get a three-to-one match. For every dollar you put, in the government would kick in three more, up to $2000 a year total per person. The better off you are, the less you get, so that an individual earning $50,000 a year would get just one federal dollar for every three they put in.

The money would go into private investment accounts, including stock funds. The Gore campaign says that in 35 years, an individual could build up a $200,000 nest egg.

The George W. Bush campaign suggests that Gore's support for private investment flies in the face of his earlier criticism of Bush's plan to allow workers to put a portion of their Social Security contributions into stocks.

GORE: You shouldn't be asked to play stock market roulette with your retirement savings in the Social Security program.

WOODRUFF: A contradiction?

GORE: Not in the least. What I criticized was investing Social Security trust fund money in the stock market. I think that's a huge mistake. I've always encouraged individuals to invest in the stock market and to save. The difference is this: I protect Social Security.

WOODRUFF: Despite Gore's attacks, Bush's partial privatization of Social Security has proved popular, enjoying majority support in every age group but one: Americans 65 and over.

The Gore private investment plan is designed to appeal to younger Americans who are comfortable with the markets, without scaring off seniors who don't want Social Security touched. (END VIDEOTAPE)

SHAW: Though George W. Bush's theme of the day was education and technology, he made a point of responding to the Gore retirement plan, framing it as another commentary on his rival's leadership skills.

Our Candy Crowley is with Bush in Washington state.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): George Bush sees Vice President Gore's retirement plan as another example of a man chasing polls and focujs groups.

BUSH: First the stock market was roulette and risky, and now the heat's on and he changes position. What America wants is somebody that's going to stay steady when it comes to public policy, and that's the kind of leadership I'll provide.

CROWLEY: Bush's Social Security proposal, unveiled more than a month ago, has been attacked by Gore as a threat to the retirement fund. But the polls show the Bush plan is popular, and it has quickly become, along with education, a mainstay of the governor's election effort.

Bush was in Vancouver, Washington, Monday with a modest proposal enhancing high-tech teaching. He called for more flexibility and less paperwork in current federal programs that help bring high-tech to the classroom. At the same time, Bush noted that the issue is not cyberspace and computer chips but education.

BUSH: There's a way to say that the goal ought not to be, you know, how many classrooms are wired. The goal is how are we effectively teaching children? My whole presidency will challenge process and focus on results.

CROWLEY: Bush proposed new money for programs that teach teachers how to use computers to improve education, with particular emphasis on at-risk children. The true divide, says Bush, is not just digital access, it's educational achievement.

(on camera): As notable as what he had to say was where Bush had to say it. Washington state has been reliably Democratic in recent presidential elections, but an April poll shows a dead heat here. At the very least, if Bush can force Gore to spend money in Washington state, it is money he is not spending in the electoral rich battlefields of the Midwest.

Candy Crowley, CNN, Vancouver, Washington.

(END VIDEOTAPE)

SHAW: Joining us now, Bush economic adviser Larry Lindsey.

What's the difference between the Gore plan and your man's plan? LAWRENCE LINDSEY, BUSH ECONOMIC ADVISER: The main difference is Governor Bush's plan saves Social Security. Al Gore's plan does nothing to save Social Security. It still is going to fall short. According to current law, we're still going to have a 30 percent cut in benefits under Al Gore's plan, not under George Bush's plan. Al Gore just left Social Security alone, and the actuaries say Social Security is going to go bankrupt.

SHAW: Are you saying that Governor Bush's plan does not reduce benefits?

LINDSEY: Governor Bush's plan is intended to shore up the Social Security system, to make sure that retirees, young people like you and me, Bernie, will have money there when they come to retire. The actuaries, General Accounting Office, the Congressional Budget Office, have all looked at the plan that Al Gore is proposing. They said it does nothing to save Social Security, and that's the fundamental problem here.

SHAW: That wasn't my question. I'm saying to you, are you, Mr. Lindsey, saying that Governor Bush's Social Security plan will not reduce the level of benefits?

LINDSEY: Under Governor Bush's plan, the retirees -- first of all, current retirees have nothing -- will be totally unaffected by what Governor Bush is proposing.

SHAW: Current retirees?

LINDSEY: Current retirees. Similarly, people near retirement will be totally unaffected by Governor Bush's plan.

What is being debated here is what is going to fund the retirement benefits of people who are younger, who are not now near retirement? And the combination of the personal accounts that will be within the Social Security system that Governor Bush is proposing and the current system, the benefits promised in the current system, will be at least as much as what people are now being promised.

SHAW: The dollar figure in the current benefits being promised would be reduced under your man's plan, would they not?

LINDSEY: No, there are six different plans that are out there, that have all been scored by the Social Security actuaries as solving the Social Security shortfall. Al Gore's plan is not one of those six. These include Pat Moynihan's, Bob Kerrey's, Bill Archer's, a whole variety of plans. Each one of them deals with the question you're asking in a slightly different way...

SHAW: OK, what I was...

LINDSEY: ... But according to the actuaries, under all of those plans, young -- people who are now young, when they retire, will still get the same kind of benefits.

SHAW: "Kind," but I'm asking you about dollar amount? LINDSEY: The chances are the dollars will be higher. We don't know how much higher, Bernie. There's no way. It depends on the stock market performance, and frankly it depends on the economy's performance...

SHAW: OK.

LINDSEY: ... because Social Security's performance is tied to the economy's performance.

SHAW: Is Governor -- Vice President Gore's plan too generous with the federal Treasury in your judgment?

LINDSEY: Well, he is creating another new entitlement, another burden, about $200 billion burden, on the federal Treasury without fixing Social Security. And I think that that's something we should be a little bit concerned about. The main thing we have to do, the main obligation of this generation and of the next president, is to fix Social Security so that it's safe and secure for people when they retire.

SHAW: What does Governor Bush's plan do to make up for the anticipated shortfall in the Social Security system starting in the year 2016?

LINDSEY: The main thing that the plan does is get a higher rate of return on the assets that are in the Social Security system.

Right now, Social Security system only earns about 1.9 percent on the money. Even index government bonds earn about twice that. The stock market over the last 200 years has earned three and a half times as much. The main thing we have to do is get those assets earning a higher rate of return. The magic of compound interest coupled with enough time will be enough to make sure that the Social Security system is there and is providing benefits that are now promised in the 2030s, 2040s.

SHAW: Larry Lindsey, you are a man who obviously believes in this plan. Did you wince when last year the governor said he was getting out of -- you said you were getting, you were getting out of the stock market so you could sleep at night.

LINDSEY: I did.

SHAW: And yet, you can sit here and say that my man is offering a plan that includes investing in equities?

LINDSEY: Well, you know, I have a personal account. I have actually two of them, I have one because I was a former government employee and one because I was a former college professor. And let me tell you, Bernie, I've invested those very, very conservatively. I paid in less money in just -- into those plans than I paid into Social Security and yet the benefits I'm getting from those plans are three times as much as what Social Security is paying me, even though I invested very conservatively.

SHAW: But you know the thrust of my question?

LINDSEY: The key thing -- well, no one has to put their investment in any particular investment. You can be a very conservative guy like me -- I'm very conservative with my money, but even you can be very conservative and you can do a lot better investing in a personal account plan like Governor Bush is proposing than under the current Social Security system.

SHAW: Before you leave, this quick question.

LINDSEY: Sure.

SHAW: If the federal government budget surplus does not continue surplusing, aren't your and the vice president's plan dead in the water?

LINDSEY: I don't believe so. I think we have to fix Social Security no matter what. Now, Al Gore's plan may be dead in the water, because he doesn't fix Social Security. But no responsible president of the United States can let Social Security go out there and go bankrupt. Governor Bush has a plan to fix that problem, Al Gore has yet to come up with a plan to save Social Security.

SHAW: Bush economic adviser, Larry Lindsey, thanks very much.

LINDSEY: My pleasure, Bernie.

SHAW: Lot of numbers, lot of figures.

And still ahead here on INSIDE POLITICS: a Texas case hits the Supreme Court, we'll have reaction from George W. Bush.

Plus, politics at the pump. A look at gas prices and the political impact, past and present.

(COMMERCIAL BREAK)

WOODRUFF: Now, the politically-charged issue of school prayer. The Supreme Court today handed down its most far-reaching decision on the issue in almost a decade. It stems from a Texas case, which is why George W. Bush had a vested interest in the ruling.

Our senior Washington correspondent Charles Bierbauer is here now with details -- Charles.

CHARLES BIERBAUER, CNN SENIOR WASHINGTON CORRESPONDENT: Judy, the Supreme Court ruled that if prayer, even student led, results from the policy of a government body -- in this case a school board -- and is on government property -- a stadium -- at a government-sponsored event -- a public high school football game -- that violates the establishment clause of the Constitution, which prohibits state- supported religion.

The court, by a 6-3 majority, said even if students select the pre-game speaker, as they did in the Santa Fe, Texas school district, it's still a school policy that excludes minority opinions. Opponents of school prayer see this as far-reaching.

(BEGIN VIDEO CLIP)

BARRY LYNN, AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE: I think this means that any kind of official school event will not permit either students, or teachers, or administrators to turn those official secular events into religious services. We're not going to see any kind of public assemblies, public football games, basketball games be turned into revival meetings, not after this decision.

(END VIDEO CLIP)

BIERBAUER: But the justices narrowly limited this case to the football arena, avoiding, for example, the opportunity to address student prayer at a graduation ceremony. That's an aspect they may have to consider in a separate case, though years ago they ruled that clergy-led prayer at a commencement would be unconstitutional.

This case also has political implications since Texas Governor George W. Bush had supported the school district's prayer policy.

(BEGIN VIDEO CLIP)

BUSH: I thought that a voluntary student-led prayer in extracurricular activities was right and important; the Supreme Court thought otherwise. And I'm disappointed with the outcome.

(END VIDEO CLIP)

BIERBAUER: The opinion showed a sharp divide within the court. Chief Justice Rehnquist, writing for the three dissenters, said the court's opinion "bristles with hostility to all things religious in public life."

And this court is still wrestling with another church/state case. It's expected to announce next week whether or not to permit federal funds to be used to purchase computers and other technical equipment for parochial schools. The arguments against it is that such equipment could be used for religious rather than secular education -- Judy.

WOODRUFF: All right, Charles Bierbauer, thank you very much -- Bernie.

SHAW: Thanks, Judy.

The soaring cost of gasoline has attracted a great deal of political attention. With prices at more than $2 a gallon in parts of the Midwest, Vice President Gore is calling for an investigation.

(BEGIN VIDEO CLIP)

GORE: I've just learned that the big oil companies profits for the first part of this year have just gone up 500 percent. Now, you put two and two together, and look at these huge price increases that they say they can't explain, and look at the 500 percent increase in profits, and look at the way they've been getting bigger, and I think the -- that all adds up to a need for investigation of collusion, antitrust violations, and price gouging.

(END VIDEO CLIP)

SHAW: Also this day, the Illinois congressional delegation held a hearing asking for answers from the oil companies, the Environmental Protection Agency and the Energy Department.

Our Bruce Morton reminds us this isn't the first time politicians have been burned by rising gas prices. A look back now on other times gas prices have fueled a backlash.

(BEGIN VIDEOTAPE)

MORTON (voice-over): The United States rationed gasoline during World War II. Most Americans obeyed the rules. They wanted to save their old cars, anyway. You couldn't buy a new one.

The gas lines most Americans still remember started in 1973, when OPEC, the Organization of Petroleum Exporting Countries, decided to raise prices, and Arab oil producers reacted to the Middle East war by slapping an embargo on oil sales to the U.S. Oil prices shot up and drifted down.

Round two came in 1979, when revolutionary Iran stopped exporting oil. Long lines, even violence sometimes. And Don McLean sang, "Bye- bye, Miss American Pie, drove my Chevy to the levee, and the levee was dry."

(BEGIN VIDEO CLIP)

JIMMY CARTER, PRESIDENT OF THE UNITED STATES: The energy crisis is real. It is worldwide. It is a clear-and-present danger to our nation. These are facts, and we simply must face them.

(END VIDEO CLIP)

MORTON: But the gas lines, along with Iran's refusal to release American hostages it held, were major reasons why President Jimmy Carter lost his re-election bid to Ronald Reagan.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: It's obvious that the Iran revolution was a key factor, not only because of the hostages and the embarrassment of not being able to get them out earlier, but also because the price of oil skyrocketed on a worldwide basis and caused high inflation, high interest rates and so forth.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT-ELECT OF THE UNITED STATES: I, Ronald Reagan, do solemnly swear. (END VIDEO CLIP)

MORTON: Which all helped Reagan.

DAVID BRODER, "WASHINGTON POST": People had been very scared in the late '70s by runaway inflation and by the spectacle of this great power being unable to protect its own citizens who are held hostage in Iran. He managed to give people the feeling that we were again in control of our own destiny.

MORTON: And when Iraq invaded Kuwait with its oil at stake, Reagan's successor, George Bush, assembled a coalition which drove Iraq out and kept Kuwaiti oil for the West.

All those gas lines back in the '70s had consequences, too. Carpools, smaller cars, the 55-mile-an-hour limit. But as the years passed, America went back to its old love: Bigger was better. Speed limits went up, cars turned into mammoth SUVs.

Hey, does yours have the anti-rhinoceros guard? How about the lion scoop? How many gallons to a mile?

And here we are again.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

SHAW: Here we are again. And there's much more ahead on this edition of INSIDE POLITICS.

WOODRUFF: Still to come, the Reform Party in turmoil. Is Pat Buchanan to blame for the growing rift? We'll ask him and his former campaign co-chair, Lenora Fulani.

SHAW: A new...

WOODRUFF: Plus...

SHAW: Excuse me for stepping on you.

WOODRUFF: It's OK.

SHAW: A new stage in that New York Senate race. A look at the attack ads and the response.

And later...

(BEGIN VIDEO CLIP)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Those surpluses are causing an interesting change in American politics: They're bringing the parties together.

(END VIDEO CLIP)

WOODRUFF: Our Bill Schneider on the politics of the budget surplus.

(COMMERCIAL BREAK)

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

FBI experts say they hope to know soon whether two computer hard- drives from the Los Alamos National Lab were tampered with. The drives, which contain nuclear secrets, disappeared and then mysteriously reappeared last week.

Energy Secretary Bill Richardson says the investigation is focusing on a few individuals who had access to the high-security area where the drives were stored.

SHAW: In Waco, Texas, the federal government goes on trial: Branch Davidians and their families say the government contributed to the deaths of 80 people at the group's compound. With opening statements set to begin tomorrow, Tony Clark looks at the case.

(BEGIN VIDEOTAPE)

TONY CLARK, CNN CORRESPONDENT (on camera): It's taken seven years for this case to make it to the federal court. The six-member jury will be asked to decide four questions: whether members of the Bureau of Alcohol, Tobacco and Firearms used excessive force in their initial raid on the Branch Davidian compound; whether the FBI violated the Washington-approved plan by prematurely demolishing portions of that compound; whether the government helped start or feed the fire that consumed the compound; and whether or not the government is in any way responsible, because there was no fire protection plan, no fire trucks at the site when the fire engulfed the compound.

This trial is expected to last three weeks to a month. The most important issue, according to the plaintiffs, that of whether agents were actually shooting at the compound on April 19th. That issue has been set aside.

Tony Clark, CNN, Waco, Texas.

(END VIDEOTAPE)

WOODRUFF: European Union leaders are vowing to crack down on illegal immigrant smuggling after a shocking discovery today in a British port. Customs officials found 58 bodies in a truck that was supposed to be carrying tomatoes. The victims were apparently illegal immigrants from the Far East who had died during the journey. Two male survivors were taken to a hospital and are being guarded by police until they can be questioned.

A group of African-Americans gathered at the nation's capitol learning how to lobby Congress for slavery reparations. They want the federal government to pay for enslaving their ancestors.

Ohio Congressman Tony Hall says America will be haunted by its history of slavery until it offers a formal apology. SHAW: Microsoft wins one in its battle against the Justice Department. An appeals court will consider freezing a lower court order forcing the computer giant to change how it does business. However, the ruling is just a baby step in what could be a long and twisted legal road to the U.S. Supreme Court.

The Justice Department is trying to skip the appeals process and take the antitrust case directly to the high court.

WOODRUFF: INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: While Al Gore is unveiling a new plan on retirement savings, a new ad by the Democratic National Committee is touting the vice president's position on a key health care issue.

(BEGIN VIDEO CLIP, DNC AD)

NARRATOR: The Al Gore plan ensures patients' access to specialists, safeguards to make sure that doctors, not bureaucrats, make medical decisions, stops HMOs from withholding information on treatment options to save money, taking on the insurance companies to pass a patients' bill of rights once and for all.

(END VIDEO CLIP)

WOODRUFF: The DNC ad begins airing today in 17 states from Maine to Washington. The DNC will not say how much it is spending on this ad.

Meantime, in New York, GOP Senate candidate Rick Lazio is defending his position on patients' rights and hate crimes. In his latest ad, Lazio criticizes first lady Hillary Rodham Clinton for airing new negative ads of the campaign.

(BEGIN VIDEO CLIP, LAZIO CAMPAIGN AD)

REP. RICK LAZIO (R-NY), NEW YORK SENATE CANDIDATE: I've been in the Senate campaign for about a month now. And guess what? Hillary Clinton has already started running attack ads designed to fool you about me.

Her ads are simply untrue. I voted for a patients' bill of rights and I oppose hate crimes.

(END VIDEO CLIP)

WOODRUFF: The ad, airing statewide, is in response to two ads released by the Clinton campaign on Friday.

(BEGIN VIDEO CLIP, HILLARY CLINTON CAMPAIGN AD)

NARRATOR: The Senate just voted to kill the patients' bill of rights by two votes. Hillary supports it. In the House, Rick Lazio voted against the bill, siding with the Republican leadership. Rick Lazio: The more you know, the more you wonder.

(END VIDEO CLIP)

WOODRUFF: The second Clinton ad criticizes Lazio's position on hate crimes legislation. Both of those ads are also airing statewide.

The patients' bill of rights is one of the key issues on the campaign trail this year, and on Capitol Hill that quite often means political maneuvering.

Eileen O'Connor reports.

(BEGIN VIDEOTAPE)

EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): With health care topping the list of concerns for most voters, Republican lawmakers are accusing Democrats of trying to kill any chance of passing a patients' bill of rights. Democrats forced a vote on their own bill, which lost by a narrow margin.

SEN. BILL FRIST (R), TENNESSEE: It was a political ploy. It was an attempt to poison the well. Any issue which engenders that much emotion, that much passion, a lot of people will say: "Well, I don't know how it's going to work to my advantage, but if we keep it out, not have it resolved, I'll figure out some way I can use it in the next elections."

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: What particular rights don't you want to provide? The American people...

O'CONNOR: Senator Ted Kennedy, who pushed the Democratic proposal, says for election year politics passing legislation is what voters want. He also points out that Republicans in the House also supported what Democrats demand: the right for patients to sue their HMOs for punitive damages and a bill that covers all patients: not just those under so-called "self-insured plans."

KENNEDY: They have got a third of the Republican Party in the House of Representatives is in the same place that I am. And so the dispute between the Senate Republicans is with the House Republicans, not with me.

(on camera): Republicans vow they will have a bill, but so far it does not look like one that will include the right to sue: a key demand of Democrats and some House Republicans.

SEN. JAMES JEFFORDS (R), VERMONT: The problem is not having a bill. It's which bill. And we have a fairly basic difference of philosophy. We believe the emphasis should be on the best health care possible to the patient. We would say theirs is looking for the best lawsuit possible.

O'CONNOR: Democrats have wasted no time in using the vote in the Senate to their political advantage, with candidates running on it and supporters of their legislation, like the AMA, whipping up the pressure with ads and direct phone lines to members Congress to help doctors send the message: Pass this or else.

DR. THOMAS REARDON, AMERICAN MEDICAL ASSOCIATION: We will take it to the voters this fall. We will make it an election issue.

O'CONNOR: Democrats hope pressure from doctors and patients before the elections will win over vulnerable Republicans and give them the patients' bill of rights they want.

Eileen O'Connor, CNN, Washington.

(END VIDEOTAPE)

SHAW: With record amounts of money being spent on campaign ads this year, more focus has been placed on the people who raise the money for those ads.

Jeffrey Birnbaum, the Washington bureau chief for "Fortune" magazine, has written a new book called "The Money Men."

Professional lobbyists, professional fund-raisers, professional givers: an obstacle to reforming the system?

JEFFREY BIRNBAUM, AUTHOR, "THE MONEY MEN"/"FORTUNE" MAGAZINE: Well, clearly. I think that one of the things that people need to know about the system is that it's not a big wallet that's most important among the givers, but a big Rolodex.

The real money men and women, the most powerful people in the campaign finance system, are the ones who solicit contributions and gather them from other people. There are, at least in most cases, real limits on the amount that can be given: $1,000 per election. And so it is -- the money men are the solicitors of contributions and not just the donors.

And the fact that -- most of these are volunteers, by the way. But they are the ones that have most of the power, to the extent that there is power, in giving on the campaign trail.

SHAW: In politics, does money count more than votes?

BIRNBAUM: No. In fact, that's one of the surprising conclusions from the people -- for the people who look at campaign fund raising in caricature, where they expect contribution a to congressman b, and then go directly corruption c.

The most potent use of money in Washington and in politics is the gathering of voters, lobbying, mostly at the grass-roots, I think -- more correctly termed Astroturf. That doesn't mean that campaign giving is not important. In fact, it is quite important. But a broader view about the world of campaign fund raising is what I tried to bring from "The Money Men."

SHAW: Jeffrey Birnbaum, why is there too much money in politics?

BIRNBAUM: Well, because the cost of campaigns are so huge and getting larger all the time, and both sides have access to money, increasing amounts of money.

The growth in the economy, prosperity, is another cause. And I think that powerful interests understand that they need to give in order to get what they think of as "protection money," you know, in the Mafia sense. If they give money, at least they'll be aware of what terrible things may befall them.

SHAW: And in your book, you note that financial services contributes the most money.

BIRNBAUM: That's right. In part, because they have people in financial services -- stock brokers, real estate people -- they are the predominating group of solicitors, the real money men, because they have enough time to raise money. People give money for lots of reasons, including financial services, not just to get a special tax break or a special appropriation. Actually, a lot of money is given for people to become groupies to the political scene, sort of to become close to the Beltway celebrities: a kind of minor celebrity here in Washington. And back home they can say they were close to some politician because they gave money.

SHAW: The new book is called "The Money Men," written by this man, Jeffrey Birnbaum, Washington bureau chief for "Fortune" magazine. Thank you.

BIRNBAUM: Thank you, Bernie.

SHAW: Quite welcome.

And when INSIDE POLITICS returns, the breakup of a political odd couple. Judy will interview presidential hopeful Pat Buchanan and liberal activist Lenora Fulani.

(COMMERCIAL BREAK)

WOODRUFF: One of the oddest political alliances of this election year is over. Liberal activist Lenora Fulani has resigned as a co- chairwoman of Pat Buchanan's presidential campaign. In a letter yesterday, Fulani told Buchanan she objected to his efforts to transform the Reform Party into, quote, "a party of and for only social conservatives." The Buchanan campaign says it rejects Fulani's criticism.

We will talk with Pat Buchanan shortly, but first Lenora Fulani joins us from New York.

Ms. Fulani, why are you doing this?

LENORA FULANI, FORMER BUCHANAN CAMPAIGN CO-CHAIRWOMAN: Well, Judy, when Pat Buchanan left the Republican Party and the joined the Reform Party, I think that he had a wonderful opportunity to provide leadership to a broad-based movement for political reform that would have been responded to by millions of Americans from across the political spectrum.

But I think he blew that opportunity. He missed it by making a decision to run a campaign that was narrowly oriented towards his social conservative base. And Pat can best tell you why he made that choice, but now what he's running for is not just the nomination of the Reform Party but also an effort to transform Reform into a party of social conservatism.

WOODRUFF: But you...

FULANI: Now he has every right to do so -- I have no problem with his efforts at doing that -- and I have every right to object to it, because as I've made clear over the last eight month and when we first met, I'm interested in building a party that is broad based for the American people that brings together the left, center and right.

WOODRUFF: But you knew...

FULANI: That's my vision.

WOODRUFF: Lenora Fulani, though, you knew Pat Buchanan's views very well when you signed up with him.

FULANI: Well I'm not objecting to his being a social conservative. I'm not objecting to his views. In fact, I felt that that was the very appeal, his coming from the right and my coming from the left to create a broad-based movement. And it's had a very positive impact. Millions of independents, many independents, including people in Buchanan's camp, have responded to and been moved by this effort to create a left-right coalition. But that is no longer what he's doing and while Pat is...

WOODRUFF: Are you saying that you were misled by Mr. Buchanan?

FULANI: No, I'm saying that what Pat ended up doing by virtue of running his campaign, making a decision to run the campaign very narrowly and to create -- I think there's overwhelmingly evidence that he's creating Reform as a social conservative party, that he's gone beyond what it is that we agreed to do, which is to work together in a left-center-right coalition.

One point that I want to make...

WOODRUFF: He...

FULANI: ... I think that his issues, for example, that he's spoken to, issues of trade, foreign policy and political reform, are issues that he and I agree on. We obviously had no agreement relative to social issues, and that's fine. We've lived with that disagreement. I think where you see the difference is in how, inside of the Reform Party, he basically over the last eight months has supported the hard-core right-wing brigade in moving in, taking control of the party and moving off the road of building a broader coalition...

WOODRUFF: Can he win the...

FULANI: ... That's what I'm objecting to.

WOODRUFF: Can he win the reform nomination without of your support and the support of the people with you?

FULANI: Oh, I think so. I think Pat has succeeded in what he set out to do, which was to win the nomination...

WOODRUFF: And whom will you...

FULANI: ... My concern, once again -- go ahead, I'm sorry.

WOODRUFF: And whom will you support now?

FULANI: Well, there are obviously other independents -- John Hagelin is one. I think the strongest independent running right now in terms of an appeal to a broad movement is Ralph Nader, because unlike Pat he's not pandering, basically, to the left. He's running a campaign that I think is more inclusive, has the capacity to reach out to the left and turn right around issues of political reform...

WOODRUFF: All right.

FULANI: ... and that's having...

WOODRUFF: All right.

FULANI: ... a broader massive appeal...

WOODRUFF: All right, Lenora...

FULANI: ... And I hope that Nader enters the Reform Party primary because I think it would be a good fight for defining what kind of movement this independent movement will be.

WOODRUFF: All right, Lenora Fulani, we thank you very much for joining us.

FULANI: Thank you

WOODRUFF: And now, as promised, we are joined by Reform Party presidential candidate Pat Buchanan..

Thank you for being with us, Mr. Buchanan. Are you trying to create a Reform Party of and for only social conservatives?

PAT BUCHANAN (REF), PRESIDENTIAL CANDIDATE: No, Judy. As you know, we brought -- we joined with -- Lenora Fulani joined with us back in October, and many of the Reform Party folks have joined with us who are already there. But there's no doubt in the battle for the nomination, which became surprisingly tough, you go into state after state, and some people really not only did not welcome us, they would not tell us when meetings were held. And so what we had to do was energize our base and come in and do battle for those delegates. So in state after state after state, I don't think we've lost a single battle.

But there's no doubt the folks who support me, many of them are social conservatives, strong right to lifers, people who people that the moral and cultural and social issues are as important as trade. And so, in a sense, what Lenora says is not wrong. We have -- but we are building the party where it didn't exist. And it was only on the ballot in 20 states. We're going to get it on the ballot in 50. There are a number of states where or didn't exist at all. We've created new parties. But they do tend to reflect very much Pat Buchanan's views and values.

WOODRUFF: So is she correct then when she says you have walked away from an effort to create a left-center-right coalition and to focus instead just on, in her words, a "hard core, right wing brigade."

BUCHANAN: I think that's a media term that ready is unfair. For example, of the major speeches that I've given...

WOODRUFF: That was her term.

BUCHANAN: All right, but of the major speeches I've given, the big one at Harvard was on campaign finance reform. Another one was of getting rid of sanctions on countries, even Cuba and Iraq, that hurt people -- and Serbia that hurt people. We've got a deconstructing of the new world order foreign policy.

There has not been a major Buchanan speech on cultural or social issues that has been a text for eight months. Now I intend to address those issues in the fall, so I don't think that's necessarily fair. It is true when I say I'm pro-life that the media tends to say, Buchanan says he's pro-life, and that's more the headline than the rest of it. But we have a broad agenda, as you will see.

WOODRUFF: When she -- she also made the point that in your effort to win the party nomination, and again, quoting her, she says, "You've driven away scores of activists. You have polarized the Reform Party."

BUCHANAN: Not true. I mean, for example, just last week Lenora and I had breakfast up in New York, and she told me she wanted to be chairman of the Reform Party. And I told her I didn't think I could support that, I would talk to my sister, who called her back that afternoon and said, Lenora, we can't support you. We don't think it's right for the party. It's not a centrist move. We don't think it would unite the party and we don't believe we could get you through the convention. And I think that was decisive in her reason to leave, quite frankly. So I think that as much as anything else.

But, look, people who want political and financial and campaign finance reform, we're going to do it. But we're also pro-life.

WOODRUFF: All right, Pat Buchanan, we're going to have to leave it there. We know we'll see you again.

BUCHANAN: Thank you.

WOODRUFF: Thanks very much near joining us -- Bernie.

SHAW: On to another third-party candidate. Green Party presidential hopeful Ralph Nader and others filed a lawsuit in Boston today, challenging regulations which allow corporations to sponsor presidential debates again this fall. The suit says the Federal Election Commission rules are illegal and corrupt the political process. Under separate debate, commission rules Nader is unlikely to garner enough support in national polls to be allowed to take part in this year's debates.

Meanwhile, here in Washington, the Green Party held the first in a series of rallies scheduled in eight cities en route to the party's national nominating convention in Denver this coming weekend.

Up next, the budget surplus as common ground: Our Bill Schneider explains.

(COMMERCIAL BREAK)

WOODRUFF: News of a larger-than-expected budget surplus gives presidential hopefuls Al Gore and George W. Bush something in common.

Our Bill Schneider joins us now to explain -- Bill.

SCHNEIDER: Judy, remember "Rosy Scenario"? You went to school with her, right?

Well, "Rosy" made a lot of appearances during the Reagan administration. And she's back. We've gone from deficits as far as the eye can see, to surpluses as far as the eye can see. And those surpluses are causing an interesting change in American politics. They're bringing the two parties together.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): First, George W. Bush proposed private investment accounts, the first big change in the social security program in over 50 years.

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: I -- this country needs to think differently about allowing younger workers to invest some of their payroll taxes in the private sector.

SCHNEIDER: Al Gore attacked that proposal as risky.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: The people in this room know that the stock market doesn't always work to give higher returns without any risk.

SCHNEIDER: Now that the surplus is estimated to be as much as $1 trillion higher than expected over the next decade, Gore is willing to take some risks, too. He's proposing government-subsidized private investment accounts that are separate from the social security program.

GORE: Social security plus, a new, tax-free voluntary account that will let you save, invest and build on top of the guaranteed foundation of social security.

SCHNEIDER: The centerpiece of Bush's campaign is a big, across- the-board tax cut.

BUSH: I know the surplus isn't the government's money. The surplus is the people's money.

SCHNEIDER: Gore attacked that plan as irresponsible.

GORE: The pro -- one big problem with that choice would be that if we immediately stop paying down the debt and instead go back into deficits.

SCHNEIDER: But then, the vice president doubled the size of his own tax cuts.

GORE: And I am proposing here today, and announcing today, a plan of targeted tax cuts for middle-income families that over the next 10 years will total $500 billion.

SCHNEIDER: Notice how he said "targeted tax cuts." Bush thinks that's a bad idea.

BUSH: He wants to target all his tax cuts. I want to give universal relief.

SCHNEIDER: Except that Bush is not above supporting some targeted tax cuts of his own.

BUSH: Under my proposal, the seller would receive a 50 percent break on his or her capital gain if and when the land is sold for conservation purposes.

SCHNEIDER: Remember how Republicans used to be the party of fiscal responsibility? They still are.

BUSH: And next, I'll address a long-standing source of public irritation and outrage: the habit of pork barrel spending.

SCHNEIDER: Except that under Clinton, the Democrats have also become the party of fiscal responsibility.

GORE: Because we can never go back to the days when we spent money that we just didn't have.

SCHNEIDER: Democrats still want to be the party of big ideas.

GORE: We're America. We've proven that we are not afraid of big choices, big decisions and big dreams.

SCHNEIDER: Just like the Republicans.

BUSH: You see, this country must have a public education system that leaves no child behind because there's no second-rate children in America, and there are no second-rate dreams.

(END VIDEOTAPE)

SCHNEIDER: With the surplus getting bigger and bigger, each candidate is raiding his opponent's ideas. And why not? We can have it all. Now, if Bush names an abortion rights supporter to the ticket, it's going to be hard to say what the differences are between the candidates this year -- Judy.

WOODRUFF: We'll will have to get out our magnifying glasses to go looking.

SCHNEIDER: That's what we'll do.

WOODRUFF: Bill Schneider, thanks.

And that's all for this edition of INSIDE POLITICS. We'll see you again tomorrow when John King will be with vice president Gore in Lexington, Kentucky as he announces his new plan to boost retirement savings.

And, of course, you can go online all the time. CNNs allpolitics.com.

SHAW: This programming note: Congressmen Porter Goss and Marty Meehan will discuss security at the Los Alamos National Laboratory tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

I'm Bernard Shaw.

WOODRUFF: And I'm Judy Woodruff. "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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