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Inside Politics

Bush Nominates Three More to Cabinet, Including a Democrat; Arafat Meets With Clinton to Discuss Mideast Peace

Aired January 2, 2001 - 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)

NORMAN MINETA, TRANSPORTATION SECRETARY NOMINEE: I am a Democrat with both a small "d" and a large one.

(END VIDEO CLIP)

JUDY WOODRUFF, CNN ANCHOR: George W. Bush finds a Democrat for his Cabinet in the Clinton administration. With a trio of new nominees, his A-team is complete.

BERNARD SHAW, CNN ANCHOR: At the White House, Palestinian leader Yasser Arafat talks Middle East peace with President Clinton. We'll have an update. Plus:

CHRIS BLACK, CNN CORRESPONDENT: Democratic and Republican leaders are trying to head off a bitter partisan conflict between the parties over who will be in charge in the Senate.

WOODRUFF: Chris Black on the divided Congress that convenes tomorrow.

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

SHAW: Thank you very much for joining us. Whatever you may think of George W. Bush's Cabinet choices, the president-elect did make good on two transition goals this day. He finished naming all his nominees in this first week of January, and he included a Democrat in the mix.

CNN's Major Garrett has more on Bush's announcement and his vow to bipartisanship.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice over): The president- elect filled out his Cabinet faster than several predecessors. Common threads are real-world skill, vast political experience, ethnic and gender diversity, and fierce dedication to the Bush agenda.

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: I hope the American people realize that a good executive is one that understands how to recruit people and how to delegate, how to line authority and responsibility, how to hold people accountable for results.

GARRETT: What's more, the Bush team landed a Democrat and a heavyweight at that: Norman Mineta, currently President Clinton's commerce secretary, as the new transportation secretary.

MINETA: There are no Democratic or Republican highways, no such thing as Republican or Democratic traffic congestion.

GARRETT: At energy, Michigan Senator Spence Abraham, who narrowly lost re-election in November. A Washington insider, Abraham's job will be to persuade skeptical Democrats to boost domestic oil and gas production, a top Bush priority.

SPENCER ABRAHAM, ENERGY SECRETARY NOMINEE: We have vast resources within the United States, and these are crucial to our country's security. We can make good use of them, while at the same time, I believe, meeting our responsibilities as good stewards for the land, the air, and the water.

GARRETT: And Linda Chavez at the labor department. The daughter of a house painter and waitress, Chavez led the U.S. Commission on Civil Rights under President Reagan.

LINDA CHAVEZ, LABOR SECRETARY NOMINEE: I intend to keep faith with the men and women who still work at jobs like those my parents held. I hope also to seek out new opportunities to increase the skills and the productivity of all Americans, to promote safe working conditions, and to administer the nation's labor laws.

(END VIDEOTAPE)

GARRETT: Now the Cabinet appointees begin the process of wooing the Senate. Two of them: Paul O'Neill at Treasury and Don Evans at Commerce will do that, rather than attend the president-elect's two- day economic conference which begins here tomorrow -- Bernie.

SHAW: Major, is Mr. Bush confident of Ashcroft's confirmation?

GARRETT: Yes, he is. What he said today -- and he responded to several questions about the brewing controversy over some of Mr. Ashcroft's record in the Senate dealing with civil rights -- the president-elect said two things, essentially: one, as an attorney general and governor of Missouri, he had to prove his heart and his record on civil rights in a swing state. That was a political note the president-elect sounded there. Also he said he believes that his senate colleagues, once reviewing the entire record, will not only confirm him, but confirm him handily -- Bernie.

SHAW: Major Garrett in Austin -- Judy.

WOODRUFF: Well, let's talk more now about Bush's choices with David Broder of the "Washington Post." Hello, David.

DAVID BRODER, "WASHINGTON POST": Hi, Judy.

WOODRUFF: And happy New Year. BRODER: And to you. I apologize from the gravely voice that my germ-carrying grandchildren left with me.

WOODRUFF: Well, we are happy to have you even with the gravely voice. David, you've seen a number of Cabinets of presidents over many years. How does this one that George W. Bush has put together stack up?

BRODER: There is a lot of experience in this group. These are not, for the most part, newcomers to their areas of responsibility, and it is -- intellectually, it is a high-powered group of men and women. There are plenty of really smart folks around here backing up the president-elect's claim that he is somebody who is not in the least bit intimidated by having a lot of talent and strong wills around him.

WOODRUFF: David, who are the standouts?

BRODER: I think -- we'll see how well they perform as managers, but everybody, I think, from Paul O'Neill, the new treasury secretary, who had extremely broad intellectual range -- everything from health care, on, as a corporate executive to Spence Abraham, who is one of the brightest people that served in the Senate in the recent years.

WOODRUFF: How does this compare, specifically, to the current Cabinet, the Clinton Cabinet?

BRODER: I think it's clearly a far more conservative Cabinet, it's a more corporate Cabinet, but I think -- for the conservative movement in this country, they have at least three personal heroes now in that Cabinet in John Ashcroft and Linda Chavez, and of course, Dick Cheney himself. And Ms. Norton, the new secretary of interior, I think probably has that same kind of reputation among the folks who have been very opposed to the environmental policies of the last eight years.

WOODRUFF: What -- who is going to be happy with this Cabinet, David? You suggest conservatives will with those three choices. Are they going to be unhappy with any other choices or do those choices and others provide a counterweight...

BRODER: I don't see much of a conservative rebellion against this. I think the people, who are the groups that are the least happy with this Cabinet are the women's groups -- not only are they worried about Senator Ashcroft at the Justice Department but Linda Chavez has been an outspoken critic of affirmative action programs. They will come down hard on her. And of course, the environmentalists are very unhappy about the Norton choice for interior.

WOODRUFF: And Tommy Thompson?

BRODER: Thompson will get a good deal of protection from his fellow governors, Democrats as well as Republicans, but the women's group, again, will be unhappy that a man who is an outspoken supporter of the pro-life position is going to be running the Department of Health and Human Services. WOODRUFF: Are the women's groups -- these other groups you mentioned -- are they overly worried here, David, or do they have a reason to be concerned?

BRODER: I think that was one of the things that this election was about. The Ashcroft nomination is clearly going to be probably the most bitterly fought, and with every passing day, as your own reports have been saying on CNN, the critics of Senator Ashcroft are mining his voluminous record in Missouri and in the Senate for more and more ammunition for those hearings. Those hearings are going to be quite something.

WOODRUFF: David, you mentioned that we learn a great deal about a president by the Cabinet, of course, that he puts together. What have we learned, if anything, about George W. Bush from his choices?

BRODER: Well, I think we've learned pretty much what he said, which is that this is a man who, as a politician, may have some shortcomings but as an executive is extremely confident about the way in which he works, and the clearest sign of that confidence is his willingness to go out with a big assist from Dick Cheney. We have to say on all of these Cabinet choices, to go out and recruit people of talent from across the political spectrum.

WOODRUFF: And what about his agenda? What can we tell about that from these choices?

BRODER: Well, the agenda is exactly what it was during the campaign. So far he's not abandoned one bit of that. And every one of the people who have spoken as designees of his have said, they come to this job with an understanding of what his agenda is. There aren't too many personal agendas, I think, visible in this Cabinet.

WOODRUFF: Will all of them be confirmed?

BRODER: I think the odds are heavily in that favor, but there will be real fights over Norton and Ashcroft.

WOODRUFF: All right, David Broder at the "Washington Post" and take care of that voice, that cold, and I know you're going to take care of the grandchildren.

BRODER: Thanks, Judy.

WOODRUFF: All right -- Bernie.

SHAW: And be sure to gargle. Now, to the outgoing president's Middle East peace efforts. CNN's David Ensor joins us from the White House with an update on Mr. Clinton's talks with Palestinian authority President Yasser Arafat, which ended a short while ago -- David.

DAVID ENSOR, CNN CORRESPONDENT: Well, Bernie, we use this phrase perhaps too often in journalism, but this is definitely a critical day for the Middle East peace process. Yasser Arafat just concluded a meeting with President Clinton a short time ago. He left without commenting, grim-faced, got back into his car, and left. We understand, however, from White House officials that he is expected back here later this evening for more talks. So it's not over yet, and his goal is to get some very detailed answers -- specific answers, as to what exactly is behind the U.S. framework -- the U.S. set of proposals for a U.S. -- for a Palestinian-Israeli peace agreement. He wants a lot more i's dotted and t's crossed.

By contrast, Mr. Clinton wants simply one thing: he wants the answer yes from Mr. Arafat. Yes, I am willing to keep trying to get a peace agreement done, under the framework have you set out, by January 20th. Officials here, as in the Middle East are quick to say, they are not at all sure it can be done, but they stress that Mr. Clinton has said repeatedly he's willing to put his last days of his presidency into this and try to make it if he can. One last try -- Bernie.

SHAW: David, the last time Mr. Arafat was here, President Clinton was not too pleased with him. Any word on the tone between these two gentlemen to date?

ENSOR: Only that the body language from Mr. Arafat was fairly cool, shall we say, coming out of the meeting this evening. I know these talks have to be very, very difficult. He's being asked to make sacrifices such as renouncing the right of Palestinians who left their homes in 1948 ever to return to them. That's a pretty big sacrifice, a pretty big political move for him to make. Not at all clear he wants to do it or is willing to do it even if he's given a Palestinian state with its capital in east Jerusalem -- Bernie.

SHAW: Thank you, David Ensor -- Judy.

WOODRUFF: Well, while Mr. Clinton keeps promoting peace, his soon-to-be successor is not second-guessing his efforts, at least publicly.

CNN's John King looks at the Middle East conflict from the president-elect's perspective.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): One president at a time is George W. Bush's consistent motto. Good luck his wish when it comes to the Middle East peace process.

BUSH: I'm appreciative of the fact that the president is working endlessly to try to bring the parties together to achieve a lasting peace. I appreciate his efforts.

KING: But this will soon be his job, the Middle East one of the most difficult and pressing issues on the international agenda. Mr. Clinton has worked tirelessly for eight years, with some success, but no shortage of frustration and failure. If this last-ditch effort fails, look for a different, more distant, approach in a Bush administration at least at the outset.

LEE HAMILTON, FORMER U.S. REPRESENTATIVE: The one area that President Bush and his advisers have been critical of President Clinton is that they have felt that President Clinton has become too deeply involved in the details of the process, and they think it would be better if the American president stepped back and was not engaged in those details.

KING: But if Mr. Clinton somehow succeeds, Mr. Bush and his team may have no choice but to get involved from day one.

JON ALTERMAN, U.S. INSTITUTE FOR PEACE: Because if there is a deal, it's going to require a lot of hard work to work out from a framework to a real agreement and then implementing that real agreement.

KING: In any event, the new team will take over, led by Secretary of State-designee Colin Powell. But Powell has yet to name his key deputies or say much about his views on the key obstacles to a peace deal.

COLIN POWELL, SECRETARY OF STATE NOMINEE: It is elusive, but it is out there somewhere. And hopefully, if it doesn't happen in the very near future and it becomes something for us to manage, you can be sure that we'll be fully engaged in trying to find a solution to that problem.

KING: Special Middle East envoy Dennis Ross dates back to the previous Bush administration, but Ross has told associates he is heading for the private sector soon. Ross deputy Aaron Miller is trusted by both the Israelis and the Palestinians and he could stay on as part of the new Bush team.

(END VIDEOTAPE)

KING: And once in office, the Bush team promises a top-to-bottom review of the Clinton Middle East strategy, and some Bush advisers suggest that if there's not a breakthrough soon in the Israeli- Palestinian negotiations, there likely will be a shift in emphasis. More effort placed on effort to strike a peace deal between the Israelis and the Syrians -- Judy.

WOODRUFF: John, why is that? Why wouldn't they just pick up exactly where the Clinton administration left off?

KING: Well, first and foremost, you have the continuing political turmoil in Israel, the upcoming elections and top Bush advisers put it this way: They don't necessarily agree with all the things President Clinton has tried to negotiate in a peace agreement. But they say this is a man who has been hands on for eight years. he has worked tirelessly at this.

If he cannot get a deal out of these two parties, the Bush view is that the Israelis and Palestinians are simply not ready to make peace, and so the United States should step back, leave them to negotiate and perhaps try to at least bring some relief of the tensions in the region by striking a deal with the Syrians and taking other steps including a reassessment, we're told, of the relationship between the United States and Egypt as well. WOODRUFF: All right, CNN's John King, thanks very much.

Still ahead on INSIDE POLITICS, on the eve of the 107th Congress, Chris Black looks ahead to the issues facing a divided Senate.

Plus, we'll talk to Representatives Nita Lowey and Tom Davis about their respective party roles.

(COMMERCIAL BREAK)

SHAW: Ever since George W. Bush was finally declared the winner of the race for the White House, there has been a lot of talk about the need for both parties to work together. Don't count on that happening. The most closely divided Congress in half a century goes to work tomorrow.

And CNN congressional correspondent Chris Black reports.

(BEGIN VIDEOTAPE)

BLACK (voice-over): Democratic and Republican leaders are trying to head off a bitter partisan conflict between the parties over who will be in charge in the Senate. Talk of partisanship, down the drain.

Republican senators are resisting Democratic demands to split committee resources and votes 50-50 and give the Democratic leader the right to bring legislation to the Senate floor. Hostility is building on Capitol Hill over power-sharing, approval of the most conservative appointees of President-Elect George W. Bush and the timing of campaign finance reform.

SEN. JOHN MCCAIN (R), ARIZONA: If we don't do it early, our chances of success diminish as time goes by.

BLACK: Republican senators met for more than two hours behind closed doors to discuss ways to accommodate the Democrats without giving in to Democratic demands.

SEN. ORRIN HATCH (R), UTAH: Look, somebody has to be in charge, and whoever has 51 votes ought to be in charge.

SEN. RICHARD DURBIN (D), ILLINOIS: They want to control the Senate as if the election of last November 7th did not occur; that they're still in the majority. They own the House, the Senate and the presidency, and they don't need the Democrats.

BLACK: When the new Senate, including Hillary Rodham Clinton, the first first lady elected to public office, takes the oath on Wednesday, Democrats will be in the majority, thanks to the tie- breaking vote of Vice President Al Gore.

UNIDENTIFIED MALE: Even though they managed to hold on by the narrowest of margins, what Republicans know is the worst of all possible worlds maybe to have title of majority and the responsibilities the of majority without having the power, the leverage, control of the agenda that goes along with it.

BLACK: Democratic sources say Democratic leader Tom Daschle will make his own proposal to divide power in the Senate, potentially provoking a GOP filibuster. Daschle will be the majority leader for 17 days until Mr. Bush takes office and Dick Cheney becomes the new vice president.

Senator Daschle says he will not attempt to push through any legislation while Democrats control the majority, though he has promised John McCain Democratic support on campaign finance reform.

(END VIDEOTAPE)

BLACK: At stake is the agenda of the next president. The fate of George Bush's legislative agenda could well depend on how and whether senators work out their differences over power-sharing -- Bernie.

SHAW: Chris, on campaign finance reform, Senator McCain says early is better than later. When will he press ahead?

BLACK: Well, the first indications, Bernie, were that he could do it as soon as this week or next week. But today he indicated that he will hold off a little bit.

It's important to remember this is a bipartisan effort, and while Tom Daschle has promised him Democratic votes on procedural issues, he's also asking him to hold off so that they can combine campaign finance reform with electoral reform to address some of those issues raised by the Florida recount.

SHAW: Looking ahead to tomorrow, Hillary Clinton will be sworn in as will some others? The gallery will be packed.

BLACK: The gallery will be packed, and we'll have a pretty famous person up there. President Bill Clinton himself will be sitting up there along with a lot of other proud spouses and watch his wife take the oath of office, and then a few minutes later, the senators traditionally line up for a re-enactment photo, individual pictures of themselves with the vice president, taking the oath of office. And Bill Clinton will hold the Bible for his wife.

SHAW: Should be quite a day. Chris Black on the Hill, thank you -- Judy.

WOODRUFF: Well, joining us now to talk more about the sharply divided Congress, Democratic Congresswoman Nita Lowey of New York and Republican Congressman Tom Davis of Virginia. They will head the campaign committees of their respective parties in the House.

Let's begin with Congresswoman Lowey. As we know, congresswoman, in the House, you don't have the even split that you do in the Senate. But will House Democrats cooperate with a new president, or will they keep thinking about what a close election it was?

REP. NITA LOWEY (D), NEW YORK: I think it's important that we really talk about what is bipartisanship. That doesn't mean that you sacrifice your values and your concerns in the name of bipartisanship. So I expect that the Democrats will have their agenda, the Republicans will have their agenda, and I hope then we can sit down and work out compromises, because that's what we were sent to do: on education, health care, prescription drugs, and a whole range of issue.

And frankly, it will depend upon the leadership of the president- elect and how he chooses to work with the Republican caucus, Tom DeLay in particular. I hope we can get something done.

WOODRUFF: Well, are there particular parts of the Bush agenda that you know of that you and other House Democrats are going to have a problem with?

LOWEY: Well, education, for example. If we're talking about modernizing our schools, after-school program, consolidating some of the programs, working together, I do believe we can get something done. If we talk about vouchers, then no way. It's a nonstarter.

On tax relief, for example, there are about 100 of us, including myself, that do believe we can have estate tax relief, marital tax penalty, getting rid of that, working on a tax package that would support the kind of tax relief that Democrats and Republicans can agree to together. But if we're going to start on this $1.3 trillion tax package, I don't know that there's room for compromise.

On prescription drugs, I know that Tom Davis and I could work together on a package to help the great majority of seniors and people who need our help. It will upon depend whether we're going to sit at a table and be ready to compromise.

WOODRUFF: Do you expect campaign finance reform to pass in a significant form? In other words, in a way that is going to change the way campaigns are financed right now?

LOWEY: I sure do hope so, Judy. The great majority of both houses support real campaign finance reform. The amount of money that is being spent on elections is obscene, and I do hope we can build support and pass real campaign finance reform.

WOODRUFF: You have said, Congresswoman Lowey, that the political climate favors the Democrats in 2002. Why?

LOWEY: Well, I think the public will have a president, Republican; Senate, Republican; House, Republican. And I think they're much more comfortable with a centrist, moderate House run by the Democrats. And if you look at statistics, in an off-year, with the president in -- of the Republican Party, we'll see that the odds do favor Democrats. And so many races, Judy, were so very close that I think we have an excellent chance to win back the House.

WOODRUFF: The man who holds your position right now -- and you're going to be, I guess, formally elected tomorrow -- the man who holds that job now, Senator Patrick Kennedy, raised something like $97 million in the elections of last year, three times as much as in the previous cycle. Are you going to try to top that? LOWEY: Well, we're going to have a team in the House. We're going to, No. 1, recruit outstanding candidates. We're going to sharpen and clarify our message, and yes, we will raise the amount of money needed to elect Democrats to the House and gain the majority. And it will be a team effort, headed by Dick Gephardt. Patrick will continue to work, Martin Frost, a whole group of Democrats that are committed to this goal.

WOODRUFF: Congresswoman, the Democrats in the Senate also named a woman to your counterpart role, Senator Patty Murray of the state of Washington. Is there a message in this: the first time a woman has been named to either one of these positions, chairing the campaign committees in the Senate and the House?

LOWEY: Women have come a long way and women are in positions of power throughout our caucus, and I know in the Republican caucus as well. We have to energize the women's vote. Women have learned how to write checks, they're actively participating in the political process. A great majority of the really outstanding candidates were women, and they've raised money. And I'm honored and privileged to assume this position, and we intend to work as a real great team.

WOODRUFF: So the view that women have a harder time raising money, not true anymore?

LOWEY: I don't think it is. I am delighted to raise money from both women and men, and women get it. They're an important part of the process. And we intend to raise the money from men and women who care passionately about the issues that I know we believe in as Democrats.

WOODRUFF: All right, Representative Nita Lowey, thanks very much and congratulations on your new position.

LOWEY: Thank you.

WOODRUFF: And now, as promised, Congressman Tom Davis, who heads the national Republican -- Republican Congressional Committee. Thank you for being with us.

You just heard, I think, what Representative Lowey said about yes, there will be compromise, but they're not going to -- the Democrats don't plan to swallow the Bush agenda hook, line and sinker. How do you respond?

REP. TOM DAVIS (R), VIRGINIA: Well, I wouldn't expect them to, and politics is the art of compromise.

You have to remember that over the last two years, the House passed a patients' bill of rights. We passed a prescription drug plan. We passed campaign finance reform. We passed a marriage tax penalty relief bill. We passed estate tax relief. The problem has never been the House. It's been the Senate, and the Senate is even more complicated now that it's 50/50, with the vice president breaking the tie. The real complication is it takes 60 votes to pass anything of substance in the Senate because of the filibuster rules. But I think we'll go along in the House just fine. We won't have President Clinton to veto some of the bills we passed the last time.

And we will get a number of Democrats supporting some of these initiatives and we will compromise on some others to get them through.

I think it's going to be an exciting time to be working together, and I congratulate Nita Lowey on her new position. I don't wish her too much luck, but she's a very able legislator and I look forward to working with her.

WOODRUFF: Well, specifically, when she says if the president- elect, the president, when he is president, Bush, talks about education, if it's modernizing school, that's fine, but if it's vouchers, no. Where is that going to come down?

DAVIS: Well, there's never been that strong support in the House, even in previous Republican majorities, to put vouchers on a nationwide basis. We voted for them for the District of Columbia.

I don't know what the Bush agenda will be, but he had a bipartisan team down in Austin just over the last couple of weeks to try to work out some of the steps we need to take to reform education in America.

This is really one of the last reforms that really needs to be made as we move into an information age.

WOODRUFF: Do you think he'll drop vouchers?

DAVIS: I don't know what he is going to put forward. And I don't know. He may put the whole package forward and only get some of it back, at this point. Look, we are going to agree on some things and we're going to disagree on some things. And we'll just have to see, you know, how the package is put together, at this point.

WOODRUFF: And when it comes to taxes, we heard Congresswoman Lowey saying: Yes, it's one thing to talk about tax -- marital-tax relief, estate-tax relief, but not the whole $1.3 trillion plan that president-elect Bush says he is still committed to.

DAVIS: Well, the Democratic leadership opposed our marriage-tax penalty relief, but we got a number of Democrats supported it anyway last time. The leadership opposed our estate-tax relief. But we passed it anyway. And I suspect we will again. I think we can have some pension-reform issues. We can have some tax reforms that will help people pay for their student's college tuition.

There are a number of things I think we can agree on. And, in a total package, I don't expect everybody -- including all Republicans -- to agree with every part of the plan. But I think substantial tax relief is going to be one of the mantras -- early mantras of the Bush administration. And we expect to have a number of Democrats supporting that as we move forward. WOODRUFF: Do you favor the whole $1.3 trillion?

DAVIS: I have to look at how the whole package comes down, at this point. I would certainly favor the -- and have voted consistently for the marriage-tax-penalty relief, for the estate-tax

(CROSSTALK)

WOODRUFF: But it sounds like you're saying a package the size of what Governor Bush is talking about is more than Congress will handle?

DAVIS: Well, I don't -- I just think we have got to look at the package. We have to look at how it's phased in. We do have a process in Congress that can get around Democratic filibusters in the Senate and that, of course, goes to the reconciliation process. So, you can't stop this and we'll have to look at the package, look at economy, look at the numbers and come to grips with as large a tax relief, I think, as we can get through.

WOODRUFF: This last election is not even a month old, so, let's talk about the next one. We heard Congresswoman Lowey say she that thinks the Democrats have the advantage in 2002 because the public is going to look at a Republican White House, Republican Congress and say hey, we need a Democratic-controlled House.

DAVIS: Well, I think that depends on what the Republican White House and the Republican Congress accomplish. It's really in our court. Should we deliver on our promises, should the economy recover from the little bump that we are inheriting at this point from the present administration, I think we'll get rewarded.

The good news for Republicans is with a Republican president now, we can communicate with groups that agree with us on a substantial majority of the issues but have been voting against us, and I think you can see the president putting together his Cabinet. It's going to reflect the different faces of America. We now need to communicate our message of empowerment to these groups. I'm very optimistic about...

WOODRUFF: What groups are you talking about?

DAVIS: Well, I'm talking about different ethnic groups from Arab-Americans, Muslims, Latinos, Asian-Americans, African-American, a number who agree with us on any given number of policy issues, but have been voting consistently against us in large chunks. I think once they see the Republican platform and that we can deliver for substantial -- substantially for members of these groups, I think we have a great opportunity to make inroads into these votes.

WOODRUFF: And just quickly, Representative Davis, do you expect to see campaign finance reform in a significant form come out of Congress?

DAVIS: Well, it came out of the House last time it. I think it needs some work in my judgment before you have a signable bill, and the president-elect has not really tipped hat as to what is acceptable and what isn't. For example, if you can't raise the limits on what individuals can contribute to political campaigns, this current campaign finance bill basically puts it back in the court of the interest groups who can spend unlimited amounts of money on behalf of their special interests and their candidates and deprives candidates from being able to raise money on their own behalf.

WOODRUFF: All right, Representative Tom Davis, chair of the National Republican Congressional Campaign Committee. Thanks very much.

DAVIS: Thank you.

WOODRUFF: And there is still much more ahead on INSIDE POLITICS.

SHAW: Still to come, as the president-elect prepares to focus on the economy, we're going to take a look at the stock market, the trends, and Bush's potential impact. Plus...

WOODRUFF: The future of the Mid-East peace process, as the current president meets with the Palestinian leader. We'll talk with former Secretary of State Lawrence Eagleburger. And later...

SHAW: Ari Fleischer gets a little practice for his upcoming role in the Bush White House.

(COMMERCIAL BREAK)

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

A Pentagon panel is recommending tighter security for American military airplanes, ships, and troops on the move. The panel was appointed after the bombing of the U.S. warship Cole, which killed 17 sailors off Yemen last year. The panel found that much has been done in the past few years to improve security at installations overseas, but improvements are needed to protect mobile targets.

WOODRUFF: In southern China, a hopeful sign for peace appeared upon the horizon, and a short while later, a ship from Taiwan arrived in a Chinese port. It was the first time in more than 50 years that a Taiwanese vessel sailed legally to mainland China. Yesterday, Taiwan's long-standing ban on travel to China was officially amended to allow for travel by sea. It is seen as a sign of trust between the long-time foes.

SHAW: In the United States, hundreds of law enforcement officials continued today to search for a gang of heavily-armed convicts who escaped from a Texas prison. It's one of the biggest manhunts in memory. Officials say they're getting hundreds of leads, mostly from northern Texas. The gang includes two convicted killers, two armed robbers, and a serial rapist, who escaped three weeks ago and allegedly murdered an Irving policeman.

WOODRUFF: Five firefighters are hospitalized after a wall collapses at a plastic recycling plant in Bowling Green, Ohio last night. The men had to be dug out from under bricks and other debris after an explosion. The cause of the fire remains under investigation.

SHAW: He was everyone's favorite Martian -- a '60s television role that typecast Ray Walston, and one he often regretted accepting. For many fans he remained Uncle Martin despite a Tony-winning performance as the Devil in "Damn Yankees," and an Emmy-winning role as Judge Henry Bone on the television series "Picket Fences." Walston's agent says the actor died yesterday of natural causes at his Beverly Hills home. He was 86 years old.

WOODRUFF: It is going to be another cold night in Arkansas where they're still cleaning up after weeks of snow and ice storms. Two boys died in a house fire over the weekend after firefighters could not get through the icy roads. More than 36,000 homes remain without power. Two power workers were electrocuted over the weekend while trying to fix the lines.

(WEATHER BREAK)

WOODRUFF: Well, there is much more ahead on INSIDE POLITICS. When we return, President-Elect Bush on the economy and a live report from wall street. Also the latest on President Clinton's bid for Middle East peace.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: Now I am concerned, as I have said, that there are some warning signs on the horizon. This isn't an administration that certainly hopes the economy remains strong. It will make our job a heck a lot easier. But ours is going to be an administration that anticipates any potential problem.

(END VIDEO CLIP)

WOODRUFF: President-elect George W. Bush talking pessimistically today about the current state of the U.S. economy. It's a subject that he says he plans to focus during an economic forum to begin in Austin tomorrow. Bush plans to meet with business leaders to hear their perspectives on the economic situation.

And joining us now with some perspective on the stock market, CNN financial correspondent Jan Hopkins.

Jan, it's been a rather rough day on Wall Street. Why -- do we know why the market is continuing to fall early in the year?

JAN HOPKINS, CNN FINANCIAL CORRESPONDENT: Let's go through the numbers, Judy. First, the Dow was down 140 points. That's a loss of 1 1/3 percent: 10,646 was the closing number. The Nasdaq losing 178 points, closed at 2,291. The Nasdaq down 7 1/4 percent. That's on top of a 39 percent decline last year.

Now, let's talk about this a little bit, because everyone here expected the market to go up. It's the beginning of the year. It usually does. New 401(k) money comes into the market. But instead investors were selling, and in large part because of a report that manufacturing is slowing down. So now investors are concerned about recession and what that might mean to company profits -- Judy.

WOODRUFF: So, Jan, is there is an expectation that the new presidency will make any difference in all of this in the markets?

HOPKINS: Well, you know it's interesting, because the concern of Wall Street analysts is that the talk of the Bush administration about a possible recession could actually bring one. We could move from a slowdown to an actual recession. But, of course, the Bush administration would like to push through tax cuts. And if we have a slowing economy or a recession, it makes Congress more receptive to the idea. Tax cuts would help in the long time -- in the long run. But they take a while to be enacted -- Judy.

WOODRUFF: So do the analysts say anything could turn the market around?

HOPKINS: Well, the key, according to analysts, is interest rates. It really always is. And the interesting thing that is going on is, as investors sell stocks, they're actually buying bonds. That's pushing interest rates down in the market. The combination of those lower interest rates in the market and the expectation that the Federal Reserve will lower rates starting the end of this month, that should help the economy. And it should help the market -- Judy.

WOODRUFF: And, Jan, just one last question on the tax cut: Is the market anticipating that a tax cut will come? Or what are they thinking on that?

HOPKINS: I guess, at this point, you would have to say there is no expectation of the tax cuts, because the market keeps falling. The focus now is really the economy. And investors are really selling on every piece of news, good or bad.

WOODRUFF: All right, Jan Hopkins at the U.S. stock exchange. Thanks very much -- Bernie.

SHAW: And coming up next on INSIDE POLITICS: the race to bring peace to the Middle East before President Clinton leaves office.

(COMMERCIAL BREAK)

SHAW: With just 18 days left in office, President Clinton is racing against time to bring peace to the Middle East. Mr. Clinton held talks with Palestinian leader Yasser Arafat at the White House today. Arafat made no comment at the end of the two-hour meeting, but he was expected to ask for clarification of Mr. Clinton's framework proposal for a peace agreement between the Palestinians and the Israelis.

However, Israeli Prime Minister Ehud Barak said today in Jerusalem he doubts any deal can be brokered before Mr. Clinton leaves office. The meeting came against a backdrop of violence in the region. Israeli forces tightened checkpoints today in Gaza and the West Bank. Earlier, Israeli soldiers killed a Palestinian farmer, and two Israeli motorists were wounded in an attack by Palestinian gunmen.

Joining us now for his take on the latest bid for peace in the Middle East, former Secretary of State Lawrence Eagleburger.

Mr. Secretary...

LAWRENCE EAGLEBURGER, FORMER SECRETARY OF STATE: Hi, Bernie.

SHAW: Hi there. Happy New Year.

EAGLEBURGER: Thank you. Same to you.

SHAW: I'm compelled to ask you, with both sides closer than they've ever been in these negotiations, why, in your judgment, no deal?

EAGLEBURGER: Well, I'm not at all sure they're as close as they look. But no deal, I think, for a series of reasons, one of which is I'm inclined to believe that the deal, as it now stands, could not be sold to the Israeli Knesset, for one thing. I think it's really gone further than most Israelis are prepared to accept.

Secondly, I think Mr. Arafat is reaching for the moon and figures that this short timeframe that's left with everybody, he maybe able to push for more than he thought he could otherwise get, including a return of all Palestinians to Israel and so forth. I think it's -- I think it is not as clear as it seems to be, and I frankly -- and it grieves me to say it -- I think it's time the president cooled it and left it for the next administration.

I didn't say that a month ago. But I think it's reached the point now he really ought to stop.

SHAW: Your phrase, "reaching for the moon," is that in reference to Arafat's desire to have some 4 million Palestinians return to Israel?

EAGLEBURGER: That's the principle point that I was making. I think he's reaching for the moon in a number of areas, but certainly on that one. Israel can't possibly accept something like that and continue to be Israel.

SHAW: Former House committee chairman Lee Hamilton was quoted earlier today on CNN as saying that he felt that Bush's people think a more distant approach from the details, from the micromanaging, would be very beneficial at this point. Does that jive with what you just said a moment ago, when you said the president should cool it?

EAGLEBURGER: Yes. Well, I've believed for some time that we Americans make a mistake when we get involved too deeply in the details. As I say, I was prepared to watch Mr. Clinton do it in hopes that he could succeed, and for a while I though maybe he could. But we're too close to the end of that term now, and he has put forward a program which is largely an American program. And under those circumstance, we end up being responsible for it.

I'm far more of the view -- and I think the Bush administration will be -- that you have to leave the details to the two sides, and you encourage them where you can, but you don't write the program for them.

SHAW: Would you look -- you said you're not so confident that a deal is imminent. When you look at the agreement on the part of the Israelis for the first time to split Jerusalem, to give sovereignty to the Palestinians over part of Jerusalem, how do you explain this historically?

EAGLEBURGER: Well, I don't explain it historically, but I explain it as Barak clearly wants a peace agreement. And...

SHAW: Right.

EAGLEBURGER: ... and there are those in Israel who want it as well. However, it is my sense of it -- and I've talked to a number of my friends in Israel lately -- my sense of it is that Barak has gone too far and that what he's now in the process of doing is losing even those who want a peace agreement because he has pushed it -- pushed the envelope too far and is conceding things he should not, under their belief, at least, should not concede. And I must say, personally, I have been surprised at some of the things he's agreed to do.

i said to you earlier -- and I think it's still true -- if he puts that peace agreement, if he were to get it tomorrow and put it to the Knesset, I think they would reject it.

SHAW: How much do you think Israeli politics are factors here, especially with the election approaching, and the latest word we see coming out of Israel is that Ariel Sharon has a double-digit lead in the polls over Barak?

EAGLEBURGER: Well, I think -- I think the politics of it is crucial to where we are, as far as the Israelis are concerned. I think the Barak people feel that, if they get this agreement, it will salvage the election for him, and if he doesn't get it, he's going to lose. And I am inclined to believe, at this late stage, given what he has given away, if he got it, he would still lose. And what we all know is, that if Mr. Sharon comes in, he is going to reject everything that has been done in the last months anyway.

SHAW: We have got under two minutes left. I want you to take the time to respond in your considered manner to this last question: President Clinton, for the last eight years, has been laboring, metaphorically, night and day for peace in the Middle East. How do you assess his eight-year effort?

EAGLEBURGER: Oh, boy, that's a tough one, Bernie. Look, you have to...

SHAW: That's why I asked it. EAGLEBURGER: Yes, I know. You have to start by saying: He is not the first one who has failed. And I think that he has failed. I think he has worked very hard at it. I have serious questions about the way he's handled it the last few weeks. But I think his intention, for the better part of this eight years, was try to accomplish it. He, I think, has failed, as have all of the rest of us who have tried it in the past.

I have to hope that a Bush administration, taking on from wherever it is left when Mr. Clinton leaves office, and being patient about it, may be able to bring it about. But I am afraid it is not going to happen now. I think Mr. Clinton enters the list of all of those who have tried in the past and failed at it.

SHAW: I lied. I have one more question.

EAGLEBURGER: Right.

SHAW: The last time Mr. Arafat was here, I recall that the atmosphere between Arafat and President Clinton wasn't that chummy. President Clinton was very upset. Mr. Arafat was at the White House this afternoon. He returns this evening, we are told. What do you think is going on?

EAGLEBURGER: Well, let me tell you, Bernie, Mr. Arafat is a tough fellow to like -- to start with. I think he has -- as I think I've indicated -- he has, this time around, I think, really pushed far beyond what anybody reasonably could expect to give him. I think he's being very tough because he sees Mr. Clinton leaving office, Barak in trouble, and he thinks he may be able to parlay this into a settlement he would not otherwise get.

I think we are going to see him visit the White House again tonight -- or whenever. I think that he will be waved a goodbye. I do not think they can reach an agreement. In a way, I don't even hope I am wrong, because if they reach an agreement now, I am afraid it is going to a very, very frayed agreement and not one that can stand the test of time.

SHAW: I've got to go back to what you just said. It sounded like, being the diplomat you are, you are implying that you hope they don't reach an agreement.

EAGLEBURGER: I am close to that now. Well, in fact, I guess I can say it straight out. I am out of government, don't have to be responsible for what I say, Bernie, anymore. But I am inclined to think, at this stage, if they reached an agreement, it would be so flawed that it couldn't stand the test of time, that if Sharon or Netanyahu come into power in the next months, they will deny it anyway. I really think the president should just stop, say, "I have done my best." Anything that would happen now would be an unwise agreement. And we shouldn't go any further.

SHAW: Wow. I am sure you realize the weight of your words, sir.

EAGLEBURGER: No, well, I -- my -- the weight of my words is exceeded only by the weight of my body.

(LAUGHTER)

EAGLEBURGER: All right?

SHAW: All I can say is: Lawrence Eagleburger, former secretary of state, thank you very much.

EAGLEBURGER: OK.

SHAW: And now our audience sees why it's such a great pleasure to interview you any time of the day or night.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Stay with us for another half hour of INSIDE POLITICS.

SHAW: Up next, two different takes on the president-elect's final Cabinet choices. We're going to talk with journalists Mark Shields and Rich Lowry.

WOODRUFF: Also ahead, Ari Fleischer's strengths and hurdles as he prepares to take the job of White House press secretary.

(COMMERCIAL BREAK)

SHAW: Three more down and none to go. Is the Bush Cabinet everything the president-elect needs it to be?

(BEGIN VIDEO CLIP)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): Not only did the president-elect find a Democrat, he found one Al Gore would have kept in his Cabinet.

(END VIDEO CLIP)

WOODRUFF: Major Garrett profiles Transportation Secretary nominee Norm Mineta. Also ahead:

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): He is the Senate's renaissance man. Moynihan knew more about more different things than any senator I ever met.

(END VIDEO CLIP)

SHAW: Bruce Morton's reflections on this retiring senior senator from New York State.

ANNOUNCER: From Washington, this is INSIDE POLITICS with Judy Woodruff and Bernard Shaw. WOODRUFF: Welcome back to INSIDE POLITICS. The early reviews still are coming in, but George W. Bush says that he believes that he has assembled one of the strongest Cabinets ever.

Today, Bush announced his final three Cabinet nominations: defeated Michigan Senator Spence Abraham for Energy Secretary; former Reagan administration official Linda Chavez for Labor Secretary; and the headliner, a Democrat, President Clinton's Commerce Secretary, Norman Mineta, is Bush's choice for Transportation Secretary.

(BEGIN VIDEO CLIP)

BUSH: It's also important to send a signal that this is an administration that recognizes talent when we see it, regardless of political party, and this is an extraordinarily talented American.

(END VIDEO CLIP)

WOODRUFF: Even as he signed on with the Bush team, Norm Mineta made it clear today that he was proud to stand with his party during the long presidential election dispute, and he says he remains proud to be a Democrat.

CNN's Major Garrett takes a closer look at Mineta and his political career.

(BEGIN VIDEOTAPE)

BUSH: Mr. Secretary...

GARRETT (voice-over): Not only did the president-elect find a Democrat: He found one Al Gore would have kept in his Cabinet. Norman Mineta will move from Commerce to Transportation, from expanding U.S. business to spending billions each year for roads and airports, railways and waterways.

It's a topic Mineta knows well. He's a former chairman of the House Public Works Committee, which monitored the Transportation Department's work.

Mineta lost his chairmanship after the Republicans won control in 1995. He later resigned from the House, returning to California as a transportation lobbyist for Lockheed Martin.

Mineta was the first Asian-American to become a Cabinet secretary, a promotion that capped an amazing American journey. During World War II, Mineta's family was shipped to an internment camp: 40 years later, Mineta led the charge in Congress for the issuance of a formal U.S. apology and $20,000 each in compensation to internment victims.

(on camera): The Senate swiftly confirmed Mineta the first time around, and that's sure to happen again. But more importantly, the Bush team has finally added a leading Democrat to its Cabinet, one with vast transportation experience. Mineta's strong ties to the Asian-American community and California could prove to be big political assets for Bush, as well.

Major Garrett, CNN, Austin, Texas.

(END VIDEOTAPE)

SHAW: And we're joined now by syndicated columnist Mark Shields and Rich Lowry of "The National Review."

Rich, first to you, your overall assessment?

RICH LOWRY, "THE NATIONAL REVIEW": Oh, I think it's been masterful so far. I think Bush has touched all the bases he has to in terms of gender and ethnic and now even partisan diversity. At the same time, he's assembled extremely conservative team and one that's committed to his agenda.

You can argue this may be the most conservative Cabinet ever. It's certainly true that when George W. Bush sits down at his first Cabinet meeting, he'll have more conservatives around the table than Ronald Reagan did when he sat down for his first Cabinet meeting.

SHAW: Mark Shields, your assessment?

MARK SHIELDS, CNN'S "CAPITAL GANG": I think it's a strong Cabinet. I really do, I think that you have to say in support of Governor Bush -- President-Elect Bush, that he has certainly chosen people that some come with greater reputations than he does; that he has not been in any way cowed by people with their own individual constituencies; their own individual records.

And I just want to say I thought that was a terrific piece by Major Garrett on Norm Mineta because Norm Mineta is an intriguing choice for George W. Bush. He did deliver on the pledge of keeping a Democrat, picking a Democrat, and also, Rich talked about diversity or representation or whatever, it sounded an awful lot like the class picture that Bill Clinton took so much criticism for assembling in 1993.

LOWRY: Well, what Bush has avoided, though, and what Clinton did. Clinton was so obsessed with the bean counting. For instance, in the case of the attorney general job, he was so obsessed with having a woman, he went down to what was a third-tier choice, his third choice with Janet Reno, who's arguably in over her head for eight years and I think the strength of Bush's Cabinet is he's achieved that sort of diversity without, I think, having any weak picks. I don't know if there's a loser among this bunch.

SHIELDS: Well, I guess I would nominate one who could be a political loser, and that's, of course, John Ashcroft. But I'll leave that...

SHAW: Well, wait a minute. Why do you say that?

SHIELDS: Why do I say it?

SHAW: Yes. SHIELDS: I just -- I just think that he picked -- there's no question John Ashcroft pleased the social and religious conservatives, but I think he picked somebody who is more ideologically, as John Breaux from Louisiana put it, to the right of 95 percent of the members of the U.S. Senate, and a man who really hasn't shown the breadth of -- in the sense of interest and whether in fact he could deal with the laws that are on the books. I mean, I think that's got to be the question.

I do -- I do think he will be confirmed, Bernie -- and I don't mean to suggest he won't be -- because the usual suspects have lined up against him: I mean, Kate Michelman and Jesse Jackson and some of the labor folks. Unless somebody like Joe Lieberman, you know, somebody across the aisle wants to lead the offensive and say this man is an inappropriate choice, I think he will be confirmed, because the Senate confirms its own.

LOWRY: Well, Mark, no one's really seriously suggesting that John Ashcroft is an advocate of civil disobedience. I mean, if there's one thing we can say about him, he believes in enforcing the law. And the balance of the charges against Ashcroft, which I think are without merit -- sort of baldly opportunistic -- are that he's a racist.

And we're supposed to believe that the people of Missouri elected him five times to statewide office without noticing that he's a racist? We're supposed that even though he voted to confirm 26 of 28 African-Americans nominees to the federal bench, that he's a racist. The whole idea is absurd.

But I do think the Bush people realize they're a little behind on this one, and they lost some time with the holidays. And I think there's going to be an intense sort of person-to-person lobbying to lock up senators behind Ashcroft on a personal basis. And I wouldn't be surprised if there's an effort to humanize him a bit as well.

You know, he rides motorcycles and owns at least two of them. He's a fan of "The Simpsons." So I think they'll try to get away from the idea that he's just absolutely this -- this narrow choir boy that the stereotype says he is.

SHIELDS: Well, Rich, with all respect, I mean, Homer Simpson and Harley-Davidson as character references are intriguing. Don't get me wrong. But no one is suggesting he's a racist. But...

LOWRY: Oh, yes, they are, Mark. Yes, they are.

SHIELDS: I think it's hard -- I think it's hard to argue that his opposition to Ronnie White did not follow in time and causation from the Holy Father putting the pressure, John Paul II, on Mel Carnahan not to -- not to execute a convicted murderer, and Carnahan bowing to the wishes and importuning of the Holy Father, and thus making himself vulnerable on the capital punishment.

At that point, only then did -- did he pick up the case against Ronnie White. LOWRY: Well, what's wrong -- what's wrong with that...

SHAW: Let me slip in here.

LOWRY: Excuse me.

SHAW: No, I just want to slip in here. We're fast running out of time. Under the category of surprises and contradictions, our Chris Black covering the Hill sends word that former Michigan Senator Spence Abraham, the next energy secretary, actually co-sponsored a bill to eliminate the department. Your reaction to that?

LOWRY: It's a sign of what they call growth inside Washington, I think, Bernie.

(LAUGHTER)

But if I could just respond just very quickly to what Mark said, I mean, capital punishment is a legitimate political issue, and it's not something new that cop killers are extremely unpopular in America, and that judges who are perceived as being soft on cop killers are unpopular as well. This is just politics, Mark.

SHAW: OK. You've responded to that. Back to my serious question -- I asked it in jest -- but what about Chris' point?

SHIELDS: About -- about Spence Abraham? Oh, excuse me. I'm sorry.

SHAW: Yes.

SHIELDS: Spence Abraham. No, I think...

SHAW: He once co-sponsored legislation to eliminate the very department he's expected to head.

SHIELDS: And that legislation did not pass, the department continues, and George W. Bush has nominated him to serve the public. I mean, look, I like Spence Abraham. I think he's a well-regarded, well-respected man in Washington.

He is not going to make energy policy in this administration. You've got George W. Bush and Dick Cheney, both men who were long, deep and steep in that industry. I don't think Spence is going to be coming in with any really radical proposals of his own. But I think he will be confirmed.

LOWRY: I think that point stands for just about all these nominees. I mean, that's the common thread: They are all committed to the Bush agenda. And Mark spoke earlier about Bush not being cowed. This is another instance where he's not cowed. He is going to try as hard as he can to push through the ideas he ran on for a solid year during the campaign.

SHAW: OK, Rich Lowry of "The National Review," Mark Shields, syndicated columnist, also of "THE CAPITAL GANG," thanks very much. Happy New Year.

SHIELDS: Happy New Year.

SHAW: Thank you. And just here on INSIDE POLITICS, the White House press secretary-to-be steps up to the podium. We'll have a few words of advice from some White House veterans. And New York's longtime senator prepares to walk away. Our Bruce Morton reflects on the career of Daniel Patrick Moynihan.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REV. AL SHARPTON, NATIONAL ACTION NETWORK: It is our belief that Mr. Ashcroft, if he becomes attorney general, would make Ed Meese look like a progressive.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY DESIGNEE: We're very confident that Senator Ashcroft is going to be well received by the United States Senate, by a strong majority of the United States Senate. He's very well respected by his Senate colleagues on both sides of the aisle.

(END VIDEO CLIP)

WOODRUFF: Once again today, the Bush camp had to defend its nominee for attorney general against attacks from civil-rights groups. Bush spokesman Ari Fleischer will get even more practice fielding tough questions when he takes on his new role as White House press secretary.

CNN's Eileen O'Connor takes a closer look.

(BEGIN VIDEOTAPE)

FLEISCHER: Good afternoon, everybody.

EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): His first on- camera briefing, and Ari Fleischer continues to keep a tight lid on information.

FLEISCHER: If you're asking me to reveal what is in the national security briefings, I will choose not to do that, especially at my first briefing. It could be my last.

O'CONNOR: It is Fleischer's Republican credentials and his Capitol Hill experience -- especially as spokesman for the powerful House Ways and Means Committee -- that got him a ticket to Austin in the first place.

FLEISCHER: They wanted somebody who had Washington knowledge. They wanted somebody who knew the press corps in Washington, who knew the Hill, and knew the Washington rhythms.

O'CONNOR: But some expressed concern the influence of Austin insiders like Karen Hughes could trump Fleischer's hand, making the job more difficult.

JOE LOCKHART, FORMER WHITE HOUSE PRESS SECRETARY: There is always a chance that if a president keeps a small group of advisers around him, and one of those is not the press secretary, that you're going to run into trouble.

JOHN HARRIS, "WASHINGTON POST": The press secretary should have what I call barge-in privileges. He can go to any meeting he wants and barge in and get the information.

O'CONNOR: Fleischer says he will be in all the meetings.

FLEISCHER: President-elect Bush wanted to -- would not have wanted me to do the job if he was not going to empower me with what I need to do the job.

O'CONNOR: Reagan administration veterans like Mike Deaver say Fleischer and the others on Bush's team have what it takes: discipline.

MIKE DEAVER, FORMER WHITE HOUSE DEPUTY CHIEF OF STAFF: I would give the Bush team an A-plus. They have been strategic. They have been disciplined. They have stayed on-message, even when they were attacked.

O'CONNOR: With the Internet, 24-hour cable and talk radio, Fleischer admits control is more difficult now. But he still intends to try.

FLEISCHER: Our campaign was generally tight-lipped. And that is because that is how president-elect Bush likes to be. He likes to be the one to make the news.

O'CONNOR: But some say controlling information from inside the White House is a totally different dynamic.

LOCKHART: If there is anybody in the Bush team that thinks that they can come in, and that they are smarter than all the groups that have been here before them, and they're going to be able to manage this, and just put out what they want to put out, and not have to deal with anything else, it is going to be a lot of fun to watch.

O'CONNOR: For the job is harder, and the office, which Fleischer visited last week, smaller than the one glamorized by the prime-time series "The West Wing." Oh, and there's another difference.

FLEISCHER: In the Hollywood version, everyone has hair.

O'CONNOR: Eileen O'Connor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, with that commenting on the hair, one thing is for sure, we'll be watching him and the rest of them closely.

Coming up next, leaving the Senate after nearly 25 years. Bruce Morton on the retirement of New York's senior senator.

(COMMERCIAL BREAK)

SHAW: The Capitol building of the United States of America. A live picture. The Capitol building in evening dress.

And when the Senate is sworn in tomorrow, New York's senior senator will be among those who will step out of the political limelight. After four terms, Senator Daniel Patrick Moynihan will officially retire. First lady Hillary Rodham Clinton will fill his seat, but, as our Bruce Morton points out, it will be difficult to replace the longtime senator and statesman.

(BEGIN VIDEOTAPE)

MORTON (voice-over): He is the Senate's renaissance man, knowledgeable in things from secrecy and the CIA to welfare reform and poverty among children. He has worked in the administrations of four presidents. advising John Kennedy on antipoverty programs, and stressing, that long ago, the need for strong black families; advising Richard Nixon -- yes, Nixon, on welfare reform; Nixon's Ambassador to India; Gerald Ford's Ambassador to the United Nations; 24 years in the Senate; studied at Harvard and the London School of Economics, looked a little English after that, some said. And none of it easy.

Father abandoned the family, mother ran a bar, young Pat worked as a longshoreman, lived in New York's Hell's Kitchen.

SEN. ROBERT BYRD (D), WEST VIRGINIA: He once arrived for an examination at City College in New York with a dock-worker loading hook tucked into his back pocket next to his pencils.

MORTON: Moynihan knew more about more different things than any senator I ever met. In interviews, you didn't get some memorized 20- second answer he'd been handed by his staff. He said what he thought, and that's rare.

Have you seen the Hart Senate Office Building? In 1981, they finished it, took off its plastic cover, revealing, Moynihan said, a building whose "banality was exceeded only by its expense." He offered a resolution to put the cover back on.

Have you looked at Washington's Pennsylvania Avenue? It used to be all bars and pawn shops. Fixing it up was a Moynihan project. He was an independent Democrat, an early critic of Bill Clinton's doomed health plan. He also criticized Clinton's welfare reform bill as too harsh. The next recession will tell us if he was right. He endorsed Bill Bradley, not Al Gore, for president.

SEN. DANIEL PATRICK MOYNIHAN (D), NEW YORK: Nothing is the matter with Mr. Gore, except he can't be elected president.

MORTON: On the other hand, he endorsed Hillary Rodham Clinton when she began exploring a New York Senate candidacy, though he almost forgot why he was there. MOYNIHAN: My God, I almost forgot. Yesterday, Hillary Clinton established an exploratory committee with regards to her candidacy for the Senate -- United States Senate from New York, a seat which I will vacate in a year and a half. I'm here to say that I hope she will go all the way.

MORTON: She did, Gore didn't. Pretty good crystal ball. But that's not why his colleagues remember him.

BYRD: A true visionary, Senator Moynihan is the kind of philosopher-politician that the founding fathers had fervently hoped would populate the Senate.

MORTON: But there haven't been very many. And some here would say there won't be any, now that he's gone.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

SHAW: I think the man is irreplaceable.

WOODRUFF: No one like him. Absolutely no one.

SHAW: 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 keyword, CNN.

WOODRUFF: Stay with CNN throughout the evening for our new prime-time lineup, starting at 8 p.m. Eastern with WOLF BLITZER REPORTS, and wrapping up at 10:30 p.m. Eastern with THE SPIN ROOM.

I'm Judy Woodruff.

SHAW: I'm Bernard Shaw. The "MONEYLINE NEWS HOUR" is next.

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