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Inside Politics

George W. Bush Reaches Back to the Past for Defense Secretary; A New Blast of Mideast Violence; Clinton Charts Budget Surplus

Aired December 28, 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)

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: He's going to be a great secretary of defense again.

(END VIDEO CLIP)

JEANNE MESERVE, CNN ANCHOR: George W. Bush reaches back to the past to fill a gap in his national security team.

A new blast of Mideast violence further complicates the current president's push for peace. Plus:

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Even though I told you, I'd never draw another one of these charts. This is the last time I will do it.

(END VIDEO CLIP)

MESERVE: Mr. Clinton charts the budget surplus and sends a message to the president-elect.

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

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

There had been grumblings about when President-elect Bush would name his choice for defense secretary, and whether that person could stand toe to toe with Dick Cheney and Colin Powell. Today, Bush responded by nominating a Pentagon chief who knows the players and the job. After all, he served in the post before.

CNN's John King reports on Donald Rumsfeld's call to a second tour of duty.

(BEGIN VIDEOTAPE)

BUSH: Good afternoon. Thank you for coming. Today it is my...

JOHN KING, CNN CORRESPONDENT (voice-over): Another old Republican hand for the new president's national security team.

BUSH: This is a man who has got great judgment, he has got strong vision, and he's going to be a great secretary of defense again.

KING: Yes, Donald Rumsfeld has run the Pentagon before, but in very different times. He was secretary of defense in the Ford administration 25 years ago, in the aftermath of the Vietnam War, when the Cold War still overshadowed every element of U.S. national security planning.

Today's military challenges are very different. Mr. Bush has promised to insist on a $1 billion military pay raise, to modernize military equipment, and to push ahead with a costly, controversial missile defense system.

BUSH: Our nation is positioned well to use technologies to redefine the military. And so, one of Secretary Rumsfeld's first tasks will be to challenge the status quo inside the Pentagon, to develop a strategy necessary to have a force equipped for the warfare of the 21st century.

KING: The 68-year-old Rumsfeld is a former Congressman from Illinois, and has been a top adviser to the last four Republican presidents: counselor to Richard Nixon; White House chief of staff and then defense secretary under Gerald Ford; Middle East envoy for Ronald Reagan; a deficit hawk on an economic commission named by George Bush.

Like President-elect Bush, Rumsfeld is a vocal advocate of a national missile shield, an idea fiercely opposed by Russia and many U.S. allies. Mr. Bush was impressed by his leadership of a commission that, two years ago, concluded U.S. intelligence officials were too complacent about threats abroad.

DONALD RUMSFELD, DEFENSE SECRETARY NOMINEE: Terrorism is a threat. Cruise missiles are threats. Information warfare is a threat.

KING: The vice president-elect is a Rumsfeld protege. Dick Cheney was promoted to chief of staff in the Ford White House when Rumsfeld left for the Pentagon. Now, they are key players in a seasoned national security team that also includes retired General Colin Powell as secretary of state.

Rumsfeld initially was in line to be the next CIA director, but then drafted for a second tour as defense secretary when Mr. Bush soured on giving the job to former Indiana Senator Dan Coats.

(END VIDEOTAPE)

KING: Now former Senator Coats among those leading a bipartisan course of praise for the Rumsfeld nomination this afternoon. No doubt he'll be easily confirmed by the United States Senate, although there are likely to be tough questions from the Democrats about the Bush spending plan, specifically on missile defense. Now, this announcement today leaves Mr. Bush with eight more Cabinet choices to make. We're told to expect at least two more tomorrow -- Jeanne.

MESERVE: And he filled some other jobs today too, didn't he?

KING: He did, indeed. He filled out many of the jobs -- the public may never get to know these people very well, except for one. Ari Fleischer, who was the campaign spokesman, will be the new White House press secretary, and conduct the daily briefings.

Josh Bolton, a key policy adviser during the campaign, named deputy chief of staff of policy.

Joe Hagan (ph), another campaign aide, being brought on as a deputy chief of staff.

Other campaign people, the other announcements made today -- done on paper statements, indicating that much of the senior Bush campaign staff will now become the senior White House staff.

MESERVE: What, John, is the inside story on why Rumsfeld was ultimately the pick for defense secretary, rather than CIA chief, which...

KING: Well, there was a bit of a disagreement between General Powell and Vice President Cheney, a polite disagreement, they insist. But, Mr. Powell thought you wanted somebody to be an ambassador to Congress and to the men and women in uniform. He wanted Pennsylvania Governor Tom Ridge, a Vietnam veteran.

Secretary Cheney initially recommended Senator Dan Coats -- former senator Dan Coats. Bob Dole supported Mr. Coats. Others in the "establishment," including Senator Lott supported Mr. Coats.

Bush didn't feel quite comfortable with him. Aides close to Bush saying, don't make too much of this -- it's not that he disliked him, he just didn't feel very comfortable with him. But again, we see, today, this is an administration where connections matter, where they want to go to familiar people. Mr. Rumsfeld -- when Mr. Cheney's first choice did not get picked, he quickly went to the man who brought him into the White House back in the Ford days.

MESERVE: John King, thank you.

And now, we're joined by GOP strategist Scott Reed and former Clinton senior adviser Rahm Emanuel.

Scott, let me start with you. Don Rumsfeld: right man, right job?

SCOTT REED, GOP STRATEGIST: Oh, great man. This was a great day for Republicans across the country. They're very excited about the fact that Rumsfeld will now round out the team. I mean, look: Bush has put forward the varsity team. These are all top-notch players, and with Cheney and Powell and Condi Rice; rounded out with Don Rumsfeld, you have stability, you send a signal to our allies around the world that this is serious people -- these are serious folks, this will be serious business, and it's a very good day.

MESERVE: Rahm, let me ask you: if this is, indeed, the varsity team, as Scott just suggested, does it make Bush look like part of the junior varsity?

RAHM EMANUEL, FORMER CLINTON SENIOR ADVISER: Oh, no. I think that, look: I mean, he has a very good team here. Don Rumsfeld is a very capable person. I think, what I'm more struck by, in this, so far, is that, you know, the congressional wing of the Republican Party was barred at Philadelphia, and they now have been barred from the Bush Cabinet. That's what's really struck me to date.

Now, he has eight more appointments, but you don't see a person like a Lloyd Bentsen here or a Leon Panetta, and to date, so far, these appointments, I think what's really struck me so far is the congressional wing of the Republican Party, which was barred in Philadelphia, is now barred from the Cabinet. And that tells you something about what they think of the bench that exists for the Republican Party. All these people are capable, but...

MESERVE: Scott, I've got to ask you to respond to that.

REED: Well, first of all, I believe Senator Ashcroft was from the congressional wing of the party. But look, the way Bush and Cheney are putting this administration together, it's put together around issues, and the agenda that they ran on, and the five points that they're going to run on. They're going to run the new administration on it, as opposed to putting together a Cabinet that may look like America, and may be focused around personalities and celebrities, they're picking men and women that know how to drive an agenda, that know how to work with Congress, as John King mentioned earlier. He will be confirmed.

The members on Congress appreciate and respect Don Rumsfeld for the job he's done, most recently in his 1998 study for the speaker of the house. And so, I don't want to get into the Congressional wing, as much as: these are men and women that can lead the agenda, and that's what Bush and Cheney are trying to do, and that's how they'll be successful, as they come out of gate here in January.

MESERVE: Rahm, you just heard Scott mentioning that many of the people picked appear to have an ability to work for Congress. Is it evident that George W. Bush has been keeping a close eye on that part of their job?

EMANUEL: Yes, it is. And Don Rumsfeld is a very capable person. There's no doubt about it, and we'll be well served him having him at defense. And having good relationships with Congress can be very, very important -- especially given, that you are working with razor thin margins in both chambers.

MESERVE: You know, Scott, today, Bush got a question at his press availability about whether he was having trouble attracting Democrats to his administration, something he said he wanted to do. He commented on the fact he made overtures to John Breaux, but then he sidestepped the core of the question. What's the truth of it? Are Democrats responding or are they just not interested?

REED: Well, I think, by the time this is said and done, there will be a Democrat or two appointed to the Cabinet. I mean, with these razor thin margins, it is important in Congress to be able to reach out across party lines. It's, again, part of what Bush ran on, to change the culture of Washington, to end the partisanship and the sniping and all the investigations. And I think he will succeed in finding one or two Democrats to serve in his Cabinet.

MESERVE: Who will they be?

REED: Well, I think former Senator Johnston from Louisiana would be a fine candidate to be secretary of energy. He knows energy, he knows the issue well, he's from a good part of the country, a good friend of Senator Breaux's, also. But, the Bush team is being looking wide and far. Look at secretary of education as maybe another position where there are many Democrats that agree with Bush's campaign agenda of reforming education, and having accountability and maybe, having charter schools, and so, there are some Democrats: minority, that would be capable of filling that position too.

MESERVE: Rahm, there's clearly going to be a dust up over Senator Ashcroft's nomination, but do you anticipate anybody will have any problems getting confirmed -- at least of those names so far, obviously?

EMANUEL: No, not of the names so far. And to the earlier question, Jeanne, on the Democrat, my guess is the front-runner leaves Lee Hamilton as the likely Democrat for the Cabinet, in a sense, either for the U.N., or for CIA. But I do think, an overture of being a Democrat, I surely reject one idea would be, a Democrat for the Supreme Court when there's an opening there -- would be a true test of what bipartisanship means.

MESERVE: Scott, quick reaction to the Lee Hamilton idea?

REED: Well, Hamilton will be a great addition. And talk about a senior serious foreign policy, defense policy team. That would be great. But, I think they are other Democrats out there that can help Bush more on his five-point agenda that he ran on, mostly education reform, that I think would be bigger assets.

MESERVE: Scott, President Clinton very busy these days, dealing with the Middle East, talking today about the budget. Is it appropriate for him to be taking so much time on the stage right now?

REED: I think it is. Everybody always knew President Clinton was going to be president right up through January 20th. We've seen his work ethic for a number of years here, how he works hard throughout the day, and day in and day out. And I think it's rather fitting for him to try to finish -- to go out and get some unfinished business done.

I think Republicans are glad that he's still working hard. MESERVE: Rahm Emanuel; last word?

EMANUEL: If I were the Republicans, I'd want him to be working on the Mideast right up to the last hour. It'd be one of the issues he'd take care of; so it's not sitting on your desk in the in box.

MESERVE: Rahm Emanuel, Scott Reed, thank you both for joining us.

REED: Thank you.

MESERVE: And as the Bush national security team takes shape, some fresh reminders today of the global challenges ahead, particularly, as we mentioned, in the Middle East.

CNN White House correspondent Major Garrett has an update on the peace process and the outgoing president's role in it.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT (voice-over): A fresh wave of violence and a canceled Egyptian summit pushed the peace-seeking president to the brink.

CLINTON: The time has come to close here, and the last several months have shown us this is not going to get any easier and prolonging it is only going to make it worse.

GARRETT: The Israelis have accepted the president's blueprint for peace despite Thursday's lethal bombings.

EHUD BARAK, ISRAELI PRIME MINISTER (through translator): The attack that was carried out this afternoon in Tel Aviv was another criminal attempt by extremists who feel that we are on the verge of achieving an agreement that will bring an end to the conflict, and they are trying to cause us to stop, cause us to despair. We must not lose our determination.

GARRETT: But the Palestinians said they still needed more details.

SAEB ERAKAT, PALESTINIAN CHIEF NEGOTIATOR: Any vagueness will not benefit either side.

GARRETT: After months and months of talks, the president bristled at the notion that either side is in the dark.

CLINTON: They understand exactly what I mean. Both sides know exactly what I mean and they know exactly what they still have to do and that's enough right now.

GARRETT: But the Middle East wasn't the president's only preoccupation. He finally decided against a trip to communist North Korea, concluding a framework agreement on nuclear missiles wasn't ready to sign. CLINTON: We made a lot of progress with them, and I believe that the next administration will be able to consummate this agreement. I expect visits back and forth. I think a lot of things will happen, and I think it will make the world a much safer place.

(END VIDEOTAPE)

GARRETT: With North Korea off his agenda, the only remaining major international policy item is the Middle East, but as he made clear, if the Palestinians don't soon accept his blueprint for peace, he'll strike that from his list as well -- Jeanne.

MESERVE: Major, many people blamed other Arab leaders for the failure of the last peace effort. Is President Clinton working them hard?

GARRETT: Absolutely, the president yesterday telephone Saudi Arabia's King Fahd and Jordan's King Abdullah. He's also been in close consultation with the Egyptian president Hosni Mubarak and that's one key difference in this situation than was present during Camp David talks in July.

At that time, not only were the outlines of the peace deal kept in secret, but Mr. Arafat, the Palestinian leader, was unable to consult regularly with Arab leader. That process is ongoing now, and privately White House advisers say that's one of the secret strengths of this, that everyone can see the outlines for the deal. The Arab nations are being consulted. That should provide some momentum that wasn't present at Camp David in July -- Jeanne.

MESERVE: Major Garrett at the White House. Thank you. And President Clinton released new figures on the budget surplus today. Coming up, we'll tell you about those new numbers and how they may effect the political debate over the president-elect's tax cut plan.

(COMMERCIAL BREAK)

MESERVE: A proud moment for President Clinton today. With just over three weeks left in his administration, he got to announce another increase in the estimated budget surplus.

As Bob Beard of CNN Financial News reports, the revised figures immediately become part of the debate over what to do with the money.

(BEGIN VIDEOTAPE)

BOB BEARD, CNN CORRESPONDENT (voice-over): The White House now projects the nation's 10-year budget surplus will be $4.42 trillion; $1.9 trillion not including Social Security, larger than earlier estimates. President Clinton used a chart to argue that without massive tax cuts or new spending, the national debt could be paid-off by 2009; 2010 with modest tax cuts, and new spending for Medicare and education.

But Mr. Clinton refused to publicly criticize President-Elect George W. Bush's desire for $1.3 trillion in across-the-board tax cuts.

CLINTON: It is for the incoming administration and the new Congress to decide exactly which priorities to address and in what manner. But these new projections mean that a fiscally responsible approach that includes new investments similar to the ones I described would still permit us to make America debt-free by the end of the decade.

BEARD: The U.S. hasn't been debt-free since 1835. No public reaction to the outgoing president's projections from Mr. Bush today. Analysts say a slowing economy, not to mention growing surplus numbers, could give the president-elect's tax cut plan a boost on Capitol Hill, even among Democrats.

TOM GALLAGHER, INTERNATIONAL STRATEGY AND INVESTMENT GROUP: I suspect the Democrats will start debating more the content of the tax cut rather than the size of the tax cut as the magnitude of the slowdown really gets -- really sets in.

BEARD: Congress' own surplus forecast is expected by the end of January as the great tax cut debate revs up.

Bob Beard, CNN Financial News, Washington.

(END VIDEOTAPE)

MESERVE: And what will the revised surplus figures mean for the new president and the new Congress? Let's check in with CNN's senior political analyst Bill Schneider, who's in Los Angeles.

Bill, was President Clinton trying to send a message to his successor here?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Oh, I think a couple of messages. One, all the talk about a recession is overblown. The economy is doing well. And, second of all, he's saying my legacy isn't just prosperity it's also fiscal responsibility. The implication is that Bush's tax cut would be fiscally irresponsible. It would return the country back to the bad old days of Reaganomics. Remember, the central programs of Reaganomics were a big increase in defense spending and a big tax cut, which is exactly what Bush is proposing.

MESERVE: Will a large surplus, though, make it easier for Bush to pass the tax cut?

SCHNEIDER: Well, you know, it should. But the projections that we just heard of the budget surplus over the next 10 years were about a trillion dollars less than some Republican economists were expecting, and the bush tax cut would cost about $1.3 trillion.

There's still enough money there to pay for Bush's tax cut and to protect Social Security and increase defense spending, but there's not a lot left for what Clinton would call government investment in health and education, and there's not a lot left to pay down the national debt. It would stretch debt reduction out for about another six years.

MESERVE: The tax cut was and is a high priority for Governor Bush -- President-Elect Bush, but was it a high priority for voters?

SCHNEIDER: You know, if you ask voters, as we have several times, we wanted the government to pass a big tax cut. They say yes, by two to one. What's wrong with that? But if you ask them how high a priority is it, they give higher priority to more spending on education and health care and to paying down the national debt.

Jeanne, what we're seeing here is a real shift in party positions. Democrats are claiming the mantle of fiscal responsibility. It's Clintonism versus Reaganism. The central tenet of Clintonism is that fiscal responsibility pays off, particularly in the form of lower interest rates. The central tenet of Reaganism is tax cuts create prosperity, even if you have to borrow the money because Congress won't cut spending.

MESERVE: Bill Schneider, thank you.

SCHNEIDER: Sure.

MESERVE: The new surplus figures are sure to fuel the ongoing debate over tax cuts, as Bill indicated. Joining us to discuss that further and other issues are Bob Novak of "The Chicago Sun-Times" and Evan Thomas of "Newsweek."

Thank you both for coming in. Bob, let ask you -- you say the president saying time for fiscal responsibility. How does George W. Bush argue with the success he's had?

ROBERT NOVAK, "THE CHICAGO SUN-TIMES": Well, I think what he has to do is tell the truth. There's no sophisticated person who doesn't think now the economy -- the global economy is in big trouble. There is a corporate funding deficit. Chairman Greenspan has overly tightened; we need a lot of easing by the Federal Reserve, and we need a tax cut.

It has nothing to do with the surplus -- surplus just means we're overtaxed. What it does mean is that we are heading for serious economic trouble. Does George W. Bush know that? Some of his advisers do, but what we have to hear from is an unknown quantity -- his designate for secretary of the treasury, and that's an unknown question.

MESERVE: Evan, your reaction to that analysis?

EVAN THOMAS, "NEWSWEEK": Well, Bob is a true believer; I mean, he's going to be for tax cuts no matter what.

You know, I'm on the other side of the scale. I mean, I think this is an opportunity to do something about entitlements; when you have these huge surpluses, this is the moment when you can create a package with minimal pain to voters. So this is the moment to seize and do something about that. I suspect he'll try to do a little bit of both, there's going to -- or not he; Congress and the president will end up trying to do both.

NOVAK: I would like to have Evan call some businessmen, you know a lot of big people in this world, and ask them what they think right now about this deficit, this capital crunch, which is really scary, on the lack of funds by corporations and what should we do about it.

MESERVE: Well, the president would argue -- President Clinton -- that lowering the debt will keep interest rates down and that's a better stimulus to the economy than a huge tax cut.

NOVAK: It's not only nonsense, it's ironic. Can you imagine anybody prior to about a year ago thinking that the lowering of the debt, which is the most old-fashioned Republican economics, was going to be a principal issue in a democratic platform?

MESERVE: But it is.

Where does it go on the Hill?

THOMAS: Everything -- anything coming out of the Hill is going to be a compromise; nothing is going to roll through. And so they're going to cobble together some package that has a little bit of everything to please everybody. I mean, I think it's just inevitable we're going to get a compromised package, if we get anything at all -- it all could collapse.

NOVAK: There will be a tax cut; it may be insufficient. I would say right now, and I get this from people I trust, who are not true believers, Evan, that the size of the Bush tax cut is probably -- it may even be inadequate to -- for the needs that we have right now on this debt crunch for capital investment.

THOMAS: Don't expect to see top rates lowered. I think -- if rich people think their marginal rates are going to be lowered out of this, I'd be surprised.

MESERVE: Let's switch to the other big story of the day, Don Rumsfeld. What's the story on why he got the pick? We all thought he was the choice for CIA -- Evan?

THOMAS: Again, compromise. I mean, he's the default key. When they couldn't decide on anybody else, they went back to the -- we're rebuilding a Ford administration here, and he's a comforting -- George Bush cares about his own comfort level and who's in the room, who's a soothing, affirming presence. And Rumsfeld would be that for George W. Bush.

NOVAK: Well, I've known Rumsfeld since he was a young congressman from Illinois. Rumsfeld is damn near as old as I am, boy he is really old. And that is the first time, Evan, I've ever heard anybody call Rummy soothing, because he is a guy who, in the meeting, he picks and probes. He is one tough customer, one able customer; and he skipped the whole Reagan and first Bush administration. He's been out of public life for 23 years, getting ready. I think it is a surprising, but I think it's a very good pick; and I think I'd rather see him than some businessman come in who you'd have to show the way to the restrooms in the Pentagon.

THOMAS: He's soothing because he's an old pro. He's been there before, he's seen all this before. He's got a lot of experience and, I think, obviously -- look at who he's putting together for a Cabinet. Bush really wants people who've been there before.

NOVAK: Two questions...

MESERVE: How does he interact, given the fact -- what you know of his personality and how he acts in meetings -- how does he get along with a Cheney and a Powell? Is there a little competition there, and is it a healthy competition?

NOVAK: Well, he was Cheney's mentor. I first met Dick Cheney in 1968 at the Office of Economic Opportunity, when he was -- when Cheney was chief of staff to Rumsfeld, just a young kid.

But the interesting thing is going to be Rumsfeld and General Colin Powell. I guarantee you Don Rumsfeld is not awed by anybody. Some of the other people they mentioned, I think, in the presence of the great general -- they might be a little humbled. Rumsfeld won't be; and that's good, because I think one Cabinet post for Powell in this administration is enough. I think you ought to have a separate secretary of defense.

MESERVE: Conservatives have John Ashcroft, profess themselves to be happy. Are they going to be happy, though, if, when these appointments are completed, he's the only one in the Cabinet; or do you think that it's a sure bet there will be others?

THOMAS: Well, he's the only bone they've thrown them so far and i think he's probably enough in a pure sense. But Rumsfeld is right on a lot of issues -- on missile defense. I mean, he was one of the guys who got the whole missile defense movement going with his own report. So I don't think he's going to be objectionable; and there may be one or two others as the Cabinet process goes on.

NOVAK: I think realistic conservatives knew that the Republican Party's a big party; it isn't all conservatives, there are going to be a lot of -- there's only three Cabinet posts that are important. One of them is justice; that's the most important post. If there hadn't been a conservative there, you could hear the screams right now. The other two are HHS, Health and Human Services, and Labor.

See what comes out of those; I'll bet you there are conservatives picked for those positions, though.

MESERVE: Bob Novak, Evan Thomas, thank you for joining us.

And there's much more ahead on INSIDE POLITICS. Up next: the census bowl. We'll have the just-released stats on how Florida and other states fared in the population count of 2000. Also ahead:

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): He has just over three weeks left as president. His feet are not up on the desk while he reminisces; he's busy.

(END VIDEO CLIP)

MESERVE: Bruce Morton on a certain lame duck staying busy as a bee.

And later:

(BEGIN VIDEO CLIP)

GENE RANDALL, CNN CORRESPONDENT (voice-over): When we learned that hanging chad did not refer to a frontier sheriff and that Florida had two judges named Lewis and Clark.

(END VIDEO CLIP)

MESERVE: Gene Randall on the highs, lows and lessons of the past election year.

(COMMERCIAL BREAK)

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

Nineteen deaths now are being attributed to the winter storm that has paralyzed parts of the Southern plains. In northern Texas, a stretch of Interstate 20 froze overnight, leaving thousands of motorists stranded. The Texas National Guard was sent to the scene and traffic was moving by this afternoon.

In Arkansas, more than a quarter million homes are reported without power; and officials say it could be next week before everyone has it back. Weather forecasters are predicting a massive snowstorm could hit the Northeast beginning late tomorrow.

For more on that, we turn to Karen Maginnis in Atlanta.

(WEATHER BREAK)

MESERVE: Karen, thanks.

Montgomery Ward is closing shop after more than 125 years in business. The department store chain is filing for bankruptcy. Some 250 stores will close; 37,000 people will be out of work. The chain apparently fell victim to intense competition among retailers.

California's two largest utilities are near bankruptcy. Recent power shortages threatened blackouts twice this month, and people are screaming over soaring costs, and proposed rate increases due to be voted on next week. The utilities warn without the increases, bankruptcy and blackouts would be the order of the day.

Convicted Oklahoma bomber Timothy McVeigh gets his wish. A federal court put an end to his appeals. The judge set a January 11th deadline. After that, the U.S. Bureau of Prisons will get the OK to set an execution date. McVeigh's attorney says he's considering asking President Clinton for clemency.

When INSIDE POLITICS returns: A census watchdog helps us put the new population figures in their political context. Stay with us.

(COMMERCIAL BREAK)

MESERVE: A familiar scene in the Florida capital today, but without the fanfare. This time, some 640,000 ballots were being returned via rental truck to Miami. They were the last of the disputed punch cards delivered to Tallahassee during the presidential election standoff. A local sheriff's deputy had this to say of the ballots, quote: "We are really glad to be rid of them."

And now, we look ahead to the next election. As promised, the U.S. Census bureau today released new population figures that determine, among other things, how many House seats each state gets.

CNN's Gene Randall has been checking out the numbers, and what they tell us about the nation and our political future.

(BEGIN VIDEOTAPE)

GENE RANDALL, CNN CORRESPONDENT (voice-over): It is the story of how many we are and where we live. How many? The Census Bureau puts the figure at more than 281 million, up 13.2 percent from 248 million 10 years ago.

Where do we live? The continuing trend is away from the Midwest and Northeast to the West and the Sun Belt. And so President-Elect George W. Bush's home state of Texas, with an increase of almost 23 percent, replaces New York as the second most populous state, topped only by California.

That'll be reflected in reapportionment. Beginning in 2003, Texas will have two additional seats in the House of Representatives for 10 years. So will Arizona, Georgia and Florida. California, Nevada, Colorado, and North Carolina will gain one seat apiece. Losing House seats, New York and Pennsylvania, two each; Connecticut, Ohio, Indiana, Illinois, Michigan, Wisconsin, Oklahoma, and Mississippi lose one apiece.

Experts saw a few surprises.

KIMBALL BRACE, ELECTION DATA SERVICES: Florida gaining a second seat, we had not anticipated that. North Carolina gaining an additional seat, that was a clear surprise.

RANDALL: With reapportionment will come Congressional redistricting, a job for state legislatures where the party in power draws the lines. There figures to be a lot of partisan combat ahead, but it will matter?

CHARLES COOK, CNN POLITICAL ANALYST: The fact is that the country is very evenly divided. You'd be hard pressed to come up with a map that did not result in a fairly evenly-divided Congress.

RANDALL: Then there is the political argument over statistical sampling, which the Census Bureau says can correct possible miscounts. Republicans charge such data would be weighted toward Democratic constituencies, the poor and minorities, and the ultimate decision on sampling will rest with the incoming GOP administration.

KENNETH PREWITT, CENSUS BUREAU DIRECTOR: If who we are as a country is skewed having less-then-accurate -- less accurate data, I would think that scientifically you would hope that this administration, the new administration would commit itself to the best numbers that are available.

RANDALL (on camera): The nation's highest growth rate over the past 10 years; Nevada, 66.3 percent. Call it a sign of the times. Another was the country's only population loss, 5.7, percent, here in Washington, D.C.

Gene Randall, CNN, Capitol Hill.

(END VIDEO CLIP)

MESERVE: And we're joined now by Ken Blackwell, co-chairman of a bipartisan commission set up to monitor how the census was conducted. He also is secretary of state of Ohio which, as we heard, will lose a Congressional seat based on the new census data. Bad news for Ohio, and for Republicans.

KEN BLACKWELL, U.S. CENSUS MONITORING BOARD: Jeanne, not bad news. In Ohio, our population growth was up 4.7 percent, which means that Ohio is still an attractive state. Our growth rate was not quite as high as that growth rate of the nation, but the Ohio delegation is well-positioned in the Congress, and so I think our voice will have ample amplification in the decision-making process.

MESERVE: How accurate was this 2000 Census?

BLACKWELL: I think it was a very comprehensive and accurate Census, but as the director of the bureau, Dr. Kenneth Prewitt, said today, we're going to have to wait until after the accuracy and coverage evaluation is done to see if our celebration of the accuracy of the initial numbers is warranted.

But I anticipate that what we will find is that the $168 million that was spent in a mass advertising campaign, the fact that many states and political local jurisdictions put dollars on top of the $7 plus billion that the fed put against the Census, resulted in the most extensive grassroot effort of the history of the Census, and has given us one that has reduced the undercount substantially and almost eliminated the differential undercount of minorities and children.

MESERVE: Do you know that yet? The four million people, there is an undercount of four million people in 1990.

BLACKWELL: That was is 1990.

MESERVE: Do you know yet how they did this?

BLACKWELL: No, we don't. We have to wait. There are indicators that the population has grown, the effort has been so substantial that the undercount has not been eliminated, but substantially reduced. But what's more important, it is that the differential undercount of minorities and children, meaning that they are more likely to be and disproportionately undercounted, has probably been eliminated in this Census. So what has happened, through the success of the bureau and the American public, is that we probably have created a Census that will give us good numbers in the original count that will allow us to apportion a redistricting.

Because the two objectives of the Census, one is to count the number of people, but actually to count them where they live so that we can draw the lines for representation purposes.

MESERVE: Are you a supporter or a detractor of statistical sampling?

BLACKWELL: I'm pretty indifferent. I think the jury is still out. The courts have said clearly, the Supreme Court in 1999 said you can't use it for apportionment purposes, I tend to believe that apportionment is redistricting. There are those who say redistricting is something different than apportionment, and that is probably going to be battled out at pay grades higher than mine.

MESERVE: And it will battled.

BLACKWELL: I am sure it will be. It will be the D-Day of politics in this country.

MESERVE: Ken Blackwell, thank you very much.

BLACKWELL: Thank you.

MESERVE: Mideast peace negotiations, new budget projections, a new judicial appointment. President Clinton may be a lame duck, but he's flapping his wings a lot during the final days of his administration.

Bruce Morton will take a look behind the last-minute flurry of activity, when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

MESERVE: We didn't hear much from President Clinton during the election campaign, or during the long fight over the Florida vote count. But now, in the final weeks of his administration, he's back.

Our Bruce Morton looks at the sudden flurry of last-minute activity.

(BEGIN VIDEOTAPE)

CLINTON: We expect to pay down the debt by an unprecedented $237 billion.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): President Clinton is busy these days. This was a budget briefing, how much his administration had cut the national debt. Earlier, a ceremony signing a law setting up a kind of international school lunch program. He's busy.

He has just over three weeks left as president. His feet are not up on the desk while he reminisces. He's busy. White House reporters have been told, expect these final days to be busy.

Peace in the Middle East -- doesn't look too good just now. More terrorism, but the president is working, talking. Maybe there's still time.

This may be partly concern with a legacy, but almost certainly Mr. Clinton is busy for a much, much simpler reason: he loves the job. Would have run for a third term in an instant had the Constitution allowed it. He just loves the job. Listen.

CLINTON: I have loved these eight years. You know, I read in the history books how other presidents say the White House is like a penitentiary, and every motive they have is suspect. Even George Washington complained he was treated like a common thief. And they all say they can't wait to get away. I don't know what the heck they're talking about.

MORTON: A young Bill Clinton famously met President John Kennedy at Boys Nation, and friends say he has wanted to be president ever since, if not even earlier. He wanted it very much. He worked very hard to get it. He swore in the teeth of impeachment and trial to keep it. Does he like it? You bet.

CLINTON: I just feel enormous gratitude, but there's still a lot of things I'd like to do, and so I'll work right up to the end.

MORTON: He has been, for eight years, the most powerful man on the planet -- the center, in a sense, of the world. The hard part for this president won't be the job; it'll be losing the job and figuring out what to do with yourself when it's over.

CLINTON: I expect to make a living, and I'll get out of your hair and get out of the media spotlight and go back to making a living. I'll write a book and do a few other things.

MORTON: Sure, Mr. President, but it may not be easy.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

MESERVE: Who would have guessed it, back when we were worried about the Y2K computer glitch? 2000 turned out to be the year the computers worked, but the punch-cards caused problems. We'll take a look back, when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

MESERVE: The year 2000 started out as a relatively ordinary election year, although that's not the way it ended. As we approach the end of the year that may live forever in political science textbooks, CNN national correspondent Gene Randall takes a look back.

(BEGIN VIDEOTAPE)

GENE RANDALL, CNN CORRESPONDENT (voice-over): It ended with a gracious loser.

(BEGIN VIDEO CLIP)

AL GORE, VICE PRESIDENT OF THE UNITED STATES: I say to President-elect Bush, that what remains of partisan rancor must now be put aside. And may God bless his stewardship of this country.

(END VIDEO CLIP)

RANDALL: And a gracious winner.

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT GEORGE W. BUSH: I understand how difficult this moment must be for Vice President Gore and his family.

RANDALL: On the surface at least, a tranquil finish to more than a month of post-election turmoil, when even a rental truck got its 15 minutes of fame. When we learned that hanging chad did not refer to a frontier sheriff, that dimpled was not always a terms of endearment, and that Florida had two judges named Lewis and Clark.

In the middle of it all, Bush running mate Dick Cheney suffered a minor heart attack, had an angioplasty, and after a two-day hospital stay said he was feeling fine.

By almost any measure, it was the end of a presidential campaign that challenged one's descriptive abilities, and yet the rest of it had pretty much followed the script.

From the time he was elected to a second term as Texas governor in 1998, George W. Bush was the big money Republican to catch for his party's nomination. No one did. Maverick Senator John McCain of Arizona tried the hardest.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Unfortunately, Governor Bush is a Pat Robertson Republican who will lose to Al Gore.

(END VIDEO CLIP)

RANDALL: In February, McCain won New Hampshire and Michigan, but the next month, he was finished, and Bush glided to the nomination. (BEGIN VIDEO CLIP)

BUSH: Give me the opportunity to lead this nation and I will lead.

(END VIDEO CLIP)

RANDALL: On the Democratic side, Bill Clinton's would-be successor, his vice president, Al Gore, was toughened by challenger Bill Bradley, who finished a close second in New Hampshire, but then dropped off the radar screen. Still, he scored some hits.

(BEGIN VIDEO CLIP)

BILL BRADLEY (D), PRESIDENTIAL CANDIDATE: Quite frankly, I wonder whether, if you're running a campaign that is saying untrue things, whether you'll be able to be a president that gets people's trust.

(END VIDEO CLIP)

RANDALL: At his convention, Gore scored with a kiss and a pledge:

(BEGIN VIDEO CLIP)

GORE: We're electing a new president, and I stand here tonight as my own man. And I want you to know me for who I truly am.

(END VIDEO CLIP)

RANDALL: Green Party candidate Ralph Nader was not impressed. Would that matter? Oh, would it. And Gore running mate Joe Lieberman of Connecticut said he'd run for reelection to the Senate, left unsaid, "just in case."

Gore hoped to put Bush away with the debates. He didn't. And going into November 7th, most polls showed Bush ahead, but not by much.

It finally came down to Florida. Enter the TV networks, CNN included, for a night of election coverage that might have been titled, "oh, whoops."

(BEGIN VIDEO CLIP)

JUDY WOODRUFF, CNN ANCHOR: CNN announces that we call Florida in the Al Gore column.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PETER JENNINGS, ABC NEWS ANCHOR: We now believe it is too close to call.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, NBC NEWS ANCHOR: 2:17 a.m. and 17 seconds, NBC News projection...

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DAN RATHER, CBS NEWS ANCHOR: CBS News has now, for the second time tonight, pulled back Florida.

(END VIDEO CLIP)

RANDALL: Gore concedes in a phone call to Bush, then takes it back. And so the opening round of the post-election prize fight, when down did not necessarily mean out. And only on December 12th, when copies of the crucial U.S. Supreme Court decision were carried like relay race batons to the network TV locations, would the final bell sound.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: It's an all-out victory for the Bush team no matter what.

(END VIDEO CLIP)

RANDALL: And so, the much-maligned Florida secretary of state, Katherine Harris, would have her certified 537-vote win for George W. Bush stand, and with that, Bush reached out.

(BEGIN VIDEO CLIP)

BUSH: Whether you voted for me or not, I will do my best to serve your interests and I will work to earn your respect.

(END VIDEO CLIP)

RANDALL: And Al Gore said goodbye.

(BEGIN VIDEO CLIP)

GORE: And now, my friends, in a phrase I once addressed to others, it's time for me to go.

(END VIDEO CLIP)

RANDALL: Meanwhile, first lady Hillary Rodham Clinton, Democratic senator-elect from New York, began looking for a house in Georgetown. She will be part of a Senate that came out of November 7th, 50-50.

And a week before Christmas, George W. Bush came calling at his future home, hosted by the future senator's husband. Gene Randall, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And that's all for this edition of INSIDE POLITICS. But, of course, you can go on-line all the time at CNN's allpolitics.com; AOL key word: cnn.

These programming notes: Congressmen Barney Frank and Bob Barr will be discussing the Bush Cabinet nominations tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

Join us tomorrow on INSIDE POLITICS for Bill Schneider's "Political Plays of the Year."

I'm Jeanne Meserve.

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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