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Inside Politics

Attorney General Nixes Gore Special Counsel; Bush Scrambles to Defend His Tax Cut Plan

Aired August 23, 2000 - 5:00 p.m. ET

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

BERNARD SHAW, CNN ANCHOR: I'm Bernard Shaw in Washington. The government of Bahrain says dozens of bodies have been recovered in the aftermath of a crash of a Gulf Air A320 aircraft in the Persian Gulf.

The jet, on its way from Cairo to Bahrain, made two attempts to land at the Bahrain International Airport before crashing. Officials say one of the jet's engines was on fire at the time of the crash, about 8:40 p.m. local time. Helicopters the U.S. Navy's fifth fleet were called in to help for the search. Bahrain's information ministry says there were 135 passengers and eight crew members on flight GF072. The defense minister says the bodies of nearly half the people onboard have been recovered.

(BEGIN VIDEOTAPE)

IBRAHIM AL HAMMER, UNDERSECRETARY OF CIVIL AVIATION, BAHRAIN: I can confirm that Gulf Air Airbus A320, coming from Cairo to Bahrain, was scheduled to arrive Bahrain time about 7:20 local time. Unfortunately, the crash landed in the sea after the third attempt to land on runway to Bahrain. The total on board were 143 passengers, that including eight crew members.

UNIDENTIFIED FEMALE: Are there any survivors?

HAMMER: Well I cannot be sure at this stage. We are doing all of our best with all kind of rescue operations of trying to recover the bodies and the survivors. So far, I cannot confirm that if there are any survivors or not, but all of our attempts are there to try to recover whatever we could. So far, we have recovered about 50 bodies, and the department's concern within the government of Bahrain is trying its best to identify the people.

UNIDENTIFIED FEMALE: How intensive is the rescue operation going on?

HAMMER: Say again?

UNIDENTIFIED FEMALE: How intensive is the rescue operation? Who is involved in the actual rescue operation?

HAMMER: It's very intensive. All of the government agencies have helped and from others who are present at the airport who have been deployed for this rescue, so I can tell you that people from civil aviation, ministry of interior, and other friendly defense people -- the ministry of defense -- they are all there deploying all of their assistance to the rescue operation.

(END VIDEOTAPE)

SHAW: Cairo airport officials said 63 Egyptians were on the flight.

We have more information about the Airbus A320. The jetliner has two engines. It has a single aisle. Passenger capacity is from 107 to 185. Its maximum flying distance is 3,500 miles. It has a two- member flight crew. It went into service in 1988.

SHAW: We will have more information on the crash as it becomes available.

INSIDE POLITICS begins now.

(BEGIN VIDEO CLIP)

JANET RENO, U.S. ATTORNEY: I realize that politics will be hurled around my head. I just sit there and duck as it comes.

(END VIDEO CLIP)

SHAW: The attorney general nixes an investigation that could have been a nightmare for who does care about politics -- Al Gore.

Also ahead:

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (D-CT), VICE PRESIDENTIAL CANDIDATE: With all due respect to Governor Bush, the problem isn't explaining the tax cut plan; the problem is the plan itself.

(APPLAUSE)

(END VIDEO CLIP)

SHAW: George W. Bush plans a counteroffensive against the Democrats, even as he trying to clarify his tax cut plan.

Plus: We'll map out the Bush and Gore camp strategies by zeroing in on the new blitz of TV ads.

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

Thank you for joining us. Judy is off today.

Few, if any, would dispute that Al Gore is better off now that Attorney General Janet Reno has decided once again not to launch an independent investigation of Gore's past fund-raising. But Reno's announcement may remind voters of one of Gore's lingering political headaches, at a time when he is trying to extend his convention bounce.

Our justice correspondent Pierre Thomas has more on Reno's decision and the politics surrounding it.

(BEGIN VIDEOTAPE)

PIERRE THOMAS, CNN JUSTICE CORRESPONDENT (voice-over): The attorney general said no to an investigation that could have crippled Vice President Gore's bid for the White House.

RENO: I have concluded that today's special counsel is not warranted.

THOMAS: In focus, the campaign fund-raising controversy that has haunted Gore for years. Images of White House coffees and a now infamous 1996 visit to a Buddhist temple.

Robert Conrad, the head of the Justice Department's campaign task force, had called for a special counsel to investigate whether Gore lied as recently as this spring about his fund-raising activities. Did Gore lie about the number of White House coffees he intended when he was interviewed by Conrad in April of this year? Did he lie when he told Conrad that the temple event was not a fund-raiser?

Reno sought to clarify and correct his statement on the number of coffees, as she conclude the questions about the temple were really a debate over definitions.

According to Reno, the Conrad interview with Gore...

RENO: ... reflects neither false statements nor perjury. Rather the transcripts reflects disagreements about labels.

THOMAS: Reno's decision comes at a critical moment for Gore, who's riding a post-convention bounce in the polls and trying to distance himself from alleged Clinton administration scandals. It marks the third time she's rejected calls for an outside probe of Gore, including a recommendation from FBI Director Louis Freeh.

SEN. ARLEN SPECTER (R), PENNSYLVANIA: There is no doubt that the attorney general seeks to protect the president, and this follows the pattern. No doubt that she seeks to protect the vice president.

THOMAS: Reno scoffs at such claims.

RENO: I don't do things based on politics. I realize that politics will be hurled around my head. I just sit there and duck as it comes.

THOMAS: But a former attorney general says he can't understand Reno's reasoning.

RICHARD THORNBURGH, FORMER ATTORNEY GENERAL: I'm puzzled by it. The question is whether there's a conflict of interest when she is called upon to investigate allegations regarding a sitting president or vice president in an administration of which she is a part. THOMAS (on camera): So Reno finds herself in a familiar situation, bracing for criticism and planning to ignore it.

Pierre Thomas, CNN, Washington.

(END VIDEOTAPE)

SHAW: The Gore camp tried to stay on message today despite the distraction of Reno's announcement.

CNN's Pat Neal is with Gore in Florida.

(BEGIN VIDEOTAPE)

PAT NEAL, CNN CORRESPONDENT (voice-over): Vice President Al Gore returned to the battleground state of Florida to talk with seniors and working families about his middle-class tax cut plan. Gore did not talk about Attorney General Janet Reno's decision not to appoint a special counsel. He left that to his aides.

CHRIS LEHANE, GORE CAMPAIGN SPOKESMAN: Obviously, we're pleased with this announcement. But Al Gore is going to continue doing what he's been doing all along, which is focusing on America's families.

NEAL: But Governor George W. Bush said in a statement, "It was clear the vice president engaged in a number of questionable fund- raising activities," saying -- quote -- "The American people are sick and tired of all these scandals and investigations. The best way to put all these scandals and investigations behind us is to elect someone new. I'm running to uphold the honor and dignity of the White House."

The Reno announcement comes during a week that has energized the Gore campaign. Fresh from his convention, Gore's been boosted by a bounce in the polls and swelling turnout at rallies. The campaign also sees George Bush on the defensive, with Bush admitting he needs to do a better job of explaining his tax cut proposals.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: Do you want to hear generalities and platitudes, or would you like to hear about issues and specifics?

NEAL: Gore's hoping to appeal to the state's large elderly population by highlighting his proposal to allow a $3,000 tax credit each year for long-term health care, and he promised to save what many seniors here hold sacred.

GORE: We'll put Medicare and Social Security in a lockbox.

NEAL: Gore wants a repeat of 1996, when Clinton-Gore became the first Democrats to take Florida since Jimmy Carter, and he hopes to force Bush to spend both time and money here. In the past 75 years, no Republican has won the White House without taking this state.

(END VIDEOTAPE) NEAL: Bush may have an advantage here. His brother, Jeb, is the state's popular governor. But Bush isn't taking anything for granted. He'll be campaigning here tomorrow. Gore will return to Florida on Monday. Both of them are trying to seize the state's 25 electoral votes -- Bernie.

SHAW: Pat Neal with the latest from Florida, thank you.

Governor Bush is taking this day off the campaign trail, but behind the scenes, his team is working to limit political fallout on that tax-cut issue.

Our Jonathan Karl joins us from now from Austin, Texas -- Jonathan.

JONATHAN KARL, CNN CORRESPONDENT: Well, that's right, Bernie. Even as Governor Bush is acknowledging that he needs to do a better job explaining his tax plan, the Bush campaign is preparing a counteroffensive against Al Gore's proposed cuts. In the coming days, Bush is expected to make the case that Gore's tax proposal, his tax cuts, which are about half the sizes of Bush's, would further complicate the tax code and provide no tax relief at all to many working families.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, BUSH CAMPAIGN SENIOR ADVISER: Al Gore's targets are so narrowly defined that most American people aren't going to feel any tax relief. It's kind of a Cheshire cat tax cut: All you're going to see at the end is Al Gore smiling, but people aren't going to get the tax relief he's been promised.

(END VIDEO CLIP)

KARL: The Bush campaign is busily compiling a list of what they say are categories of low- and middle-income workers who would receive no tax relief at all under the Gore plan. Exhibit A in their list is Gore's proposed solution to the marriage penalty. What Gore has proposed is increasing the standard deduction for some married couples. The Bush campaign points out that that would leave no tax relief to those, including most who own homes, who itemize their taxes.

Now, the tax deductions: Now, the Bush campaign is also acknowledging, as Bush himself did yesterday, that some people believe that his tax cuts would result in cuts in popular spending programs. To counter that perception, what Bush will be doing is continuing to highlight areas that he would increase federal spending. He's going to do that tomorrow when he goes to New Orleans to Dillard University. He's going to announce a couple of hundred million dollars in new federal spending that would aid historically black colleges and colleges that a high percentage of Hispanic students.

And here in Texas, the Bush campaign is touting a new report that came out today that shows that advanced placement tests, students taking advanced placement tests here in Texas are on the rise, and those students are also doing better than they had done in the past.

Bush's education commissioner, a Bush appointee obviously, announced this new proposal, this new study at a press conference here in Austin and used it to counter Al Gore's attacks on Bush's education record.

(BEGIN VIDEO CLIP)

JIM NELSON, TEXAS EDUCATION COMMISSIONER: I do take offense, and I think most Texans do, when you would assert that a system that is acclaimed I think almost across the board for its leadership and reform effort is somehow backwater. I mean, that's ludicrous.

(END VIDEO CLIP)

KARL: Now at the end of the week, on Friday, Bush will shift gears again and turn to international issues. He's meeting with the newly elected president of Mexico, Vicente Fox, and giving what his campaign is calling a major foreign policy speech on America's policy in the Western Hemisphere -- Bernie.

SHAW: Jonathan Karl, thank you, from Austin.

If voters are confused about Bush's tax-cut plan, the governor's admitted lack of clarity on the issue may not be the only reason why. Both the Bush and Gore camps have issued reams of facts and figures that seem to contradict one another.

Our Brooks Jackson crunched the numbers and looked at the premises behind them.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): Al Gore says his tax plan favors the little guy.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: ... tax cuts for middle-class families.

JACKSON: But George W. Bush says the same thing about his plan, and they both have lots of examples.

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Say the mom's making 30,000 and the dad's making 20,000.

JACKSON: Here's one. According to Gore, a family of four making $60,000 gets a $3,025 tax cut under his plan but only a $1,400 tax cut under Bush's. But Bush figures Gore's plan would produce a zero tax cut while his plan would cut the family's taxes $2,050.

(on camera): It just makes you crazy. They can't both be right. So let's put on the green eyeshades and see whose numbers add up.

(voice-over): Aha. Gore assumes that $60,000 family is prudently saving their money, which means they'd get a dollar-for- dollar tax credit worth $2,000 under his proposed savings subsidy plan. Bush assumes the family would have no savings and would get no such credit, making Bush's plan look that much better. And Gore assumes one of the children is in college, getting another tax credit, $800 than under the Bush plan. But Bush assumes both children are younger, erasing Gore's college credit advantage, but instead generating child tax credits, making his plan look $1,000 better than the Gore plan. And so on.

BOB MCINTYRE, CITIZENS FOR TAX JUSTICE: Well, they each have plans that will help some people. There's no doubt about that. And they've picked the people that their plan would be better for.

JACKSON (on camera): Let's look at another one, a couple earnings the minimum wage. Each candidate says this couple is better off under his plan. Who's right? Again, it depends.

(voice-over): Gore says the minimum wage couple gets a $715 tax cut under his plan. Zero under Bush's. Bush figures it the other way. He says the minimum wage couple gets only a $210 cut under Gore's plan, a $542 cut under his plan. What gives?

Aha. Here's the difference. Gore's couple has two children, and so they qualify for the earned income tax credit, which Gore would make more generous than it is now, so the couple gains $715. Bush assumes no children, therefore no earned income credit, making his plan look better.

These carefully massaged examples actually obscure the big picture.

MCINTYRE: Here's what we know. We know that Gore's plan, while very complicated and hard to get firm numbers on, has income caps on all the tax breaks. So nobody over $100,000 is going to get anything, and most of the money looks like it'll go to people from $60,000 and down.

Bush's plan, we know that most of the money goes to people over $100,000 and that the very rich, the top 1 percent, get almost half the money. That's the bottom line.

JACKSON (on camera): So both side are being, to say the least, selective about their facts and in the process doing more to confuse than to inform.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

SHAW: And still ahead on INSIDE POLITICS, how important is the tax cut plan for the Bush campaign? Margaret Carlson and Rich Lowry weigh in.

(COMMERCIAL BREAK)

SHAW: Joining us now with their views on how this presidential race is shaping up, Margaret Carlson of "TIME" Magazine and Rich Lowry of "The National Review." Rich, starting with you, given the vice president's bounce in the polls, how do you see the mindsets of both campaigns right now?

RICH LOWRY, "NATIONAL REVIEW": Well, the Bush people, I think, at least are telling themselves that they expected this. They expected some Gore bounce. They probably didn't expect it to be quite this significant. But they think that Gore probably peaked for the moment on Saturday. That was his best day, and they'll see it settle down to a small four or five point Bush lead in the next week or so, at least by Labor Day.

The Gore people, obviously, are elated. They achieved almost everything that they needed to do with that convention, and it's been reflected in the early polls.

SHAW: Margaret?

MARGARET CARLSON, "TIME": Karl Rove is a brilliant strategist, but he's more brilliant when he's running a campaign that's ahead. And you can see Bush being slightly rattled by this bounce, which is actually a bigger bounce than Gore imagined in his dreams. So there's been some -- a few missteps the last couple of days, some just in saying "terror" instead of "tariffs," but others in having trouble defending the tax cut and a little bit on the defensive on the defense allegations that he made that the United States was not ready.

LOWRY: Margaret, I think -- I think there's something to that, but this is also a little bit media-driven. I was with Bush on his train after the Republican Convention. We had large and enthusiastic crowds, and he messed up some words. And that just wasn't a story then because he was leading by 18 points. Now that the bigger story is rocky times for George Bush, everyone fastens on every sort of mistake.

Now, it's obviously true that he's prone to this kind of thing. He's the verbal equivalent of Gerald Ford when it comes to this sort of thing. If people don't want to elect someone who sometimes mistakes billion for trillion, they're not going to elect George W. Bush.

But you're also right that Bush has been defending his tax plan since January, and he should have the rap down by now. It should as natural as saying progress -- prosperity with a purpose by now.

CARLSON: Prosperity!

LOWRY: Yes. Excuse me. I messed up that.

CARLSON: Yes, all those "p" words, Rich.

LOWRY: But that's a little disturbing, yes.

SHAW: Well, you say that Governor Bush is the verbal equivalent of Gerry Ford. What do you mean?

LOWRY: He's prone to making these sorts of mistakes. He stumbles on his words. If the election is going to be over who's more articulate and who's more fluid with his speech and with his grammar, Gore's going to win hands down.

SHAW: Well, Margaret, the Bush people say that if you put a camera on anybody long enough, someone is bound to misspeak.

CARLSON: Oh, of course. Even us, Bernie. Imagine that, pundits misspeaking.

SHAW: I do it every day.

CARLSON: So do I. Rich may never do it.

But the -- the sense that it's a different race is still out there, and I think the media probably just hung some of that on -- on, a few more verbal missteps than usual.

The tax cut thing, you know, Gore takes the ideal family for his offense and then Bush defends with his ideal family, getting the biggest tax cut. But the independent tax analysts say that, you know, almost -- the massive amount of the benefits go to the people making the most, and then Bush comes back and says, no, it's hardworking people, they should have their money back. And then Gore says, no, I have a middle-class tax cut.

I tend to think that Bush's, you know, does favor the wealth and he should say, you know, come right out with what always comes back in these circumstances -- well, those are the people who pay most of the taxes, so therefore they're going to get most of the tax breaks, because there is no other answer to that -- that attack on his plan.

SHAW: Rich?

LOWRY: I think the Bush people are surprised a little bit by the aggressiveness of Gore's populism. When Gore first adopted this rhetoric a month or so ago, I think the thinking was, well, this is a temporary thing to try to get his base back on his side, and then he'll move on to something else. Well, he hasn't moved on to something else. It seems as though this will be the final version of Al Gore. And I think the Bush people are still trying to figure out how they react to it, because it's a very counterintuitive strategy.

Bush's -- Gore's rhetoric on this stuff and tone is very similar to what we heard from Pat Buchanan when he was running the immediate aftermath of a recession in late '91 and '92. So it's a very counterintuitive strategy, and I think the Bush people are still figuring out how they're going to counterpunch on it.

SHAW: Well, these two issues, the tax cut, dueling tax cut plans and the question about U.S. military preparedness, of the two issues, which do you think resonates most with voters right now?

CARLSON: Tax cuts almost always do unless there is some problem in the world, and then people worry about the military.

George Bush made the defense misstatement in his speech at the convention. And as Rich says, you know, the media kind of tended to let it slide until Gore had his bounce, and then you notice everything what's not going right for Bush, because Governor -- General Shelton came out and said, no, Governor Bush, it's not true that the American military is not prepared to fight a war, and you shouldn't say so, it's not good for our credibility in the world.

That was weeks ago, and it's just getting front-page coverage again today. So he's had kind of a free ride on that.

SHAW: Rich?

LOWRY: I think the Gore's campaign push-back on the military stuff has been very effective, where they're saying, no, you know, Governor Bush, it's you that is playing politics with defense, it's you that's hurting the national interest by suggesting our military isn't up to par. And I'm a little surprised that the Bush campaign hasn't made better use of Dick Cheney in this debate. You would think he is their best weapon, but they're still sending him to schoolrooms to read "The Hungry Caterpillar" to little kids, which he's obviously very uncomfortable doing. So why not just have him make the case on preparedness instead? Spare him the pain?

CARLSON: But Rich, that might be because Dick Cheney was involved in some of the defense readjustments after the end of the Cold War -- remember? -- when there was this so-called "peace dividend." So he's...

LOWRY: Right.

CARLSON: So he's not the best person to defend it.

LOWRY: Well, but since then, we've had a massive number of deployments that's helped degrade the readiness of the force, and Cheney is not responsible for that. And you'd think he'd be able to speak very authoritatively to these sort of issues.

CARLSON: Well, he reads "Hungry Caterpillar" more authoritatively.

(LAUGHTER)

LOWRY: Well, he turned it over to Lynne yesterday. He couldn't do it himself.

SHAW: Margaret Carlson, "TIME" Magazine, Rich Lowry, "National Review." Thanks so much. We've run out of time regrettably.

CARLSON: Thanks, Bernie.

LOWRY: Thanks for having us.

SHAW: Quite welcome.

And there's much more to come on this edition of INSIDE POLITICS. Still ahead, the latest battle in the presidential ad war and we'll find out which states are primary targets. Plus... (BEGIN VIDEO CLIP)

BUSH: We'll have local control of schools with one national goal...

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GORE: I will ensure that there is a fully qualified, well- trained teacher in every single classroom.

(END VIDEO CLIP)

SHAW: Two views on education reform. Kate Snow sizes up the proposals of both candidates. And later, Louisiana Governor Mike Foster with a new education plan of his own.

(COMMERCIAL BREAK)

SHAW: We will have more of this day's political news coming up, but now a look at some other top stories. Scores of bodies have been recovered from the crash site of a Gulf Air Airbus in the Persian Gulf. The plane, with 143 people on board, crashed while attempting to land at Bahrain International Airport.

The flight originated in Cairo, where families are gathering at the airport awaiting word on the fate of their loved-ones. Bahrain's undersecretary of civil aviation gave this account of eyewitness reports in an interview with Bahrain TV.

(BEGIN VIDEO CLIP)

QUESTION: Does anybody know exactly what happened? Were there any eyewitnesses that saw the accident?

IBRAHIM AL HAMMER, UNDERSECRETARY OF CIVIL AVIATION, BAHRAIN: Well, the eyewitnesses so far is the control tower belonging to the airport. It could see that the aircraft was coming to land on runway one-two when it saw that he should ask for a second attempt, which the tower granted, and then after the third -- after the second attempt, which failed, resulting in the pilot asking for a third attempt to land. And then as it turned to establish on the runway, runway one- two, to land, that -- at that time, unfortunately, the accident happened.

(END VIDEO CLIP)

SHAW: The United States Navy is helping in the search. No survivors have been found.

Aviation officials here in the United States are still awaiting more information on the crash of the Airbus A320. That plane was similar to the one we see here.

While the crash does not involve a U.S. carrier, National Transportation Safety Board Chairman Jim Halls says the United States might play some kind of role in the investigation.

(BEGIN VIDEO CLIP)

JIM HALL, NTSB CHAIRMAN: I am not familiar with the aircraft and the engines and who was aboard, whether there were American citizens, whether there were American-manufactured engines. But, normally, if it is a major aviation accident, we will at a minimum send an observer to the accident if invited. And I would anticipate that we would be.

(END VIDEO CLIP)

SHAW: The Airbus jetliner is made by a European consortium.

Debby is no longer a hurricane, but forecasters say that may not last very long. South Floridians started stocking up on storm supplies today. A state of emergency was declared for Monroe county, prompting evacuations in the Florida Keys.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We are asking them, the tourists and non- residents, to leave the Keys immediately to escape any potential from this tropical storm or hurricane, whichever way it reaches us. We have closed our state parks and campgrounds. We have asked people with recreation vehicles and other high-profile vehicles to leave the Keys immediately and also people who have boats on trailers to also leave.

(END VIDEO CLIP)

SHAW: At last report, Debby was about 45 miles east of Haiti, moving west at 18 miles an hour -- top sustained winds: 60 miles an hour. Warmer water could strengthen Debby in the next three days.

When INSIDE POLITICS returns, we are going to follow the ads to get the story on the latest presidential campaign strategies.

(COMMERCIAL BREAK)

SHAW: You know tonight, many Americans will turn on their television to see a group of "Survivors" who have nothing to do with the presidential race. But, during the course of this evening, some viewers may also get an eyeful of campaign ads which will help determine whether Al Gore or George W. Bush is the survivor of election day.

(BEGIN VIDEOTAPE)

SHAW (voice-over): In week one of the general-election air-war, swing-state viewers are getting bombarded by an Al-Gore biographical ad.

(BEGIN VIDEO CLIP, GORE CAMPAIGN AD)

NARRATOR: Al Gore has his doubts, but enlists in the Army.

(END VIDEO CLIP)

SHAW: And a pair of George Bush spots, one on the need to focus on tough choices, the other on education.

(BEGIN VIDEO CLIP, BUSH CAMPAIGN AD)

BUSH: Now is the time to teach all of our children to read and renew the promise of America's public schools.

(END VIDEO CLIP)

SHAW: Each campaign is spending over five million dollars this week alone, with the sprawling Midwest swing-belt the prime target. Both campaigns are on the air in Missouri, Iowa, Wisconsin, Illinois, Michigan, Ohio, Kentucky, West Virginia, and the belt's eastern anchor, Pennsylvania.

Another major air-battle is underway in the Northwest in Washington and Oregon. Both campaigns are also up in Delaware, Florida, Arkansas and New Mexico. And Bush is running uncontested spots in Nevada, Georgia, North Carolina and New Hampshire. But the two richest electoral prizes, New York and California, are off this week's battle map.

Gore's selection of Connecticut Senator Joseph Lieberman may have taken the entire New York market our of play, at least temporarily. California is the nation's most expensive media market. Bush trails Gore there and has apparently decided he get more bang for the buck elsewhere.

(END VIDEOTAPE)

SHAW: Now, let's talk more about the campaign strategy behind these ads with Bush adviser Charles Black and Gore adviser Ron Klain.

Charles Black, starting with you -- the same question for you, Ron -- with most Americans on vacation and very few people zeroing in on this campaign, why are you spending all of this money so soon?

CHARLES BLACK, BUSH ADVISER: Well, you know, Bernie, actually a lot of Americans do begin to pay serious attention to the campaign after the national conventions. And there may be some folks on vacation. But all over America, a lot of parents at home getting ready to send their kids to the first day of school. So we think it is particularly appropriate for Governor Bush to talk about his strong agenda and plan for education, to improve education.

SHAW: Ron?

RON KLAIN, GORE ADVISER: Well, it's actually found something the Gore and Bush campaigns agree on. It is a time that voters are starting to focus on the race. We think they are asking questions about who these candidates are, what sort of leadership they want to bring, and what our agendas are for working families. And we think, obviously, on those questions, Al Gore is the much better choice. And we are happy to present some ideas about whole Al Gore is, where he came from, his experiences and his agendas as president. And advertising is one way to do that.

SHAW: What are you after, Charlie Black, in running these ads? Are you trying to flesh out the governor's positions or what?

BLACK: Flush them out and also put some detail on it. Governor Bush has made dozens, scores of detailed policy proposals during this campaign, and you can't expect the voters to remember or know all those details. And education is the top-priority issue to Governor Bush and the most important issue in the campaign, we believe. So starting with education and emphasizing his commitment to see that every child can read by the time that they finish the third grade is a good way to lead off.

It's interesting, though, that Vice President Gore, after 24 years on the national scene, is here in late August running a biography ad, trying to reinvent himself, reintroduce himself again after all these times.

SHAW: Do you see it that way, Ron?

KLAIN: Well, no, I think it's interesting to hear Charlie say education is their top priority. They have a tax cuts that spends 1000 times as much as Governor Bush wants to invest on education. It benefits the few, not middle-class families. It doesn't help families with their educational needs, health care needs in the same way Al Gore wants to.

The fact of the matter is, Governor Bush has an ad about hard choices. But I think the real question is, is he willing to join Al Gore in taking the hard stands in standing up to the HMOs for a patients' bill of rights, the drug coverage, fighting for prescription-drug coverage for seniors, the insurance companies to fight for coverage, health care coverage, Medicare coverage?

And we don't see that coming out of George Bush. It's no surprise he is running these ads to change the topic off of where the dialogue is. As we have seen this entire program, the topic is his tax cut.

(CROSSTALK)

KLAIN: And his tax cut plan, Governor Bush himself says, he is not doing a very good job of explaining.

BLACK: Well, Ron, you know, Clinton and Gore have had eight years to pass and sign a patients' bill of rights. Governor Bush has passed and signed a patients' bill of rights in Texas. And you will hear more from him about his proposal for the federal level, as well as prescription drug benefit.

(CROSSTALK)

BLACK: You know, a tax cut -- when you give a tax cut, the people get to spend the money. So they will get to spend 1000 times as much on their children, on their education, or anything else as opposed to the vice president.... (CROSSTALK)

KLAIN: If Governor Bush gave a tax cut to middle-class families, that would be true. But of course, even the Associated Press, the neutral Associated Press today said, that when it comes to in terms of raw cash, the wealthy cash in under the Bush plan. So, those middle- class families are not getting the help they need.

(CROSSTALK)

SHAW: Ron.

KLAIN: ... civil rights and Medicare coverage. We know George Bush doesn't support real provisions at the federal level.

SHAW: Ron.

BLACK: That's nonsense. You better stayed tuned.

(CROSSTALK)

BLACK: Even though you've had eight years to get them done and haven't, we'll have real plans, and we'll work on a bipartisan basis to pass them.

(CROSSTALK)

KLAIN: We've been fighting a Republican Congress, Charlie, and Governor Bush hasn't bothered to tell them to stand up to the HMOs, stand up to the drug companies. We know where Governor Bush stands.

SHAW: OK.

BLACK: It's Vice President Gore's job -- the taxpayers pay him to work on a bipartisan basis with Congress -- to get these things passed. He hasn't done it. When Bush is president, he will work on a bipartisan basis with the Congress to get things done that you've left behind.

SHAW: A question to each of you. Do you expect a shift in the polls in coming week, and if so, in which direction -- brevity, gentlemen?

BLACK: Well, I -- go ahead, Ron.

KLAIN: Well I think that the polls are very close. It's a competitive race. What I think will happen is the voters focus in on Al Gore's fight for working families, his willing to stand up to the HMOs, the drug companies, His efforts to cut taxes for middle-class families. They will move our way over the course of this election, and that's going to be a week-by-week process. I don't know what the polls will say any given week, but I think we'll win come November.

BLACK: Yes, Bernie, I think everybody expects a relatively close race. The key thing is going to be look at Labor Day at all of those battleground states you had up on the map, what you're going you see is that Governor Bush will be ahead, even if it's a small lead, in the majority of those states after Labor Day. Those are almost all states that the Democrats carried the last two times. We're fighting this election out on their turf, and that's how we're going to win.

KLAIN: The last quick question: Do you expect those key battleground states -- Pennsylvania, Ohio, Michigan, Illinois, New Jersey -- to get the bulk of your advertising dollars from now until November 7?

BLACK: I think -- and certainly those states are probably going to get more than their share of advertising dollars, but also California will and a few of the other states, but I suspect that both campaigns will be spending pretty heavily in those states that you named.

SHAW: And quickly to you, Ron Klain, on that point?

KLAIN: Well, I thought it was interesting, the Bush campaign did not go up in California this week, where their behind. I wonder if they're writing off California as they have in the past. We're going to compete in all 50 states. Al Gore is going to win come Election Day, Bernie.

SHAW: Ron Klain, Charles Black, gentlemen, thank you.

KLAIN: Thank you, Bernie.

BLACK: Thank you.

SHAW: You're quite welcome. Always good to have you.

And just ahead, education as a campaign issue: Kate Snow on both candidates and their plans for U.S. schools.

(COMMERCIAL BREAK)

SHAW: While George W. Bush takes a day off from the campaign trail, his running mate, Dick Cheney, is traveling through California. He's raising money and promoting the Texas governor's plan for education. The Bush proposal differs a great deal from that of his opponent, Al Gore.

Our Kate Snow takes a closer look at both plans and the issue of education reform.

(BEGIN VIDEOTAPE)

KATE SNOW, CNN CORRESPONDENT (voice-over): Some call it the Texas miracle -- schools held accountable for students progress, test scores on the rise. Governor Bush wants to spread the miracle.

BUSH: In my administration, we will have minimal regulation and high standards. We'll have local control of schools, with one national goal: excellence for every single child.

SNOW: In a Bush administration, states would have to develop standardized tests; than any school receiving federal money through Title 1, a program for low-income students, would have to show results of test scores.

BUSH: Those schools that won't teach and won't change will have three years to produce results, three years to meet standards, three years to make sure the very faces of our future are not mired in mediocrity.

SNOW: If a school fails, parents would get $1,500 and a choice: send the children to a private school, give it to a public school, or use tutoring. That proposal has drawn fire from Bush's Democratic opponent.

GORE: We need to invest more and demand more, not aim too low, and invest too little and drain resources away from public schools with private school vouchers.

SNOW: Bush's proposals would cost significantly less than Gore's, adding $13 billion to the education budgets over five years. That's one-fourth of what Al Gore claims he would spend.

Including in Bush's plan: money to teach and test early reading skills, to build more public charter schools, tax breaks and training for teachers.

GORE: You see, the goal here is not to spend the most or cut the most, but the goal is to improve the most.

SNOW: It's the same philosophy he's promoted in Texas. Since Bush took office in 1995, education spending is up 55 percent, including money for early reading and advanced-placement classes, and again, the focus on accountability. Texas children in certain grades will have to pass a standardized test to move on and high school students have to pass a test to graduate. Scores on state achievement tests have risen under Bush. In 1994, 53 percent of Texas students passed. By 2000, the rate jumped to 80 percent passing; 31 percent of African-Americans passed in 1994, that more than doubled in 2000.

But many of the accountability reforms were initiated under previous administrations, and some dispute the very notion of a Texas miracle. They say those test scores are inflated because younger children are spending so much time on test drills and older kids are dropping out before the test is even taken.

JIM HOFFMAN, UNIVERSITY OF TEXAS EDUCATION PROFESSOR: Teachers are teaching to the content that is covered in the test only. So we have a statewide curriculum that's quite comprehensive across many different areas, but most of those areas are not taught.

SNOW: Some say if Bush was were president, the emphasis on centralized standards would put Washington in control of the classroom, and the Bush campaign insists teachers would still be in charge, but the Bush White House would demand results.

Al Gore says the U.S. needs another revolution...

GORE: We ranked 18th out of 18 nations surveyed in 12th grade math.

SNOW: ... to put the nation's students on par with the rest of the world.

GORE: It's the very first proposal that I've made as a candidate for president, and that is to bring not small changes, not gradual improvements, not minor advances, but truly revolutionary advances in our public schools.

SNOW: The revolution won't be cheap. Gore would pump $115 billion over 10 years into an education reform trust fund. That's much more than his opponent George W. Bush would spend.

BUSH: There's no way that I can possibly outspend Al Gore on any program, any place, anytime in government. His motto is, vote for me, I'll spend more money.

SNOW: Gore says the investment will payoff, with more money to wire classrooms to the Internet, preschool for every child and smaller class sizes.

GORE: We've got to recruit more than two million teachers over the next two years.

SNOW: Gore proposes tuition breaks for college students willing to teach at needy school and pay raises for teachers already on the job.

But the vice president is also staking out positions that don't go over so well with teacher unions. In a Gore administration, teachers would be tested and states without certified professionals would lose funding.

Gore would encourage states to test their students, but unlike his opponent, he'd measure progress based on a national test. States and school districts would be required to identify failing schools. If those schools didn't turn around within two years, they'd be shut down and reopened with a new principal. That leads to the major difference between Gore and Bush. Gore would allow parents to move their kids from failing schools to better public schools, but he strongly opposes Bush's idea of giving parents money for private school tuition.

GORE: You can't reform public schools by draining money away from public schools into private school vouchers. That is a mistake.

SNOW: Critics question why Gore hasn't pushed harder for reform over the past seven and a half years.

NINA REES, HERITAGE FOUNDATION: This administration has talked a good talk about closing down schools that are not performing well. To this day, not a single one of these schools -- and there are over 6000 of them right now around the country -- not a single one of them has slut down.

SNOW: But Gore defends the Clinton administration record. He takes credit for wiring classrooms to the Internet, providing tax credits for college students, helping schools hire new teachers and expanding funding for Head Start.

(on camera): They are some of the same changes Gore is proposing for the future. Republicans say that's a sign Gore doesn't have any new ideas. But the Gore campaign counters, when it comes to education, the vice president is building on success.

Kate Snow, CNN, Washington.

(END VIDEOTAPE)

SHAW: Just ahead, is Louisiana's Republican governor changing his opinion about lawyers?

(COMMERCIAL BREAK)

SHAW: Louisiana Governor Mike Foster has spent five years criticizing the state's lawyers. Now he is studying to become one. The 70-year-old Republican joined fellow students as classes began this week at Southern University Law School. With more than three years left on his term as governor, Foster is only taking classes part time.

(BEGIN VIDEO CLIP)

GOV. MIKE FOSTER (R), LOUISIANA: I'm not ambitious enough to say I'm going finish; I'm going to go as far as I can, assuming I can take half courses for three and a half years, which I have left, with the year and a half left, maybe I would stay here and go full time for a year and a half. It's a lifelong ambition. Whether I can do it, I have no idea. All I can do is try.

(END VIDEO CLIP)

SHAW: Tomorrow Foster will have to cut class in order to attend a fund-raiser for Governor George W. Bush.

That's all for this edition of INSIDE POLITICS. we'll see you again tomorrow when both major presidential candidates will be discussing higher education.

Our Jonathan Karl will be with George Bush in New Orleans and Kate Snow will be cover Al Gore at the University of Maryland.

And of course you can go on-line all the time at CNN's allpolitics.com.

I'm Bernard Shaw. "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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