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Inside Politics

President Clinton Pushes Mideast Peace Proposals; Is California Governor Gray Davis Considering a Run for the White House in 2004?

Aired December 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)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I just have a limited number of days here before I leave office, and I'm trying to get as much done as I can.

(END VIDEO CLIP)

JEANNE MESERVE, CNN ANCHOR: President Clinton keeps pushing his proposals to bring peace to the Middle East. We'll have the latest on the negotiations. Meantime, the future president has gone fishing amid questions about whether he has hooked a Defense Secretary nominee. Plus:

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS (D), CALIFORNIA: Trust me. I'm trying to keep the lights on. That's all I can think of.

(END VIDEO CLIP)

MESERVE: Are the bright lights of the White House calling California Governor Gray Davis, even as he grapples with a power crisis?

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

MESERVE: Thanks for joining us. I'm Jeanne Meserve, sitting in today for Judy and Bernie.

We begin with the prospects for a Mideast peace deal on the eve of a planned summit in Egypt and at the sunset of Bill Clinton's presidency. The White House is studying a response received today by Palestinian leader Yasser Arafat to Mr. Clinton's proposals.

Details now from CNN's Major Garrett.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): President Clinton's historic bid for an Israeli-Palestinian peace hangs in the balance. CLINTON: They are closer than they have ever been before, and I hope and pray they will seize this opportunity.

GARRETT: The Israelis said they were on board, if the Palestinians were, too. The Palestinians said they needed to see the fine print.

SAEB EREKAT, CHIEF PALESTINIAN NEGOTIATOR: What you need here, you need details. You cannot go on vagueness. We're not seeking a declaration of principles.

GARRETT: The White House says it is reviewing a letter from the Palestinians demanding more details.

CLINTON: We'll see what happens. There's a lot of things going on now, and will be in the next several days. And I think, as I said, the less I say about them all, the better.

GARRETT: What Palestinian leader Yasser Arafat really needs, White House aides say, is a green light to negotiate from top Arab leaders. Clinton wants support from Arafat, and calls Wednesday to Saudi Arabia's King Fahd and Jordan's King Abdullah. More encouragement could come in Sharm el-Sheikh Thursday, where Egyptian President Mubarak has invited Barak and Arafat for further talks.

SHIBLEY TELHAMI, UNIVERSITY OF MARYLAND: Today the chances are probably no better than 50/50. But that's a lot better than it was two weeks ago when most people believed it was next to nothing.

GARRETT: A deal could hinge on tens of thousands of Palestinian refugees and access and sovereignty to religious sites in Jerusalem. Privately, the president's senior advisers believe both issues can be finessed. The Israelis could give Palestinian sovereignty over the Temple Mount, but retain visitation and archaeological rights.

The Palestinians could drop demands for the returns of refugees in exchange for an Israeli apology, and international financial compensation.

(BEGIN VIDEOTAPE)

GARRETT (on camera): In ways that were not true at Camp David, the outlines for a peace deal are there for all to see. Israelis and Palestinians are trying to marshall public support for excruciating compromises that lie ahead, and for the first time in weeks, the White House is more optimistic than gloomy -- Jeanne.

MESERVE: Major, can you quantify that? How optimistic are they? Is it a very cautious optimism?

GARRETT: Capital V, capital C. "Very Cautious." But, behind the scenes, White House senior advisers tell CNN, that despite some public utterances from the Israelis and the Palestinians suggesting retiscence, behind the scenes the comments are very favorable. They sense a movement toward a final com -- negotiating session, rather, that might look like a second Camp David summit here in Washington. But first and foremost, they need a green light for Mr. Mubarak tomorrow in Sharm el-Sheikh, Egypt; then private meetings here at the White House between Mr. Clinton and Mr. Arafat, then Mr. Clinton and Mr. Barak, then perhaps a Camp David-style summit to secure the final deal -- Jeanne.

MESERVE: Many miles to travel on that front, but the president has forged ahead on another, and made an appointment to the bench today. Tell us about that.

GARRETT: Yes, he did. He appointed to the Fourth Circuit Court of Appeals, a Virginia litigator named Roger -- forgive me, Jeanne. Can you help me here?

MESERVE: Roger Gregory is the name.

GARRETT: Thank you very much. He was appointed to the Fourth Circuit Court of Appeals, a circuit that has never had an African- American sit on its bench. The president filled the vacancy more than 10 years old. He originally nominated Mr. Gregory in June, but the Senate Republican leadership stalled on that nomination -- wouldn't even grant Mr. Gregory a hearing, something the president complained about when he introduced them to the press corps today.

The president made the recessed appointment, noting it's somewhat unusual, but he said he wanted to fill this vacancy, because the Fourth Circuit has five vacancies of its 15 seats. So there was a judicial emergency in that circuit, and it needed a jurist and he wanted to make sure it was African-American jurist, because as the president said the Fourth Circuit has the largest concentration of African Americans of any circuit court in the country -- circuit district in the country, said it was an injustice that for so long it had not had an African-American on the bench, and said that diversity of voice and principle would help that circuit court deal with all its many cases -- Jeanne.

MESERVE: Major Garrett at the White House, thanks.

And now we turn to the president-elect, George W. Bush. He continued his Florida vacation today with outdoor sports on his agenda and his next round of Cabinet nominations apparently very much on his mind.

Our senior White House correspondent John King is with Bush in Boca Grande. John, what's the latest?

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Jeanne, let's start with that late hour Clinton judicial appointment. In private, Bush aides very critical of that. They view this as a highly politicized appointment. They believe Mr. Clinton tried to poison the atmosphere, as Governor Bush, now President-elect Bush pushes ahead with the confirmation of his most controversial nominee so far, Senator John Ashcroft of Missouri for Attorney General.

But in public, the Bush campaign sticking to a line we've heard since the election, that the United States has just one president at a time, and that they will not publicly criticize President Clinton, but, they said, President Bush, come January 21st, will review all of these actions being taken by President Clinton in his final days.

As you mentioned, this a two-day mini-vacation here for the president-elect in Florida -- a fishing trip this morning; the president-elect along with the former president, heading out for some fishing this morning. The president-elect joking, even before he went out, assumed he would catch a big one.

He did talk to reporters just a little bit. He said he's been working the phones in search for a Cabinet and he told those reporters to stay tuned.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: Nobody is out of the running. I'll be making an announcement -- hopefully a couple of Cabinet secretaries here in the next couple of days.

(END VIDEO CLIP)

KING: At least one announcement in Washington tomorrow, we're told. Perhaps others on Thursday and Friday. We know one of them will be, according to Republican sources, Republican Governor Tommy Thompson for the Department of Health and Human Services. President- elect Bush also prepared to round out his White House staff. Top campaign strategist Karl Rove will be coming in, in a major political capacity.

Top economic adviser Lawrence Lindsey will be joining the White House staff as well. After that fishing trip, there was a family luncheon, then it was back on the golf course for a second day in a row. The president-elect golfing with his brother Jeb, who is the governor here in Florida, and two long-time family friends. As he prepares to tee-off on hole number five, the Texas governor -- now the former Texas governor, soon to be president, turned to reporters and said he wasn't so accustomed to golfing with so much attention.

(BEGIN VIDEO CLIP)

BUSH: I must confess I'm not quite used to this "golfing in front of people" thing.

QUESTION: Got to get used to it.

BUSH: I did rise to the occasion.

(END VIDEO CLIP)

KING: A little more relaxation on tap here tonight. The president-elect heads to Washington first thing in the morning. As we mentioned, some Cabinet announcements -- also some interviews with potential Cabinet members in Washington, then he'll head back to Texas on Friday night and spend the New Year's eve holiday weekend at his ranch near Crawford -- Jeanne.

MESERVE: John King in Florida. Thanks so much.

And we're joined now by Margaret Carlson of "Time" magazine and Rich Lowry of the "National Review." Thank you both for coming in today. One of the big gaps in the Cabinet still: defense secretary.

Rich, if Dan Coats doesn't get that, are conservatives going to be upset or not?

RICK LOWRY, "NATIONAL REVIEW": No, I don't think so. It's a bit of a strange spectacle as a president-elect who campaigned so strongly on defense having such trouble filling this position. I think Coats is still the front runner. But, a lot of speculation in defense circles that this is what may have happened, is that Coats really wants to know he'll be running defense if he's put there, and he's worried about a pincer movement.

We have a strong secretary of state, in the person of Colin Powell and also a very strong presumptive number two of Defense in the person of Dick Armitage, who's very close to Colin Powell. So you have Coats saying to Bush: Well sure, maybe I want this job, but only if I know I'm actually running the place. And people speculate that Bush, who can be -- would have found something like that, kind of off- putting. And that may be the reason why we have the uncertainty ongoing in this position.

MESERVE: Margaret?

MARGARET CARLSON, TIME MAGAZINE: And you also have Dick Cheney, who once ran it, perhaps second-guessing whoever is there, so the job is not as shiny as might otherwise be. Conservatives have also been placated by the Ashcroft nomination, so that they may not be agitating quite as much now for Coats as they were. So if Bush doesn't do it, there's no real price to pay.

MESERVE: Not agitating for defense secretary. But Rich, there are other positions that are very important to the conservatives, aren't there?

LOWRY: Well, I think Margaret has a point. The atmospherics have changed around Defense appointment from a week ago, because -- Conservatives wanted a big appointment and they got it in John Ashcroft so they're not pushing Coats quite as hard, and also Senate Republicans, who have been Coats' biggest advocates, get one of their own in the form of John Ashcroft. So the pressure behind the Coat's appointment may have let up a little bit.

MESERVE: About the Coats appointment, but aren't there other positions yet to be filled, that conservatives are concerned about?

LOWRY: HHS is a big one, and it seems conservatives are going to get a friend there.

MESERVE: Surgeon general?

LOWRY: Surgeon general: Tommy Thompson, of course. But I think Ashcroft changed the coloration of this whole Cabinet for conservatives, and they understand the difficult circumstances that Bush is in here and the need to have some ethnic and geographic and political diversity in the Cabinet. And so conservatives, I think, are fairly satisfied with what they see. I mean, they're delighted that Christie Whitman is at EPA given the other possibilities for her.

MESERVE: Talk about that diversity in the Cabinet.

CARLSON: Well, it's a remarkable achievement, given that Clinton said he was going to have a Cabinet that looked like America, and Bush actually has a Cabinet that looks like America. And he's done it keeping conservatives somewhat in line and disciplined, just as he did during the campaign. They held off criticizing him. And they're not really criticizing him now.

MESERVE: What's the point for George W. Bush of having a Cabinet that looks like America? African-Americans, for instance, are unlikely to flock to his camp whether he has Colin Powell in his Cabinet or not.

CARLSON: You know, maybe he actually believes in it. I know this would be utterly, utterly shocking. But we may find out that he is actually a compassionate conservative, that it wasn't a stance for the campaign, and it wasn't just theatrics at the convention, that he wants to bring people in. And it may not pay off for him right away.

LOWRY: Here's another stunning thought. I think Colin Powell and Condi Rice are both qualified for the jobs and make a lot of sense on the merits. And, as far as the conservatives go also in the consideration of what is going on here, I mean, I think they have their eyes on two big prizes, which is policy and judges. And if Bush stays true to the policies he campaigned on -- which he has given every indication of so far -- conservatives will be very happy.

And if they get the judges they want, they'll be very happy, although that is obviously a dicier proposition.

CARLSON: And Bush is having good luck in that John Ashcroft will elicit a huge uproar on the left.

MESERVE: Already has.

CARLSON: Already has. And so conservatives will take even more comfort from the appointment as a result of that. Yet, because Ashcroft is a former senator, he'll surely be confirmed.

MESERVE: So why are the liberal advocacy groups putting up this kind of a fuss? They know the guy is going to get through.

CARLSON: Well, because for their base, and because, actually, he isn't going to be, given his past stances, good for minorities. It's a job which can make a difference. And, in fact, his record is not favorable to civil-rights liberals.

LOWRY: Well, you can argue about what constitutes policies that are good for minorities. But we won't get into that. But there is a ritual aspect to this as well: that you have to sort of eat someone up. There has to be some bloodletting. And it seems clear Ashcroft is the target.

CARLSON: That, he is.

MESERVE: Margaret, do you have a sense of deja vu when you look at this Cabinet now that it's coming together?

CARLSON: Well, my colleague, Michael Duffy, said that he expected the Bush restoration. But instead, he is getting the Ford restoration.

(LAUGHTER)

CARLSON: And Donald Rumsfeld, we hear, is going to be the CIA choice. And that kind of now has a Ford-Cheney feel to it all over the place.

LOWRY: It's a Nixon-Ford renaissance here.

MESERVE: Let me switch gears on you here: talk about the Middle East for a little bit -- President Clinton investing a lot in trying to get this process moving. Rich, why is he doing this at this late hour? I mean, what's the point?

LOWRY: Oh, I think it's clear that he is doing this because he has his legacy in mind. And he would like a Nobel Peace Prize, which is something nice to have on your mantle. I doubt it is going to go anywhere, because you have two lame ducks in the persons of Clinton and Barak sort of desperately trying to force a deal through. And I don't think the Palestinians are going to go for it, because they smell blood in the water.

And they are beginning to doubt the power and the resolve of the Israelis to keep fighting this dispute. So they are just going to keep pushing and pushing and pushing, I think.

MESERVE: Margaret, do you agree with that analysis?

CARLSON: In some ways. I mean, the Palestinians have simply refused to recognize the good deal that has been put in front of them. They may not do it now. However, once -- if they -- if this is rejected, the momentum dies. And they're back in a kind of quagmire where it will take a lot of time to get up to this point again.

MESERVE: And couldn't that be an incentive for the Palestinians, like everyone else

(CROSSTALK)

CARLSON: This is the last chance. And Clinton is putting a lot on the line to make this his swan song as he goes. Elvis is not leaving the building. He's having one last crack here.

LOWRY: That's the other point. This is such a big deal. And you think the seemly thing for a lame duck to do would be to leave it to the next guy. But Clinton is not into leaving anything to the next guy. MESERVE: And Elvis is doing some house-hunting, too.

CARLSON: Yes. Mrs. Elvis is not leaving the building either.

(LAUGHTER)

CARLSON: They're both going to be here, maybe smack in the middle of Georgetown or Wesley Heights, or, you know -- they're here to stay. MESERVE: In a pricey house, it looks like.

CARLSON: Yes, well, there's an $8 million advance to spend.

MESERVE: That's right. And real estate is expensive here. We have to give them that justification, don't we?

CARLSON: Well, yes. Not $4 or $5 million worth, right, Rich -- unless you live in one of those houses?

LOWRY: Those opportunities aren't open to journalists, I don't think, unfortunately.

CARLSON: No.

MESERVE: Rich, Margaret, thank you both for joining us.

CARLSON: Thanks.

MESERVE: Appreciate it.

And California faces major problems with electricity. Will that dim the glow of a political star? When INSIDE POLITICS continues, we'll hear from California Governor Gray Davis. Stay with us.

(COMMERCIAL BREAK)

MESERVE: With his political reputation and future aspirations on the line, California Governor Gray Davis went to the White House today seeking help to try solve his state's severe energy crisis. Golden State consumers have been hit by power shortages and rising energy bills, a result of California's 1996 state energy deregulation.

For their part, utility companies say they're facing bankruptcy unless the rates are hiked even more. I sat down with Governor Davis after he met with President Clinton to discuss the possibility of federal help. I began by asking him what he was hoping to achieve here in Washington.

(BEGIN VIDEOTAPE)

GOV. GRAY DAVIS (D), CALIFORNIA: Well, it's my hope that the Federal Energy Regulatory Commission will realize the wisdom of reimposing a price cap in the West, if not just for California. The price cap that was in place was $250 per megawatt hour. That allows any generator to make about a 500 percent profit. Since they lifted it about three weeks ago, the prices have gone as high as $1,500 a megawatt hour.

So utilities, who by law, could only charge $58 to customers, are obviously in a huge squeeze, having to pay $1,500 for something they can only charge $58 dollars for. That is the nub of the problem we are dealing with. But we will manage it. We will get through it. And two years from now, this will be a -- hopefully a distant memory.

(OFF-MIKE)

DAVIS: They've been very unresponsive. And I think they miscalculated, because they thought raising the price would assure California had plenty of power. But four days after they raised the price, 13 generators withheld any power saying: We don't think the utilities have enough money left to pay us. So, clearly, that -- the theory on which the price cap was lifted didn't work.

And now the question is: Can we manage this situation until we have enough conservation and enough new plants to bring pricing -- supply into line with prices -- supply into line with demand?

MESERVE: The Public Utilities Commission in California is meeting now, as I understand it. Is a rate hike inevitable?

DAVIS: I think everyone has to be part of the solution. The consumers will have to pay some of the cost -- not all of the cost -- of this failed experiment. I'm looking for a transition to deregulation, which would involve a price cap, at least in California, hopefully in the West, some -- probably some modest rate increase -- the PUC will decide that, and much more conservation than we've had to date.

MESERVE: Modest? Some people are talking about 17 percent and wouldn't that rate hike, in the view of some, be in essence a bail out of the utility industry?

DAVIS: Here's the problem. If the utilities go bankrupt, there's no one to supply the power. The lights go out. My constituencies are the citizens and the businesses of California, who I might add, are contributing enormously to our current national growth. So, America needs Californians to succeed and I don't want some experiment called deregulation of electricity to drag our economy down and drag down the national economy. Deregulation is not the goal; the goal is a strong, vibrant economy.

MESERVE: How do you do it? How do you get people to decrease their demand for electricity...

(CROSSTALK)

DAVIS: I think you...

MESERVE: ... and to increase generating capacity, especially in the short-term?

DAVIS: Well, nothing can happen overnight, but we have under construction today six power plants. None have been built in the last 10 years; only six in the last 60 years. So, we are doing our part, and we'll probably have another five to six on top of that. That'll take a couple years. We need to tighten our belt and make sure when we use power, it's not between the pivotal hours of 5:00 and 7:30 at night.

MESERVE: Is reregulation the answer here?

DAVIS: I like to put it this way: If your leg was broken and you went to a doctor and the doctor said let nature take its course, you'd say no, no, doctor. Put a cast on my leg, and when the leg gets better, take the cast off. We're going to put a cast on the system until it gets better then we'll take the cast off.

MESERVE: Now, in the midst of all this, a government agency in California is talking about buying water from a private concern, when you have seen in the instance of electricity, the tremendous effect, sometimes unanticipated, that free market forces can have. Is it time to move to free market sorts of deals on another important commodity -- water?

DAVIS: Well, I wasn't consulted in that transaction, and obviously I have hands full.

(CROSSTALK)

MESERVE: But are you concerned about it?

DAVIS: I think water and electricity and air are the necessities of life, and based on how deregulation of electricity has not worked in California, I'm not too excited about deregulating another commodity.

MESERVE: Are those sorts of issues a neutron bomb for a politician like yourself?

DAVIS: Well, it's not the happiest thing I can do, but I was hired on to bring stability, to make decisions and I'm going to do it. We will get through this issue. It requires some changes, including more conservation, more power coming online, and hopefully a better approach by the Federal Energy Regulatory Commission than they've shown to date.

MESERVE: We're about to have a change in administration. Governor Bush is an advocate of free market forces. He comes from the energy industry himself. Are you under some pressure to find a solution here before Inauguration Day?

DAVIS: Well, obviously, we want to do as much as we can as quickly as we can. But I've talked to Governor Bush about this issue -- President-Elect Bush, that is, and I have talked to him when he was governor in June of this year, He, like all governors, are pragmatists. They want things to work, and I don't think that George Bush will be blinded by ideological concerns. I think he wants to be as helpful to California as Bill Clinton was to California and he can start by helping us solve this deregulation problem in California. MESERVE: Does he want to be helpful in part because he is courting California? He has just named a Californian, Ann Veneman, to be his secretary of agriculture. Is he putting on the full-court press here to win your state?

DAVIS: I certainly hope so, because that means he'll be attentive as President Clinton and Vice President Gore were to California's needs. And we're about 12 percent of the population, a little more than that in terms of our contribution to the national economy, and so, if he's trying to win us over, we welcome the attention and hopefully can begin on deregulation.

MESERVE: Now, what about yourself? A Democratic consultant said recently Gray Davis has not only put his toe in the water in New Hampshire, he's put in his whole foot. New Hampshire, of course, being the site of the first in the nation primary?

DAVIS: Trust me, I'm trying to keep the lights on. That's all I can think of. I'm going to focus on that, and finish my term and presumably run for reelection. I have no other national agenda except to head up the Democratic Governor's Association this year. That's plenty for my plate.

MESERVE: Are you interested in 2004?

DAVIS: I'm not -- it's not on my radar screen. I'm not thinking about it, and frankly, I don't have time to think about it.

MESERVE: But you're not crossing it off, either?

DAVIS: Well, nobody crosses out anything in life, but believe me, if you saw what it's like to be governor of California. I was talking to Governor Bush when he was out visiting with us. His legislature did not meet in the year 2000. Mine meets for 200 days every year. This is a full time job, running the sixth largest economy in the world, and it takes all of my energy to do it.

MESERVE: Of course, that election is four years away. We've just completed a very complicated and drawn out one. Some Americans are voicing concerns about the legitimacy of Governor Bush's win. Are you?

DAVIS: I think we have to accept him as our new president. Would I prefer that Al Gore be president, absolutely. I was his chairman in California, and I'm delighted Californians gave him a 1.3 million victory -- not votes, that was the margin of victory in California. But he apparently won the Electoral College. He's going to be sworn in. He's going to be my president. He's going to be your president, and hopefully work together to solve problems. Most Americans are not ideologically driven. They want things to work. They particularly want governors to function that way, and as a former governor, i think he will be mindful of that approach when he deals with governors.

MESERVE: And they certainly want their utilities to work? DAVIS: They don't want them to go up. And they want the lights to go on when they flip the switch and they don't want the bills to go up.

MESERVE: Governor Gray Davis, thanks so much for joining us.

DAVIS: Thank you, Jeanne.

MESERVE: And there is much more ahead on INSIDE POLITICS. Up next:

(BEGIN VIDEO CLIP)

GENE RANDALL, CNN ANCHOR (voice-over): Census results may not cause a political earthquake, but there are always major party tremors.

(END VIDEO CLIP)

MESERVE: Gene Randall previews Census figures due out tomorrow. Also ahead:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I think what really they loved more than anything was this country kitchen.

(END VIDEO CLIP)

MESERVE: Insights into the first family's search for a new Washington home. Plus, reflections on presidents at play. How does George W. Bush's vacation style compare to his predecessors?

(COMMERCIAL BREAK)

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

Police Investigators in suburban Boston say massacre suspect Michael McDermott had stockpiled weapons at his home and workplace. Today McDermott pleaded not guilty to yesterday's murders of seven co- workers. In court, his attorney said his client underwent psychiatric counseling recently, and a co-worker says that a threat of garnished wages led to an angry outburst last week by McDermott. McDermott is being held without bail.

In southern California, Robert Downey, Jr. has pleaded not guilty to felony drug possession charges. The actor was mum at a hearing today, but his attorney said that Downey is optimistic despite his latest drug arrest. Police arrested Downey at a resort last month after receiving an anonymous tip. Downey faces felony possession charges for cocaine and Valium and a misdemeanor count for being under the influence. He's free on bail with a court date set for next month.

Arkansas Governor Mike Huckabee says a paralyzing and deadly storm struck his state with the power of a nuclear bomb. Two inches of ice snapped power lines, closed roads, toppled trees and left hundreds of thousands of people without power. The National Guard is conducting search-and-rescue missions in Humvees. Newspapers are closed. And even the postal service is shut down. In Oklahoma, several towns are without water. The roads are a mess. And now there's a shortage of sand and salt. A state trooper told reporters -- quote-- "Tell everyone to stay out of Oklahoma."

And what's the outlook for the Southern Plains states? Karen Maginnis joins us with the latest on the weather forecast.

(WEATHER BREAK)

MESERVE: Ford Motor Company has settled at least seven personal- injury lawsuits related to problems with Firestone tires on its Explorers. Details of the settlements remain private. However, an attorney handling some of the cases says Ford expressed heartfelt condolences to his clients.

And when INSIDE POLITICS returns: making sense of the census. We'll talk to analyst Charlie Cook about numbers due out tomorrow and the political battles likely to follow.

(COMMERCIAL BREAK)

MESERVE: Tomorrow, the first numbers are due to be released from the biggest recount of this election year: the 2000 census. Those figures are of vital political interest on a number of levels, since they are likely to have an impact on the next election.

CNN's Gene Randall has a preview.

(BEGIN VIDEOTAPE)

GENE RANDALL, CNN CORRESPONDENT (voice-over); It is like the shifting of tectonic plates. Census results may not cause a political earthquake, but there are always major-party tremors. Why? Those figures dictate the number of seats allotted to states in the House of Representatives for the next 10 years. And they trigger redistricting by the state legislatures: always a partisan battle.

TIM STORY, NATL. COUNCIL ST. LEGISLATURES: It's going to be a pretty bloody fight in a number of states, especially those states that are either gaining seats or losing seats.

RANDALL: The nonpartisan consulting group, Election Data Services, previews Thursday's winners and losers. Its projections give Arizona, Texas and Georgia two additional congressional seats apiece. Gaining one each: California, Nevada, Colorado and Florida. On the other side of the ledger: New York and Pennsylvania figure to lose two seats each; Connecticut, Ohio, Illinois, Wisconsin, Oklahoma and Mississippi, one apiece -- a reflection of population shifts that both parties will try to exploit when congressional districts are redrawn by state legislatures.

REP. TOM DAVIS (R), VIRGINIA: Good news for Republicans is: We will control more seats at the redistricting table than any time since the 1920s.

REP. MARTIN FROST (D), TEXAS: Of course, our districts are equal population within states. But within those states, all you have to do is shift a line a little bit here and a little bit there, and it makes a big difference politically in terms of who's elected.

RANDALL (on camera): A little bit here and a little there, as in the fine art of gerrymandering: redrawing congressional districts to fit the needs of the party that controls the state legislature. And with a House of Representatives so evenly divided, what seems certain is a redistricting process ahead that will be more contentious than ever.

Gene Randall, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And now let's talk more about the politics of the census with Charles Cook, of the "National Journal."

Is it right that, because the Congress and the country are so closely politically divided, that, in a way, this redistricting is more important than some others?

CHARLES COOK, "NATIONAL JOURNAL": Well, I don't think you are going see huge shifts towards either party because, as you said, the country is pretty evenly divided. But when you have the House of Representatives this close -- just five seats between the two sides -- then every single seat is critically important. So you do redistricting, it is going to make all the difference in the world.

MESERVE: And let's look at the winners and losers here. Gene pointed out that the winners will be Arizona, Texas, Georgia, California, Nevada, Colorado, and Florida. Losing seats will be New York, Pennsylvania, Connecticut, Ohio, Illinois, Wisconsin, Oklahoma, and Mississippi. Is this a clear advantage for one party or the other?

COOK: What you generally see is, it's moving from the Rust Belt to the Sun Belt. And that typically hurts Democrats in the Rust Belt, helps Republican in the Sun Belt. But then you have a second trend, where you've seen movement from urban areas into suburban areas -- which hurts Democrats -- and from rural areas to suburban areas, which typically hurts Republicans. And so there is probably a slight, slight Republican advantage in this. But, really, it's not a huge difference.

MESERVE: Of course, one of the things that is really crucial here is who controls the state legislatures in those states where districts are going to have to be redrawn.

COOK: Right, and what you have is you have 17 states where Republicans control both legislative chambers and the governorship. You have 16 states where Democrats control the governorship and both chambers. And then you have 26 states where you have a governor of one party and at least one legislative chamber of the other party, meaning that neither party really dominates the process.

But the funny thing about 1991, '92 redistricting is that you really didn't see a hard-edge gerrymander anywhere in the country -- with one notable exception in Georgia, where the speaker of the house tried to do in Newt Gingrich. So Gingrich just sort of hopped over to a different district. But on a state level, you really didn't see it anywhere in the country. I think the process is a lot more transparent than it used to be.

And it's harder to just stick it to the other side.

MESERVE: But with the stakes so high, do you think there will be some nasty battles?

COOK: Oh, sure. There are going to be nasty battles, and each side trying do the other side in. But it's just -- it's a lot harder to do than it used to.

MESERVE: Now, this redistricting will be different than those in the past, or those 10 years ago, 20 years ago, won't it? Tell us about that.

COOK: This is going to be a little different, because you have got the Voting Rights Act that basically governs how you draw lines, to a certain extent. And back in 1980s, for example, when they drew the maps, the interpretation of the court decisions was that, if you could draw a minority district, you ought to try, so that a minority could get elected. You ought to try.

But in the next 10 years, there were a series of court decisions that led people to believe that the then-prevailing interpretation was that, if there was any way you could possibly draw a minority district, you had to. And that's when you got some really weird- looking districts. And legislatures went to enormous lengths to draw these minority districts. And what it did was, it pulled minority group members from miles around and packed them into these districts, which created minority districts.

But it made all of the adjacent districts very, very white and much more Republican. And then, since then, you have seen a series of court decisions that said: No, that's going too far. You can use race as a factor, but not the only factor. And so we are sort of going back to the earlier interpretation: that you ought to try, but you can't go too far.

MESERVE: Well, what is the impact of that likely to be? Could it mean a decrease in minority representation in Congress?

COOK: It won't mean a decrease. But it might prevent there from being a significantly greater increase beyond what we have now. On a partisan level, it really hurt Democrats 10 years ago. And so Democrats won't be getting hurt in this redistricting because of these racial districts in the same way that they were 10 years ago. So Republicans have a slight edge in terms of power where these maps are being redrawn. But the different Voting Rights Act interpretation tilts it back towards Democrats. And so it's kind of a wash. MESERVE: There is all kinds of redistricting lore. Do you have a favorite story about it?

COOK: Well, my favorite was back in the '70s, I guess it was -- or no, it was in the '80s, where Republicans in Indiana, they decided they wanted to decimate Democrats. And they wanted to just do them in so that Democrats would have only one district in the whole state. And what they did by trying to nail all the Democrats, they sliced their own districts so thin that they ended up losing three or four seats. And Democrats ended up with almost half the delegation, because Republicans got greedy and tried to go too far.

MESERVE: Now, I know you've said there are r's that are key to the 2002 elections. Redistricting is one. What are the other two?

COOK: Retirements. You always have a lot of retirements in these redistricting elections, where new members come -- or members, all of a sudden, they have got a lot of new constituents who don't know them. Or maybe there's some of their best territories taken out. So that's one. And the other is recession. In other words, how is the economy doing? If the economy is doing well, then there is not a lot of turnover.

If there's a lot -- if the economy is doing badly, there is. And then finally there's the president's performance. So those are the four big factors: redistricting, retirements, economic performance and presidential performance.

MESERVE: So you are not ready to make any predictions yet about 2002, are you?

COOK: Only a lunatic would make predictions this far out.

MESERVE: And we know you are not one.

COOK: Absolutely. I'm chicken.

MESERVE: Charlie Cook, thanks so much for joining us.

COOK: Thank you.

MESERVE: OK.

And it seems like just yesterday that Bill and Hillary Clinton were looking for a new house in New York. Now they are looking for a house here in Washington. We'll have a progress report when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

MESERVE: The Washington real-estate market always picks up after elections, as new members of Congress search for homes. One senator- elect is getting special scrutiny as she and her husband look for a place to live.

CNN's Kate Snow has the latest on the house-hunting efforts of Hillary and Bill Clinton.

(BEGIN VIDEOTAPE)

DIANE SHEARIN, WASHINGTON HOMEOWNER: I think what really they loved more than anything was this country kitchen.

KATE SNOW, CNN CORRESPONDENT (voice-over): Diane Shearin says her Washington home was at the top of Hillary Clinton's list. For about a month, the new senator talked with Shearin's realtor about renting the four-bedroom, five-bath house. Then last Friday, a surprise offer from the Clintons: They would buy the gated property, but for less than the $2.2 million price. When Shearin asked them to come closer to that mark, the Clintons withdrew.

SHEARIN: They loved the house. I knew that there was a short list, but my understanding was that we were top of the short list. I don't think it was a price issue.

SNOW: The White House won't say what the issue was. But it may have been a security concern. One of the contingencies on the offer was a Secret Service inspection.

CHARLES VANCE, FMR. SECRET SERVICE AGENT: They are going to look at what's around it, what proximity -- your other homes, what's above it, what's below it, what has a view of it, how do you get in, how do you get out. They'll take a look at the whole house, from soup to nuts, and just determine how they can -- they'll look for vulnerable points.

SNOW: Another house passed up by the Clintons: an 1870 mansion formerly owned by Jacqueline Kennedy's mother, listed for $4.4 million. Sothebys' agent, Bill Moody (ph), says the Clintons liked the 11,000 square-foot house, but decided against the urban Georgetown location.

(on camera): Washington has one of the tightest real-estate markets in the country right now. Even in that upper bracket of homes priced at more than $1 million, realtors say there are many more buyers looking than there are homes for sale.

(voice-over): The first lady has expressed her frustration at times, joking with the media about the endless searching.

HILLARY RODHAM CLINTON (D), NEW YORK SENATOR-ELECT: Do you got any suggestions? Or anybody have any place that you'd like to talk to me about privately? I'd be glad to hear it.

SNOW: It took several months to choose their house in Chappaqua, New York. Aides deny reports the Clintons plan to sell that $1.7 million home. In Washington, Hillary and Chelsea Clinton started quietly looking only weeks ago.

NANCY ITTEILAG, SHEARIN'S REALTOR: In the market over $1 million, it can take anywhere from three to twelve months to find the right house. SNOW: Last Saturday, they took the president to their top choices, slipping out of the White House without the usual news camera in tow. They don't have much time to waste. The inauguration is less than a month away. And there's no way to renew their lease.

Kate Snow, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And speaking of real estate, some office space is opening up in Midtown Manhattan. The New York chapter of the League of Women Voters plans to close its office next month because of financial problems. The chapter receives no funding from the league's national headquarters. And the monthly $1,300 rent has become a burden for chapter members, most of whom are 60 or older. The chapter sought corporate donations to keep the office open, but officials say there was little interest in funding the nonpartisan group, which sponsors local political debates and publishes voter-information guides.

The president-elect has gone fishing. But our Bruce Morton is still on the job. He'll tell you how previous presidents liked to spend their leisure time -- when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, "ALL THE PRESIDENT'S MEN")

JASON ROBARDS, ACTOR: You guys are about to write a story that says the former attorney general, the highest-ranking law enforcement officer in this country is a crook. Just be sure you're right.

(END VIDEO CLIP)

MESERVE: He won an Oscar for his role in the Watergate-era political thriller, "All the President's Men." Actor Jason Robards has died of cancer at age 78. His dignified demeanor also lent itself to presidential roles. At various times, Robards played Abraham Lincoln, Ulysses S. Grant and Franklin Delano Roosevelt.

President-Elect Bush plans to return to Washington tomorrow. But as we heard earlier, he's been fishing and golfing today in Boca Grande, Florida.

As our Bruce Morton reports, presidents through the years have enjoyed a variety of diversions in their time away from the White House.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Franklin Roosevelt, who'd had paralysis, liked to go to Warm Springs, Georgia -- he had a lodge there -- and swim.

Dwight Eisenhower was a golfer; the first in a modern string of presidential golfers. Critics said Ike liked golf more than he liked being president, but the voters didn't mind; he won two landslides.

John Kennedy? The family famously played touch football, and we have home movies of Kennedy on a boat with his kids, with horses and his kids. He didn't ride. His wife and daughter did.

Lyndon Johnson? He liked to go to his ranch. We're not sure what he did there. The press usually stayed in Austin. But he did get in trouble once for driving guests around the ranch and flipping a beer can out of the car as he drove.

Richard Nixon golfed a little, but his heart wasn't in it. Hung out in Florida with his friend Bebe Rebozo. But what he liked was being president; being in charge and wearing a suit suited him just fine.

Gerald Ford was and is a genuine athlete -- college football player, golfer, skier, you name it. Jimmy Carter jogged, and as an ex-president, has worked with his hands, putting up houses for people who need them.

Ronald Reagan? The White House reporters' favorite. He went to the ranch, rode, cut brush. They enjoyed Santa Barbara, with the Pacific Ocean right there whenever they wanted it. George Bush coined the word "re-create," as in, "I'm here to re-create," and he did. Jaunts in the cigarette boat, fishing, golf at what seemed like 90 miles an hour, and quiet times in Kennebunkport, Maine -- a truly pretty place.

Bill Clinton golfs, and, in his first term, he often jogged, though cynics said he was harder on Big Macs than on his running shoes. And now a new man. We know he runs; we know he fishes; works out most days, they say. But that's private. Reporters are unlikely to be asked, or to want, to join in.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And that's all for this edition of INSIDE POLITICS, but, of course, you can go online all the time at CNN's allpolitics.com; AOL key word, CNN. I'm Jeanne Meserve. "SHOWBIZ TODAY" is up 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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