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Inside Politics

President Bush Pushes Tax Cut Proposal; Israeli Election Likely to Produce a Change in Leadership, and the Peace Process

Aired February 5, 2001 - 5:00 p.m. ET



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is the right size plan. It is the right approach, and I'm going to defend it mightily.


BERNARD SHAW, CNN ANCHOR: President Bush steps up the fight to get taxes cut his way.

JUDY WOODRUFF, CNN ANCHOR: From Israel, our Bill Schneider sees the big election picture, just hours before voting gets underway.

SHAW: Plus, did all those controversial gifts to the Clintons actually belong to them in the first place?

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

WOODRUFF: Thank you for joining us.

President Bush today launched a public relations campaign for his tax cut plan by recycling a tactic from his race for the White House. He surrounded himself with a selected group of working families in hopes of putting a positive face on his proposal.

CNN's John King has more on Mr. Bush's message to taxpayers, including an elite group, the members of the 107th Congress.


JOHN KING, CNN CORRESPONDENT (voice-over): The president opened his tax cut push with a message to Democrats who say his plans is too big, too generous to the rich.

BUSH: My plan addresses the struggles of American families and respects their judgment. It doesn't tell families how to spend their money. It doesn't single out some Americans for relief while leaving others out. It's tax relief for everybody who pays taxes.

KING: But there also was a message to Republicans and corporate lobbyists who think the tax cut should be even bigger. BUSH: I want the members of Congress and the American people to hear loud and clear: This is the right size plan. It is the right approach, and I'm going to defend it mightily.

KING: The 10-year price tag of the Bush plan is $1.6 trillion. Democratic leaders back cutting taxes half that: $850 billion.

ROBERT MCINTYRE, CITIZENS FOR TAX JUSTICE: The Bush tax plan is way beyond what the country can afford, unless we're prepared to cut important programs or raid the Social Security trust fund.

KING: The driving force of the Bush plan is an across-the-board rate cut. There are now five federal income tax brackets: 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent. Mr. Bush proposes four lower rates: 10, 15, 25 and 33 percent.

The president also wants to eliminate so called death or estate taxes; reduce the marriage penalty on two-earner couples; and double the current child credit to $1,000 per child.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: To put this Bush tax cut in perspective, it's only about one-third as big as the Reagan tax cut 20 years ago relative to the economy. It's less than half as big as the John F. Kennedy tax cut back in the 1960s.

KING: This lunch with Federal Reserve Chairman Alan Greenspan fit with the White House line that a tax cut will help keep the economy from stalling into recession.


KING: And the president says he favors making any tax cuts retroactive to the beginning of the year. He says that will boost consumer confidence, and the president clearly believes the slowing economy strengthens his hand as he urges the Congress to help him deliver on his signature campaign promise -- Judy.

WOODRUFF: John, by his comment we heard just a moment ago, that this is the right size plan, is the president signaling Republicans that he will not go along with any effort to saddle this plan with special breaks -- special interest tax breaks.

KING: Certainly, any plan to saddle it with anything that will raise the price tag significantly. In the words of his top economic adviser, Larry Lindsey, the more ornaments you add to a Christmas tree, the heavier the Christmas tree. They believe that their approach is about right now, and they also believe what they need to do is calm down the Republican glee.

Remember, for eight years, the threat of a veto by President Clinton kept any Republican tax promises in line. The new Republican White House believes maybe $2 trillion as opposed to $1.6 trillion, but they don't want it to go any higher than that. They know if it did, they certainly would lose the support of many Democrats.

WOODRUFF: All right, John King at the White House. Thanks -- Bernie

SHAW: Now to the Hill for more on the tax cut debate and the growing emphasis on the question, "how big should it be?

Here's CNN's Jonathan Karl.


JONATHAN KARL, CNN CORRESPONDENT (voice-over): As the Bush tax cut gains momentum on Capitol Hill, Democrats are gearing up for a counteroffensive. But first things first:

SEN. KENT CONRAD (D), NORTH DAKOTA: I want to make very clear that I, as the leading Democrat on the Senate Budget Committee, along with most Democrats, support a significant tax cut for the American people this year.

KARL: Ceding the need for a tax cut, Democrats are left arguing that Bush's is simply too big. Talking like a fiscal conservatives, Democratic budget point man Kent Conrad said that the Bush plan would squander the projected $5.6 trillion budget surplus; a surplus he said may never materialize.

CONRAD: And yet people are rushing out, acting as though this $5.6 trillion is etched in stone. It's not in stone. It's etched in quicksand.

KARL: Conrad says one-third of the non-Social Security, non- Medicare surplus should go for taxes; one-third for new spending, and one-third for paying down the debt. That would leave about $900 billion for a tax cut.

Republicans say Democrats are more concerned with new spending than anything else.

SEN. PHIL GRAMM (R), TEXAS: We're going to have a budget from the White House that is going to show that we're going to but down the debt, pay it off over an 11-year period. We're going to do this tax cut, and we're going to set out a binding budget for five years with binding constraints, and I'm hoping the Democrats who are now concerned about the deficit will support us on those constraints.

KARL: Even as they argue for debt reduction, Democrats haven't given up on the central argument made against Bush's tax cut during last year's campaign, that it is skewed to the rich.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: If you make over $300,000 a year, this tax cut means you get to buy a new Lexus. If you make $50,000 a year, you get to buy a muffler on your used car. That's the difference. That's what we are talking about here.


KARL: With the sole exception of Georgia Democratic Zell Miller, who supports a Bush-sized tax cut, Democrats who have spoken out on the issue are united in saying that they think that Bush's plan is simply too big. But Republican Phil Gramm predicts that ultimately, 15 or more Democrats in the Senate will support a Bush-sized tax cut, and Phil Gramm says he is working very hard right now to get at least another Democrat or two to come out and join Zell Miller in helping the Republicans make the case for their tax cut right now -- Bernie.

SHAW: Thank you, Jonathan Karl on the Hill.

We're going to interrupt coverage of INSIDE POLITICS for a breaking news story. Earlier today, a shooting in an engine plant in Melrose Park, Illinois outside of Chicago. We join the news conference.


QUESTION: ... the security systems you have and (UNINTELLIGIBLE)

CHIEF VITO SCAVO, MELROSE PARK POLICE: Well, I really can't speak on those terms because that's Navistar's deal. We haven't got anything to do with their security system. But I do know this, being a police chief here, they do have security gates, security people employed in the exterior of the building, so on and so forth. But that's so far as that goes.

QUESTION: Was the suspect ever arrested before?

SCAVO: Yes. He was -- he was convicted, arrested in '95, convicted in '98.

QUESTION: Can you tell us about the weapons that you recovered and what you believed was used as the manner to get them?

SCAVO: The weapons that are recovered are one AK-47 assault rifle, One 0.38 revolver, one Remington 870s (ph) shotgun pump, and one 0.30 caliber hunting rifle.

QUESTION: Which one did he seem to be using?

SCAVO: It appeared to be the AK-47, but again, we're still going on with the investigation and we're not real certain if that's the only weapon that was used.


QUESTION: Did he say anything while he was shooting?

QUESTION: Full auto?

SCAVO: Yes, full auto.

QUESTION: Did he say anything verbally?

SCAVO: At this time, the investigation is still pending. We have numerous witnesses still in our station. We have no indication if there was any words exchanged with his victims whatsoever.

QUESTION: Were the Melrose Park police involved in the investigation of the engine thefts and what more can you tell us about that?

SCAVO: I have no knowledge of that whatsoever about the engine thefts. We weren't involved in that. I know for a fact that it was a Federal Bureau of Investigation. The FBI handled it, investigated it and convicted him of it.

QUESTION: Chief, do you have any information about how long he might have been planning this?

SCAVO: No, none whatsoever.


QUESTION: Earlier that day, he was seen at the (UNINTELLIGIBLE) down the road?

SCAVO: I have no knowledge of that.

QUESTION: Have you had a chance to check the suspect's home? Any other weapons found there?

SCAVO: Right now, I'm not certain if that was even done. I have no knowledge of that, whether or not that's true or false.

QUESTION: You say the security guards were armed and if so, did they return any fire?

SCAVO: Again, you'd have to ask Navistar that.

QUESTION: Do you know whether -- I mean as a part of the investigation, whether they fired any shots?

SCAVO: It's ongoing. You've got to remember, this only happened last less than eight hours ago. I have no idea whether or not Navistar has armed guards or not armed guards.


QUESTION: You said he took a security essentially hostage to get into the facility. Was that security guard shot?


QUESTION: And was the guard able to break away or...

SCAVO: Again, it's still ongoing. I haven't received any statements from my investigators of exactly what went on. But it was to my belief that he just cast her aside and walked in.

QUESTION: Was there a change in the security configuration at the plant just in the last 24 to 48 hours that you are aware of?

SCAVO: No, not that I am aware of.

QUESTION: They got a new security company.

SCAVO: I have no knowledge of that. That's a question you have to address to Navistar.

QUESTION: Were any of the guns possessed legally or was he not supposed to have them...

SHAW: OK, let me voice over the picture...

SCAVO: ... that's kind a lengthy process. As of right now, we don't have any knowledge whether or not anything was stolen or what the situation with the guns are.

SHAW: This is the Melrose Park, Illinois police chief, Vito Scavo, at this news conference under way on the shooting earlier today at the Navistar International plant, which makes diesel engines. Five people are dead; four are injured. Among them, the alleged gunman, 66-year-old William D. Baker.

According the to the U.S. attorney's office, Baker was indicted on federal conspiracy to commit theft charges in 1999. Among those killed in the shooting at the plant 15 miles west of Chicago was a man identified as a supervisor who had worked 26 years for the company -- Judy.

WOODRUFF: And we return now to talk of the tax cut. The tax cut, $1.6 trillion, proposed by President Bush.

We talk now with the chairman of the House Budget Committee, Republican Jim Nussle of Iowa and Democratic Representative Robert Matsui of California. He's a member of the House Ways and Means Committee.

Congressman Matsui, we have a slowing economy. We have surpluses as far as the eye can see, trillions of dollars in surpluses. Why not give the taxpayers the $1.6 trillion tax cut, if not more?

REP. ROBERT MATSUI (D), CALIFORNIA: Well, the tax cut actually is about $1.9 trillion, Judy, because you have to count the loss of interest on that $1.6 trillion. So we should talk about 1.9 trillion.

But actually, the problem is that if you take Social Security and also the Medicare surplus out of the equation, then you're talking about $2.7 trillion. And right now, the base-line budget that we're making these estimates under don't include population growth. They don't include some expiring tax provisions. They don't include anything to do with obviously restructuring Medicare or Social Security, prescription drug treatments. And we don't even know if these surpluses are going to occur. This is 10 years down the road. Nobody can make budget projections that far in advance.

And I think we should have a tax cut, but that should tax cut should be within the confines of the budget, what we can afford, and certainly it should actually measure the surplus and not exceed that surplus, which the president's proposal does.

WOODRUFF: Congressman Nussle, what about the point that there's no guarantee that these surpluses will materialize and that the president's plan says nothing about Medicare, about Social Security reform?

REP. JIM NUSSLE (R), IOWA: Well, first of all, the president is going to be submitting a budget in which, as part of his plan, he's going to suggest that we're going to pay down all of the national debt, we're going to set aside the entire Social Security trust fund, we're going to set aside the entire Medicare trust fund. We're going to fund some very important priority items that the American people have talked about for a number of years, including education reform, including making sure that our young men and women in uniform get the kind of support so they're not living on food stamps.

And after all of that is done, guess what? There's a lot of money left over, and that money is projected to be as much as -- as much as needed in order to make some reforms in the tax code that make sense.

We've got single mothers out in America right now that pay a higher marginal rate on $25,000 than somebody who makes $250,000. And so the tax code...

WOODRUFF: Well, let me ask -- let me ask...

NUSSLE: ... the tax code is completely unfair. And Bob Matsui, even though he may think this may be too big, agrees that there should be tax relief for American families. And that's what we should work from.

WOODRUFF: What about that, Congressman Matsui?

NUSSLE: Well, we do believe, as I said, a tax cut is required, but it should be within the confines of the budget.

I'm sure that Jim Nussle is concerned about that working mother who makes $25,000 a year, but the problem is that the top 5 percent of the wage earners in America will get 60 percent of this tax break. And as I said before, the real problem with it is that it will exceed the surplus. And this have no impact on the slowing of the economy. What we really need is to have budget discipline so that Alan Greenspan will be able to continue to drop interest rates so you get a bigger bang for the buck and obviously quicker as well

WOODRUFF: Congressman Nussle, what about the point that the top 5 percent of income earners in the country would get the lion's share of this tax cut?

NUSSLE: Well, they also pay the lion's share of taxes in America. And the lion's share, actually, when you look at this, goes to people that are, first of all, going to be taken off the rolls. Six million people, according to the Bush tax cut plan, will be completely without a taxable obligation under this plan. People under $50,000 a year will have their taxes cut in half: As much as $1,600 realized for them so that they can pay for college tuition or for the high gas prices that people are seeing across the country or to pay their electric bill in California.

These are issues that people are dealing with on a regular basis now, and we can't just assume that, well, we can't project responsibly into the future, and therefore, that means that Americans have to have the highest taxable rate in peacetime history in America. That's not fair.

WOODRUFF: Congressman Matsui, is it just a matter of seeing this differently? Do you not acknowledge that the low-income earners that Congressman Nussle's describing would benefit from this?

MATSUI: Well, I think everybody benefits somewhat from a tax cut. But bear in mind that most of the surplus will come from the payroll tax. And the payroll tax is a very regressive tax. And so I disagree with what Mr. Nussle said that the rich people are the ones who pay these taxes, and so therefore, they should get the money back.

This stack is actually one in which essentially moderate-income, middle-income people are paying into. And frankly, the debt reduction that he's taking about is basically using the Social Security and Medicare surplus to reduce the debt. But eventually, that's going to have to be taken out again, and you're going to increase the debt by taking that money out, because that surplus will eventually have to be dedicated to Social Security and Medicare.

So we're basically not at all reducing the national debt over the next 15 to 20 years once you take that money back.

WOODRUFF: Gentlemen, we're going to have to leave it there. We hope to see you again on this subject.

Congressman Matsui, Congressman Nussle, thank you both -- Bernie.

SHAW: Straight ahead on INSIDE POLITICS, the race for Israeli prime minister. The campaigning is all but complete. The rest is up to the voters. We're going to go live to Tel Aviv for a preview of tomorrow's election.


WOODRUFF: In Israel, it is election eve, and the polls show Israelis soon may have a new leader. Prime Minister Ehud Barak made his last campaign stops today in what has become an uphill battle to hold onto his job.

Barak's popularity has suffered in recent months, largely due to his handling of the Palestinian uprising and his inability to complete a peace agreement. His challenger, Likud Party leader Ariel Sharon, has kept a lower profile in the days leading up to the election. He has pledged to put Israeli security first with peace talks only after calm is restored.

SHAW: The polls will open in Israel in less than seven hours. Our senior political analyst Bill Schneider is in Tel Aviv with a preview of tomorrow's election and a closer look at Israeli voters -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Bernie, Israel is a divided country -- between Jews and Arabs, between secular and religious, between native Israelis and new immigrants. This election, however, is producing a kind of negative unity. Israelis are united by what they don't want.


SCHNEIDER (voice-over): Just 19 months ago, Israelis elected Ehud Barak by a solid majority. Now that majority seems to be disintegrating.

HIRSCH GOODMAN, TEL AVIV UNIVERSITY: He just antagonized every single part of the political spectrum, one by one, and that's what went wrong.

SCHNEIDER: Start with the left, Barak's base. That's mostly secular Israelis of European origin, the country's elite. Barak came in on a promise to curb the power of the ultra-orthodox religious authorities. When he reneged on that promise, his base felt betrayed.

Last year at Camp David, Barak made unthinkable concessions to the Palestinians, beyond the left's wildest dreams, and look what happened.

GOODMAN: There was a prime minister that broke every single taboo, Jerusalem, the Temple Mount, up-rooting settlements. As far as any left-thinking person in this country would think anybody would go, and he was kicked in the teeth by Arafat.

SCHNEIDER: First betrayal, then failure. Barak's entire campaign this time has been aimed at shoring up his base on the left. When a politician has to do that, he's in trouble. What about Israeli Arabs? They represent about 12 percent of voters. Arabs voted 95 percent for Barak in 1999. They, too, feel angry and betrayed.

GOODMAN: Barak was the prime minister when Israeli police killed 13 Israeli Arab unarmed demonstrators in the October riots.

SCHNEIDER: This time, their leaders are urging Israeli Arabs to boycott the election, cast blank ballots in protest or write the number 13 to commemorate those who were killed.

BARRY RUBIN, BAR-ILAN UNIVERSITY: The Arab voters want to punish Barak for some of his actions, irrespective of whether it brings Sharon to power.

SCHNEIDER: The Israeli right is also determined to punish Barak. On the far right, the ultra-orthodox and the Jewish settlers on the West Bank and Gaza, together, no more than 10 percent of the voters. But they were outraged by Barak's unprecedented offer of concessions on Jerusalem and the territories, and by the Palestinians' response to those concessions: four months of terrifying violence.

Israel's large population of Middle Eastern, or Sephardic Jews, tends to favor a strong leader who will take a hard line with the Palestinians, like Ariel Sharon. Sharon is not religious, and he's not Sephardic, but he's tough. RUBIN: He has overwhelming support among religious voters, well over 90 percent; and then he has a strong basis of support among Jews whose families originally immigrated from the Middle East and the Arab world.

SCHNEIDER: Then there are the recent immigrants from the former Soviet Union, now nearly 20 percent of Israeli voters. They've always voted against the incumbent government and for the winner, including Barak.

RUBIN: The key, then, is the immigrants from the former Soviet Union, which is the swing factor. These are the voters that elected him in 1999.

SCHNEIDER: But the immigrants, too, seem to be turning against Barak. They're intensely secular, and don't like weak leaders. All of this spells bad news for Barak.

GOODMAN: People aren't voting for Sharon. They're voting against Barak. They're voting against Arafat. They're voting for stability.


SCHNEIDER: The irony is, that Israeli voters have had four prime ministers in a little over five years. Yitzhak Rabin, then Shimon Peres, then Benjamin Netanyahu, then Ehud Barak. To vote for stability, Israel would have to be changing leaders now for the 5th time -- Bernie

SHAW: Bill, a question: tomorrow night, as the election results start coming in, what is the biggest thing people will be looking for?

SCHNEIDER: They will be looking at the Arab voters, because they can make the difference for a crushing defeat for Barak or a very close vote. If significant numbers of Arabs boycott the election are cast blank ballots, that would be the end for Barak.

That is why Prime Minister Barak yesterday took responsibility for the deaths of those 13 Israeli Arab demonstrators, and publicly, for the first time, apologized to the Israeli-Arab community, but those deaths occurred last October. And a lot of Arabs are saying, why did he do it two days before the election?

SHAW: And on this day, before this election, what's the hot topic of political speculation?

SCHNEIDER: All of the papers and all of the commentators are talking about the day after the election. They are assuming that Ariel Sharon is going to win. And they're asking, will he be able to form a unity government, including the Labor party -- and possibly including Ehud Barak as his defense minister.

You know, in Israel, electing a new prime minister is only the first step. The new prime minister has 45 days to form a government and has to do with the old Parliament. Because the Israelis will not be electing a new Parliament tomorrow, this is a special election. If it's a very close vote, then Labor may say, why sell out and join the government?

If Barak is crushingly defeated, then he'll probably be replaced as Labor leader, and the new Labor leader may not join the government, because he wants his party to have a fresh start. A lot of Israelis are expecting another round of elections before the end of this year, including a new Parliament and probably a new cast of characters for prime minister. Benjamin Netanyahu is waiting in the wings, and there may be a new Labor Party leader. This is stability? -- Bernie.

SHAW: Bill Schneider in Tel Aviv. We'll see you tomorrow. And this reminder, please stay with CNN for complete reports on tomorrow's Israeli election. Our special coverage begins at 3:00 p.m. Eastern with CNN's Christiane Amanpour. Judy and I will be right back with more INSIDE POLITICS.


WOODRUFF: Clinton friends and staffers are defending the former first family against accusations that they took some gifts intended to remain at the White House when they departed last month. Questions have come up about items of furniture which were donated to a 1993 White House redecoration project.

As Bob Franken reports, the controversy has the new administration once again answering questions about the previous White House residents.


BOB FRANKEN, CNN CORRESPONDENT (voice-over): Another day, another controversy about the Clintons' last days in the White House. And a new question about some of the gifts they took with them: Did they all belong to them?

"Every item accepted by the Clintons," said a statement from Senator Hillary Clinton's office, "was identified by the White House gift office as a gift to them."

At issue, $28,000 in furnishings which originally appeared in 1993 in National Park Service records as gifts that were for the permanent use of the White House. They were part of a redecoration project. The Park Service is the agency officially authorized to keep track of gifts that are specified for the white house.

Contributors told "The Washington Post" these were not personal gifts, but were intended for the White House. These contributors have not returned phone calls from CNN. But a preliminary survey now shows that the items, in fact, are now included on the personal gift lists, not the Park Service list.

White House usher Gary Walters tells CNN: "We are not aware of anything that left the executive residence that was executive residence property. Everything that belongs to the government is still here." He refused an interview, leaving television comment to the Bush press office.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I know that the former president's staff has been in touch with the curator's office here, and I know the curator's office will be helpful in trying to help the former president to ascertain what it is they need.

FRANKEN: Former President Clinton refused to answer questions as he left his New York office. He and Mrs. Clinton have already agreed to pay for more than half of the $190,000 in gifts they took with them. President Bush was also dealing with questions about his predecessor's latest controversy.

BUSH: It's important for all of the facts to be laid out on the table, and I'm confident that the former president and first lady will make the right decision.

FRANKEN (on camera): Also in the statement from Senator Clinton's office: "Of course, if the White House now determines that a cataloguing error occurred seven years ago, any item in question will be returned."

Bob Franken, CNN, Washington.


SHAW: Mr. Clinton's speech tonight is not without a little controversy of its own. The former president is scheduled to address the Morgan Stanley Dean Witter and Company conference in Boca Raton. But some clients of the investment firm are up in arms over this invitation.

Here now from Boca Raton, CNN's Susan Candiotti -- Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Bernie. As you are well aware, this is the first speech that the former president will be making since he left office. But we won't be able to see or hear it because this is closed event for employees of Morgan Stanley Dean Witter and their clients. The investment firm paying $100,000 to the former president to address its annual high-yield conference here in Boca Raton, Florida.

The company is saying this is only the latest list of high- profile speakers. For example, last year the host was former British Prime Minister Margaret Thatcher. Senator Bob Dole has also spoken here. This being more controversial, as you indicated.

Morgan Stanley won't say how many complaints it has had; however it does admit to hearing them from investors and indeed to sending out internal memos to some 500 offices nationwide as to how to answer, as they put it, questions and concerns from their clients.

Now, a spokesman for Mr. Clinton says that it was this company that pressed the former president to make this appearance and that he, in fact, worked on the speech himself, but will include some questions and answers. Jake Siewert says that the president remains in very high demand, that he is receiving hundreds of request to speak nationwide and, in fact, worldwide from as far away as Hong Kong.

He has not accepted any other speaking engagements beyond this weekend, however. And Mr. Siewert also pointing out to remind everyone that it was President Ronald Reagan who received $2 million for two speeches he made only two months after leaving office. Now, if you work on the math, President Clinton, if he indeed receives $100,000 a clip for each speech, if he made one a month he could easily make more than $1 million a year.

There are about a dozen protesters out here, including a group interest from a However, President Clinton will be spending all week here in South Florida with a speech this weekend before a Jewish group and we understand that that event is sold out. Any complaint, I asked? Organizers told me the only complaints from that is that the event is already sold out.

Bernie, back to you.

SHAW: Thank you, Susan Candiotti in Boca Raton, Florida.

And just ahead on INSIDE POLITICS, the counting in Florida begins, again as election officials around the United States push for election reform.


WOODRUFF: As President Bush begins his third week in the White House, the vote counting is underway again in several Florida counties. The effort is a news media-sponsored review, that will eventually catalog the thousands of undervotes and overvotes in all 67 Florida counties. CNN's Mark Potter reports on the ballot review from one of the counties at the center of the election 2000 dispute: Miami- Dade.


MARK POTTER, CNN CORRESPONDENT (voice-over): By now, a familiar sight: Florida ballots under scrutiny, this time by a consortium of major U.S. newspapers and CNN. The goal is to establish the historical record of what actually is found on each of the 180,000 undervote and overvote ballots not counted by machines in Florida's November presidential election. The consortium's review, in all 67 counties, is being conducted by the National Opinion Research Center.

TRACY BUIE, NATIONAL OPINION RESEARCH CENTER: I think we're going to say what's really on the ballots and without any biased interpretation of it -- just exactly what we saw, and I think the public needs that information.

POTTER: Reviewing teams will determine if each ballot has a dimpled chad, a detached chad, or nothing at all. They will not try to decide voter intent or who should have won the election.

BUIE: This organization is providing the definitive archive of what was on the ballots. That's it.

POTTER: Observers from the Republican Party are monitoring the effort. State Party Chairman Alberto Cardenas supports the review, as long as it leads to improved elections procedures.

ALBERTO CARDENAS, FLORIDA GOP CHAIRMAN: It's possible if we end up with legislation or election reform that creates a model for America.

POTTER: Still, the review is controversial. Some believe it's a waste of time.

UNIDENTIFIED FEMALE: We have a new president. The other candidate long since conceded, and I would say, move on and get over it.

THERESA LEPORE, SUPERVISOR, PALM BEACH ELECTIONS: There's a lot of things that need to be accomplished at this point, rather than dwelling on the past.

POTTER: Others, including members of the news consortium, argue it's an important public project.

JIM O'SHEA, CHICAGO TRIBUNE: By the insights we hope to develop, by reporting on that and asking questions and doing some analysis, maybe we can figure out -- really as a public service -- as to what went wrong and how we can prevent it again.

POTTER (on camera): The review will be completed in about 10 weeks, and the raw data will be handed over to the news organizations and made public. That's when the real controversy could begin, if anyone tries to use the information to argue that the results already certified are wrong. Mark Potter, CNN, Miami.


SHAW: With election 2000 still fresh on their minds and the minds of the nation's secretaries of state, they released a report today calling for changes in voting procedures. The recommendations range from upgrading voting equipment to improving voter and poll worker education. One thing not recommended: national uniform voting standards.

Joining us now to discuss the report, Kentucky Secretary of State John Brown, and California Secretary of State Bill Jones.

Why no national uniform voting standards, Mr. Jones?

BILL JONES (R), CALIFORNIA SECRETARY OF STATE: Well, one of the things we have done is supported the effort at the federal level to actually do voluntary national standards. Congress is currently working on those, both in the area of equipment and what we try to do in California, which is put together a process by how you count the votes, if in fact you do get into a manual recount. All that is currently under way, and we support that.

SHAW: Mr. Brown, why no national?

JOHN BROWN (D), KENTUCKY SECRETARY OF STATE: It was a knee-jerk reaction in my opinion and it would be an incredible waste of taxpayer dollars, because not every county in the state has the situation that Palm Beach County did. Probably half the precincts out there, you know, have equipment that is accurate as any new equipment that would replace it, so it would be a terrible waste of money, and there is no one size fits all solution.

What works in Oregon, for example -- voting by mail -- wouldn't work in many, many states where there's problem with vote fraud with absentee voting. So, I think what we are seeking to do is to ensure that we have accurate voting systems in each and every state, and that we have uniform standards for recounts and other election procedures, so that what happened in Florida never happens again.

SHAW: Is it the universal feeling among you secretaries of state that the state should handle their problems and the federal government should just stand back?

JONES: Bernie, but clearly, you know the states have the responsibility for elections -- most elections are local. And as Secretary Brown stated, we support voluntary national standards for voting machines and for the process that the human element gets involved. That's a federal role, we look forward to the federal election commission, and some of the legislation, and maybe additional resources to help acquire these expensive systems at the local level.

But these are not new issues and the fact we can get resources now focused on the states is a great benefit to us and we appreciate that.

SHAW: Let me ask you a very blunt question: among your colleagues, is there happiness that the Florida situation occurred, so that this problem, nationwide, could be magnified?

BROWN: It's been a blessing in disguise, I think, for the American voters because, as awful as that 37 day process was, ultimately, it's uncovered or shown a bright light on the darker areas of the election process, which has been an area of government which been financially starved for the last 100 years.

Counties determine, you know, what equipment to buy, and when they have the decision to buy or build a new road, or a new school or new voting equipment, voting equipment is not on their list. So, this is an opportunity for us to really over haul our system, but we want to do it in a sensible, realistic way that will work.

SHAW: Secretary Jones, you're smiling.

JONES: I think that's absolutely right. Secretaries are unanimous that they're concerned about making sure every vote counts, the process works, everybody is enfranchised, and we believe that we have been, in the process, in reaching that goal in the past, but one of the main elements, Bernie, like we just mentioned is: resources. Within my county in my state of California, they have gone all touch screen, like an ATM touch screen machine.

SHAW: Which county is that?

JONES: Riverside County. 4,000 units -- 3,000 per unit, $15 million for one county. So, as John was just saying, priorities are such, now that the focus is there, hopefully we will have additional resources and we have asked for it with our democracy fund in California on a bipartisan basis.

SHAW: OK. Because this subject is very important, we only have about 50 seconds, I want you to tick off the top three recommendations that you secretaries of state have put forth.

BROWN: First off, it's not only what we recommend to Congress, but we need to represent our own states and be leaders in our own state in remembers reform. Number one, make sure there are uniform standards for recounts that are beyond any question of a need for a judge to interpret the intent of a legislature; if that had been in place in Florida, the recount would have taken a day.

JONES: That is place in California already -- it wouldn't have been an issue.

SHAW: Number two.

JONES: Number two is to make sure we have resources for new technologies and we have training for our poll workers. Training is a big issue.

BROWN: Absolutely. And when I said blessing in disguise, these are issues that we have been discussing for years, but it wasn't until the Florida incident that we had the years of our state and federal law makers that are willing to help fund these projects.

SHAW: And number three before we leave you.

JONES: To make sure -- in California, anyway, we still have vote-o-matic punch cards systems. My point, in California, our system still works, these systems do work. They are cleaned regularly, they do work, and until we get new technologies, people need to be confident that the election works, and they all turn out and register to vote in California.

SHAW: Bill Jones, California secretary of state, joined by John Brown, Kentucky secretary of state, thanks very much -- Judy.

WOODRUFF: Another report out today examines the role of money and elections. The Center for the Study of Elections and Democracy at Brigham Young University examined the role of so-called soft money and independent spending in 17 of the most competitive races in 2000.

While the study does not lay out reform strategies, it does shed new light on who used soft money, how much was used, and who benefited most. Brooks Jackson reports.

(END VIDEOTAPE) BROOKS JACKSON, CNN CORRESPONDENT (voice-over): There was more of this stuff than ever: attack mail, full of name-calling, attack ads, sometimes bitter, designed to hurt.

Negative politics financed by record amounts of soft money and independent spending. A landmark study by a team of political scientists concludes that political parties spent $469 million in soft money last year. A key finding: in House and Senate races, Democrats spent $119 million in soft money, substantially outspending Republicans who spent $94 million.

DAVID MAGELBY, BRIGHAM YOUNG UNIVERSITY: The most important finding is the big surge in Democratic soft money receipts and their ability to efficiently target that to competitive Senate races. I think it was a factor in their picking up a 50-50 split in the Senate.

JACKSON: A dramatic example: Delaware's Republican Senator William Roth refused soft-money help from his party, was outspent by $2 million in that tiny state and lost.

PROF. JOSEPH PIKA, UNIVERSITY OF DELAWARE: I think the effect was decisive. I think that's what made the difference in the election.

JACKSON: A young girl's death was used by Michigan Democrats in this soft money ad, attacking the incumbent's voting record.

UNIDENTIFIED FEMALE, STATE PARTY CAMPAIGN AD: When I found out that Spencer Abraham didn't support a patient's bill of rights...

JACKSON: Abraham lost. He's now secretary of energy. And in Missouri, when candidate Mel Carnahan was killed, Democrats used soft money and mail to promote his legacy and attack incumbent Republican John Ashcroft. Ashcroft lost.

The study's editor says Senate Democrats benefited so much from soft money, they may now may be less likely to support new restrictions.

DAVID MAGELBY, BRIGHAM YOUNG UNIVERSITY: It's now perhaps, arguably, not in their self-interest to do what they've been voting for in past Congresses.

JACKSON: The study found that outside groups spent more heavily than ever, including the AFL-CIO, the National Rifle Association, the Sierra Club and the League of Conservation Voters. Each more than doubled their previous spending records. Drug companies backed a group called Citizens for Better Medicare that spent an estimated $60 million, mostly without disclosure.


NARRATOR: Government control of our prescription medicines? Tell Brian Schweitzer, "no thanks."

(END VIDEO CLIP) JACKSON: Montana Democrat Schweitzer lost to incumbent Republican Conrad Burns. The report said the NAACP tested this ad in focus groups, targeting black males ages 18 to 30.


NARRATOR: So when Governor George W. Bush refused to support hate-crime legislation, it was like my father was killed all over again.


JACKSON: More than 1,200 different pieces of political mail were counted in the 17 Senate and House races studied. Voters sometimes got 12 per day. Overall, parties and outside groups outspent the candidates more than two to one, and were more negative.

ANNA NIBLEY BAKER, BRIGHAM YOUNG UNIVERSITY: I think the parties do a favor for the candidates in doing their dirty work. So, the interest group ads and the party soft money ads tend to be more negative.

JACKSON: The outlook for next time? More of the same.

(on camera): One group that benefited from all this, broadcasters. By Election Day, they more than doubled the average price of a soft money ad.

Brooks Jackson, CNN, Washington.


SHAW: Up next on INSIDE POLITICS: The real life events in the movie "Thirteen Days." Behind the scenes at a White House in crisis: Judy will talk with former Defense Secretary Robert McNamara about Hollywood reality, and the threat of nuclear war.



UNIDENTIFIED ACTOR: I believe the president made it clear there would be no firing on ships without his express permission.

UNIDENTIFIED ACTOR: With all due respect, Mr. Secretary, we were not firing on that ship.

UNIDENTIFIED ACTOR: What the hell was that?

UNIDENTIFIED ACTOR: Firing on a ship means attacking a ship. We were not attacking that ship.


WOODRUFF: The scene from the new movie "Thirteen Days," a movie that dramatizes one of the most anxious moments of the Cold War: the October 1962 showdown between the United States and the Soviet Union over the installation of Soviet missiles in Cuba.

A man who was right at the center of that crisis, President John F. Kennedy's defense secretary, Robert McNamara. And he joins us here in Washington. Secretary McNamara, is the movie accurate?

ROBERT MCNAMARA, FORMER DEFENSE SECRETARY: Well, in the most basic sense yes. In some details, no. For example, Kevin Costner plays Kenny O'Donnell. Kenny O'Donnell had essentially nothing to do with the crisis. It's a dramatic device to bring in the president, Jack Kennedy, and Bobby. The producer insisted I see it with him.

When it was over, he said what do you think of it? I said if I had produced it, it would be historically accurate. Nobody would come to see it. You've taken a few liberties with history. It is a dramatic portrayal of one of the most important events in our history. We and the world came that close had to nuclear war. That's what the new movie tells you, and it's correct.

WOODRUFF: Is there a lesson, not just from the movie, but from the missile crisis itself for today?

MCNAMARA: Oh, yes. Absolutely. The major lesson is that human beings are fallible. In conventional war, we've had command positions have made mistakes. We've killed thousands or tens of thousands. We haven't destroyed nations. But the indefinite combination of human fallibility and nuclear weapons is going to destroy nations and therefore the lesson is, over time, we've got to get rid of these things. That's the lesson.

WOODRUFF: Is there any lesson in terms of the lack of experience of a president...

MCNAMARA: Well, presidents will be -- if they have lack of experience. I had lack of experience. I was an automobile president when I came into...

WOODRUFF: This was 40 years ago.

MCNAMARA: Forty years ago this month, as a matter of fact. So I knew nothing about nuke war, but you learn very quickly. You try to surround yourself with experts, which I did, and I'm sure President Bush will and he has. His secretary of defense is an expert. The vice president is an expert. The secretary of state's expert.

WOODRUFF: What do you say to people who say there is no real nuclear threat, anymore, the Cold War is over?

MCNAMARA: I say -- to be blunt about it, they're crazy as hell. Now let me just tell you why. We have on the order of 6,500 strategic warheads, strategic nuclear warheads. One-third of those, roughly 2,200, are on 15-minute alert and that is equivalent to 40,000 Hiroshima bombs -- 40,000 on 15-minute alert.

The Hiroshima bomb, one, killed 100,000 people. The Russians have essentially the same thing. Our alert is constantly checked, maintained technically and otherwise. Their military leaders say they can't afford to do that, so they've got these weapons on alert, pointed at us, that are improperly maintained and improperly controlled.

WOODRUFF: And one thing you're trying to do, Bob McNamara, is increase that alert.

MCNAMARA: Well, I'm trying to...

WOODRUFF: To lengthen the time.

MCNAMARA: I call it de-alert, lengthen the between time a decision to launch or an action to launch and the time it's launched. The best way to do that is to literally separate the warheads from the delivery vehicles. This is what the Canberra Commission recommended.

The Canberra Commission had as its members Lee Butler, the long- time commander of our strategic Nuclear Command; Field Marshal Lord Carver, the chief of the British Defense Staff; Prime Minister Michel Rocard of France, and I was a member and we without any qualification recommended de-alerting to reduce this risk, separating the warheads in a verifiable way so that we'd know when the Soviets -- Russians separated theirs.

WOODRUFF: We just have short time left.


WOODRUFF: Bob McNamara, this administration, President Bush apparently completely dead set on the idea of a missile defense system. Is that a smart idea given the situation or not?

MCNAMARA: Well, let me say I was the originator of the ballistic missile treaty which underlies strategic stability today. Now, I don't know yet what President Bush's plans are and I don't want to in any sense criticize them until I understand them.

He hasn't yet defined what kind of a missile defense system he would deploy, how he would deploy it or what negotiations he'd undertake with the Russians to preserve the basic structure of the ballistic missile defense treaty which underlies strategic stability today.

WOODRUFF: But based on when you know about it?

MCNAMARA: I don't want to go any further. I want to wait until he defines it and then I'll be happy to comment.

WOODRUFF: All right. Well, we will have you back.

MCNAMARA: Thank you.

WOODRUFF: Robert McNamara, thank you very much. We appreciate your being with us.

Stay with us. When INSIDE POLITICS continues at the top of the hour, we will have a report on how Mr. Bush's approach to Middle East peace may be influenced by the Israeli election results.

Also ahead: Analyst Ron Brownstein on the president's efforts to control the tax cut debate and cope with pressure from big business.


WOODRUFF: Cutting to the heart of the tax cut debate: How would workers of various incomes fare? Also ahead...

SHAW: Are American Jews in synch with the election themes playing out in Israel?



GOV. JESSE VENTURA (I), MINNESOTA: This isn't war, and it isn't, you know, it's entertainment and fun.


WOODRUFF: Some color on Governor Ventura's XFL commentary.

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

SHAW: And welcome back to INSIDE POLITICS. When it comes to the president's tax cut proposal, many Democrats say it's too big. Some Republicans say it's too small. But today, Mr. Bush argued that it's just right. Joined by several selected families, he tried to rally Americans behind his 10-year, $1.6 trillion plan to cut federal taxes across-the-board.


BUSH: Every American who pays income taxes will get tax relief. And the average relief for a family of four with two children will be $1,600. This is real and practical help when, at this time, many Americans need it.


SHAW: With Mr. Bush on hand, Commerce Secretary Don Evans also made a tax cut pitch after he was sworn in, once again, for the cameras.

WOODRUFF: For more on the tax cut debate, we turn back to our senior White House correspondent John King.

John, the Democrats are launching their own counter-offensive what the president is putting forward. Does this mean this is the end of bipartisanship?

KING: Well, certainly it's the beginning of the partisan fights, let's put it that way. There will be bipartisanship on some issues. But look how far the Democrats come. From the Bush White House point- of-view, that is the most significant, even as the Democrats criticize the Bush approach.

Last year, the Democrats were at $200 to $300 billion. Then they moved up to Al Gore's $500 billion. Now, they're starting at $850 billion over 10 years. If you just split the difference between the president's plan and Senator Daschle's plan, you get a $1.2 trillion tax cut. President Bush wants to do better than that. but they see this debate moving their way. And they believe the slowing economy strengthens their hand considerably right now.

And remember, we're only beginning this debate. This is going to go on for several months.

WOODRUFF: John, how is this tax cut debate under this president different from what happened during President Clinton's time?

KING: Well, it is startling to just start here on day one of this debate saying there will likely be across-the-board rate reductions. For eight years that was a nonstarter because Bill Clinton said he would veto it. Now, the Democrats say they are for it, too. So that in and of itself is a giant change in the debate.

Indeed, the biggest concern here at the Bush White House is that Republicans will bid this up and make the tax bill too big for the president's support, add too many special interest loopholes to it. So their concern now is not that they won't get $1.6 trillion, but that at least in the early days, some Republicans will push for it to be much bigger than that.

WOODRUFF: And John, quick change of subjects. The president has his first meeting tonight with an international leader as president. Tell us about that.

KING: In just a few minutes, the Canadian prime minister, Jean Chretien, will be in the Oval Office. A quick meeting there, then a working dinner between these two leaders. Significant, but still being called in the Canadian press a consolation prize. It is traditional for the U.S. president to travel to Canada first, the first trip outside of the United State. This president, President Bush, will go to Mexico first.

Next week, 10 days from now, he will travel to Mexico first. So in the Canadian press, they're calling this a consolation prize that Mr. Chretien is the first to get a face-to-face meeting. These are two men who have never met. They don't know each other, and they have some significant differences, including on environmental issues.

The Canadians, unlike the Bush administration, do not want any U.S. oil exploration up in the Arctic National Wildlife Refuge, and as you were just discussing with former Secretary McNamara, Mr. Chretien also a fierce opponent of the Bush plan for a national missile shield.

WOODRUFF: All right, John King at the White House. Thanks -- Bernie.

SHAW: More now on taxes. We're joined by Ron Brownstein of "The Los Angeles Times." Ron, question one: Is corporate America, big business, going to stand by and watch individuals get their taxes cut and not them?

RON BROWNSTEIN, "THE LOS ANGELES TIMES": Probably not, Bernie, if history is any guide. One of the things that Bush tried to do during the campaign, it got lost a little bit in the general election, was set his tax plan. He tried to make his tax plan distinct from traditional Republican approaches by having the entire tax cut focused on individuals. There really was nothing in there significant for big business.

But now you're seeing business groups lining up and saying, we deserve a piece of this, too. You go back in history, 1981, Ronald Reagan ran on the Kemp-Roth cuts in tax rates, the marginal tax rates, and the cost of his plan got bid up enormously, as John King suggested, when business tax cuts got added to it.

That's going to be a real challenge for Bush, restraining his friends as much as dealing with his adversaries in the Democratic Party.

SHAW: Next question: You just answered part of it. Why is this fellow president wary of his fellow Republicans and the House and the Senate?

BROWNSTEIN: Well, because, you know, it's going to be very hard to keep a tax bill focused solely on individuals and one thing that Bush plan did was get to a cost of $1.6 trillion before you get to any business tax cuts.

Now, you've had some of the business groups in the last few days, the Business Roundtable has been saying if there's going to be an individual rate cut, there should be a corporate rate cut. Another alliance of more capital intense businesses is saying that 40 percent of the total cost of the tax cut, whatever it is, should be allocated toward business.

These kinds of pressures, on the one hand, bidding the cost up. On the other hand, you have Democrats who want to keep the cost down. The question is can Bush find a mean that will allow him to protect the centerpiece, which are these individual rate cuts.

SHAW: Well, it seems that Bush is not trying to pull a fast one here. He has been talking about this plan for months.

BROWNSTEIN: Right, exactly. But of course, you know, once a tax bill gets going up on Capitol Hill it is why there are so many nice offices on K Street. I mean, it is the classic way that people in this town make their money, the lobbyists, and it is hard to keep some of that out.

Now, I think there will be some concern and sensitivity in the business community and among Republicans not to create a vehicle so big that it collapses of its own weight. But again, there will be a lot of pressure on the upside, even as you have Democrats, as I said, still trying to keep down the overall cost and to sharpen the debate about distribution. Who benefits? That may become as much of the issue as the overall size.

SHAW: Am I missing something? Think back to the Los Angeles convention. The Democrats, this really against tax cuts. Today, some moderates in the Democratic Party are agreeing with this Republican president. What's happened?

BROWNSTEIN: Well, a big Rubicon has been crossed, first of all. And as John, I think, mentioned more Democrats, not all, but more are moving away from the targeted tax cuts of the Clinton years toward an acceptance of the idea that if there's going to be tax relief, some of it should be the across-the-board reduction, whether a rate cut or a rebate for everybody but not just having the tax cuts meant to encourage certain kinds of behavior.

Partially, it's the economy slowing down. Partially, it's the sheer size of the surplus because it's really hard to image this government running $500, $600, $700 billion surpluses every year indefinitely without giving more of the money back.

SHAW: And very quickly, tell us what's behind the president's desire to make this tax cut retroactive?

BROWNSTEIN: Well, they obviously want to get some bounce on the economy. I think it's going to be very hard to do, but they're hoping to get some bounce. They may also try to increase the -- accelerate the rate at which it phases in, which could affect how quickly people feel it in their pockets as well.

SHAW: Ron Brownstein, "Los Angeles Times," thank you.

BROWNSTEIN: Thank you.

SHAW: Judy.

WOODRUFF: Well, as we reported, Mr. Bush tried today to make the case that his tax cut plan would provide a financial boost to working Americans.

CNN's Eileen O'Connor went out and talked with three families to get a sense of how much they might gain.


EILEEN O'CONNOR, CNN CORRESPONDENT, (voice-over): Fred Finelli is a highly-skilled laproscopic surgeon. Tori, his wife, is a part- time student and mother to four young children. According to the Congressional Joint Committee on Taxation, people like the Finellis, earning more than $200,000 a year, about 5 percent of all earners, pay 39 percent of all taxes.

DR. FREDERICK FINELLI, SURGEON: Somehow, it just doesn't seem like a fair deal to me anymore.

O'CONNOR: If Tori goes back to work, $0.50 cents of every $1 she earns would go to taxes. For that reason, Tori is considering law school to reenter the workforce as a higher earner. TORI FINELLI, HOMEMAKER: It would practically cost us money for me to go back to work.

O'CONNOR: Rather than a 6 percent rate cut, they'd like to see targeted deductions for things like college savings, private school tuition or better yet, no cut.

T. FINELLI: I'd rather them spend more money on education for everybody. Just incentives to send kids to, you know, better public schools and to help us pay for college.

F. FINELLI: Yes, if you want to take away any tax cut and spend the money on better schools, then that's fine with me.

O'CONNOR (on camera): Democrats argue paying down the debt would help keep interest rates low and would do more for the economy than a tax cut. They also argue that tax rates across-the-board benefit mainly the rich. Still, both plans do give significant relief to low and middle income families.

(voice-over): Melvin Gonzalez is a painter in the 15 percent bracket. Proposals to double the child tax credit, lower his rate to 10 percent, plus a bigger exemption on college savings accounts would help him save more money toward his priority: Higher education for his son.

MELVIN GONZALEZ, PAINTER: I want him to grow up and have a better life than I do.

O'CONNOR: Newlyweds Lloyd and Colleen Polmateer are just starting to plan their family. Marriage means a combined income putting them into a higher bracket. Doing away with the marriage penalty will give them a little more to save for a bigger house. But more importantly, they say, less for Congress to waste.

COLLEEN POLMATEER, INTERNET SALESWOMAN: I think the more the Congress and the Senate have, they're just going to spend it on -- they'll spend it whether they need to or not.

O'CONNOR: For all these families, tax cut or not, what helps the economy, they say, is lawmakers sticking to a budget.

Eileen O'Connor, CNN, Washington.


SHAW: President Bush has indicated that he is willing to spend political capital to achieve his goals, such as tax cuts. So, how much capital does he have? Fifty-seven percent of Americans say they approve of Mr. Bush's job performance, according to the first Gallup Poll on the subject. This figure is comparable to the initial approval ratings for the past three presidents. But, George W. Bush has a higher disapproval rating, 25 percent, than any other new president in the last half century.

Ahead on INSIDE POLITICS, the Israeli election and the impact in the U.S.: From the potential international policy questions to the feelings of American Jews. Our coverage of Israel's decision continues.


WOODRUFF: Tomorrow's Israeli election could have a far-reaching effect beyond the Middle East. And depending on how the Arab world responds to the election winner, the vote could result in the first international test for President George W. Bush.

CNN State Department correspondent Andrea Koppel has the story.


ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): Officially, the U.S. isn't backing either candidate, but with right-wing opposition leader Ariel Sharon likely the next Israeli prime minister, the Bush administration issued a stern warning to Israelis and Palestinians.

COLIN POWELL, SECRETARY OF STATE: We can be in very, very big trouble in that part of the world if we don't see restraint on both sides come next Wednesday morning.

KOPPEL: That concern is shared by many in the Arab world, worried the Bush administration won't want to mediate continued clashes between Israelis and Palestinians. Not so, says Secretary of State Colin Powell.

POWELL: The United States is prepared to engage. I'm prepare to personally engage. President Bush is prepared to engage. But only after we have an indication of where the two sides are.

KOPPEL: What the Bush administration is not prepared to do: Devote all its time and energy to mediating a permanent peace deal, as the Clinton administration did.

And so, while the Bush team has urged restraint among Israel's Arab neighbors until the next Israeli prime minister gets settled, President Bush has also called key Arab allies, Saudi Arabia, Jordan and Egypt, to pitch his administration's plans to spend more time on issues like Iraq and Iran than the peace process.

But some analysts say that may be easier said than done.

DAVID MAKOVSKY, WASHINGTON INSTITUTE: If things get out of hand, this could cause some of the Arabs discomfort, and therefore there is a chance that you're going to see the administration coming back to this issue, but through the back door because to the extent it interferes with other U.S. objectives in the region, it's going to end up dealing with this issue.

KOPPEL (on camera): But the Bush administration insists it will do what it can from the sidelines, its fingers crossed the next Israeli leader will exercise restrained and won't be tested anytime soon.

Andrea Koppel, CNN, the State Department.


SHAW: The opinion of many Jews here in the United States mirror those of many Israelis: Disappointment with Barak's failure to reach a peace deal, but wary of Ariel Sharon.

CNN's Brian Palmer reports from New York.


BRIAN PALMER, CNN CORRESPONDENT (voice-over): A night of traditional music at a Jewish cultural center and nightclub in New York City, and a little opinion as well about Israel's election.

UNIDENTIFIED FEMALE: As the violence escalated, I think fewer people continued to believe in peace, and I think that's what the election is about.

PALMER: The race for Israel's top job between Ehud Barak and Ariel Sharon is also about frustration among American Jews with the lack of progress toward peace with the Palestinians, and with Barak, the man who promised it.

GARY ROSENBLATT, "JEWISH WEEK": The perception is that Barak went not only as far as an Israeli leader could go in offering peace to the Palestinians, but perhaps too far, and that it still didn't work. It was all rejected by Arafat, and there's a concern that Sharon, on the other hand, might be excessive in the other direction in terms of use of force.

PALMER: This Sharon supporter says making peace with Palestinians is impossible.

UNIDENTIFIED MALE: I think no matter what any Israeli prime minister gives them, they are going to want more and more and more. They still want to push Israel into the sea.

PALMER: But for longtime dove Michael Saxe-Taller (ph), Sharon is not the answer.

UNIDENTIFIED MALE: We want peace so badly we're looking for something to hang our hats on, and Ariel Sharon does not inspire hope even for people who are disillusioned with Barak.

PALMER: The line between liberal and conservative has seemed clear in the past, both in Israel and among Jews in the U.S. But recently that line between hawk and dove has blurred over such issues as dividing Jerusalem, and whether Palestinians displaced in 1948 have a right to return to what is now Israel.

UNIDENTIFIED FEMALE: It is unacceptable to protect Jews at the expense of other people, but what we have seen from our history, long and short-term, is that Israel must exist if we're going to survive, and so I don't see the right of return fitting into that. UNIDENTIFIED MALE: Once a prime minister is elected, much like once an American president is elected, despite all the trauma sometimes, people will rally behind the government because what they're really supporting is the state of Israel, whoever the prime minister is.

PALMER: And supporting the peace process, whoever the prime minister is.

Brian Palmer, CNN, New York.


SHAW: And please stay with CNN for the most complete coverage of the Israeli election. Our Christiane Amanpour will anchor our special coverage of the election results beginning tomorrow at 3:00 p.m. Eastern.

WOODRUFF: Up next on INSIDE POLITICS, the Minnesota governor tries his hand as a football commentator. Governor Jesse Ventura takes on his critics, and takes the microphone for the debut of the XFL.



VENTURA: Some of them left jobs. They left loved ones and they put it all on the line because practice started in November. They got paid not one nickel to go through these practices to arrive here tonight.


SHAW: Minnesota Governor Jesse Ventura, starting his second job over the weekend as a commentator for the new XFL football league, whose promoters promise more fun, harder hits, and more excitement than the National Football League, all delivered with the same noise and attitude as professional wrestling.

Well, at times the football took a back seat to a mix of on-field cameras, inside the huddle microphones and frequent shots of the cheerleaders. It was just sort of glitz and, at times, politically incorrect programming that caused some Minnesotans to criticize Governor Ventura's decision to join the XFL team.

Well, after the game, the governor said his critics are off the mark.


VENTURA: What do I say to those that criticize me? What I usually say to them. How you can criticize something before you see it? That's called biased and prejudice, usually. And you know, until you see the product, withhold your criticism. And this is football, and I knew it was all along. You know, it's a product that we were going to bring forward as professional football, and that's what we do did. And I think you know, in professional sports, you know, to me, once you accept money for a sport, it's business and it's entertainment.


SHAW: Well, a lot of people seemed to agree. Early results show the new league grabbed strong television ratings and won its Saturday night time slot. There.

WOODRUFF: And I didn't get a chance to watch.

SHAW: Nor did I. That's all for this edition of INSIDE POLITICS. But, of course, you can go online all the time at CNN's all; AOL keyword, CNN.

WOODRUFF: And this programming note: Republican Congressman J.D. Hayworth of Arizona and Democratic Congresswoman Nancy Pelosi of California will be talking tax cuts and other items on the Bush agenda tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

I'm Judy Woodruff.

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



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