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Inside Politics

President Bush Prepares to Unveil His Budget in Prime Time; Democrats Searching for a Way to Broadcast Their Message

Aired February 26, 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)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: I'll spend enough time speaking so the people understand where I'm coming from, but not too long so they can go to sleep.

(END VIDEO CLIP)

JUDY WOODRUFF, CNN ANCHOR: President Bush gets ready for primetime. We will preview his budget sales pitch to Congress and the American people.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Why is the tax cut a test for President Bush? Because he said it was.

(END VIDEOTAPE)

BERNARD SHAW, CNN ANCHOR: Bill Schneider calculates Mr. Bush's vested political interests.

WOODRUFF: Also ahead: the Clinton pardon controversy. Another witness refuses to testify.

SHAW: And we will review the results of an unofficial Florida recount.

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

SHAW: Thank you for joining us.

President Bush already has shown a certain ability to lobby lawmakers one on one, but tomorrow -- tomorrow he will have to prove himself in one of the ultimate presidential pulpits, a nationally televised address to Congress. As CNN's John King reports, Mr. Bush will promote his budget package, and in some ways, himself.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): The big speech is Tuesday night, the cabinet called in for a dress rehearsal.

BUSH: People are going to hear in plain spoken words why I believe -- strongly believe we meet priorities, pay down debt, protect Social Security and, as importantly, make sure that people get some of their own money back.

KING: The president's speech to Congress will be a defining moment.

PETER HART, DEMOCRATIC POLLSTER: There's going to be no Bill Clinton. There's going to be no any other distraction. It's going to be George Bush to the American public. And they'll be able to see him both substantively and stylistically. So for the president, this is a huge week.

KING: The first Bush budget is anchored on key campaign promises: a $1.6 trillion tax cut over 10 years, a nearly $5 billion increase for the Department of Education, $2.8 billion more for additional federal spending on medical research, and $1 trillion in contingency funds over 10 years. The president will propose using that money to cover the costs of allowing workers to steer some of their Social Security taxes into private investment accounts. Federal spending increased at an average annual rate of 6 percent in the last three budgets. Mr. Bush will propose a 4 percent increase, just a little more than keeping pace with inflation. And the budget will cut spending on some corporate subsidies favored by Republicans and other programs with deep Democratic support in the Congress.

BUSH: I readily concede some appropriators may not like the fact that we're asking for there to be fiscal sanity in the federal budget.

KING: A few Republicans in Congress say the tax cut is too big, and Democrats say the Bush budget raises the risk of a return to deficit spending.

SEN. JOHN KERRY (D), MASSACHUSETTS: If he reaches for a tax cut that's too big, that we can't afford, most of which goes to wealthy people at the expense of a lot of hard-working Americans, we're obviously going to have a fight on our hands.

KING: The president began the work week in the company of his former colleagues, the nation's governors. And the Republicans on hand promised help selling the tax cut as just the tonic for a slowing economy.

GOV. JOHN ENGLER (R), MICHIGAN: So many of us have the perspective of a tax cut big, fast, across-the-board and right now, so...

(LAUGHTER)

KING: Mr. Bush will hit the road later this week to sell the plan. Stops are scheduled in Pittsburgh, Pennsylvania, Council Bluffs, Iowa, Omaha, Nebraska, Little Rock, Arkansas, and Atlanta, Georgia.

(END VIDEOTAPE)

KING: Those stops aimed at lawmakers the White House believes will be critical in the budget debate down the line. And we know the president has been rehearsing his big speech. He began rehearsing over the weekend at Camp David, having a full runthrough here at the White House with top aides. Those aides acknowledge he understands the political stakes here and that he's very much looking forward to making his case first to the Congress and then to the American people.

Bernie?

SHAW: John, how is this president going to handle moderate Republicans, some of whom are skeptical?

KING: Gently for now, Bernie, the White House trying to make the case that, hey, in this budget there are things moderate Republicans have long called for -- increased spending for education, increased spending for medical research. In return, they want loyalty from those Republicans when it comes to the big votes on taxes in committee.

Right now, it's gentle lobbying, but they have sent word through the majority leader's office, especially in the Senate -- that's where this is closest -- that come down the road, if they need votes, they expect Republicans to stand with the president because they understand if the president loses this fight -- not that he'll get everything he wants, but if he loses this budget fight in the first year of his presidency, the White House knows this president will be viewed as weak by the Democrats.

SHAW: John King at the White House. Thank you.

Judy?

WOODRUFF: Well, Mr. Bush's big speech also presents Democrats with an opportunity to prove something. As CNN's Jonathan Karl reports, they are trying to master their new role as the opposition party.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CORRESPONDENT (voice-over): Democrats are calling President Bush's Tuesday speech the first major test of whether their party can mount an effective opposition now that Republicans are in control of both the Congress and the White House for the first time in more than 40 years.

SEN. EVAN BAYH (D), INDIANA: By definition, the Republicans have the bully pulpit and can speak with more or less a single voice. We run the risk of having a cacophony of voices. We'll have the leaders on the Hill, perhaps some governors, perhaps some organizations that are prominent.

KARL: Responding to President Bush, Democrats will speak with two voices, as House Democratic leader Dick Gephardt and his Senate counterpart, Tom Daschle, jointly give the Democratic response, underscoring the difficulties facing a party that now finds itself with no clear leader.

ANITA DUNN, FORMER BILL BRADLEY ADVISER: I think the challenge for the Democratic Party right now is to have many voices but one message.

KARL: Part of that message is reminding people that Republicans are now responsible for what happens in Washington.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: They're in control, and whatever happens on their watch is really going to be part of the record.

KARL: Democrats looking for leadership in the post-Clinton era didn't get much encouragement from a recent CNN/"Time" poll that asked, "Who is the leader of the Democratic Party?" Twenty-six percent said Bill Clinton, twenty-one percent Al Gore, thirteen percent Hillary Clinton, and eleven percent Ted Kennedy. The party's congressional leaders barely registered.

DASCHLE: We don't have the volume. We don't have the megaphone. All we can do is to target as much of our message as possible to those who are willing to listen, to the media, who will, hopefully, report our answers, and really to our colleagues. We're trying to influence our colleagues as much as we are the American people.

KARL: For now, opposition to the Bush tax cut has united moderate and liberal Democrats, but they are not entirely united in how to oppose it. While the Democratic leadership has sometimes portrayed the tax cut as a giveaway to the rich, Senator Evan Bayh, head of the moderate Democratic Leadership Council, says the message should be about fiscal responsibility not "class warfare."

BAYH: And some of the rhetoric, frankly, has bothered me because I think we need to stand for helping all Americans, stand for fairness without saying negative things about any group.

KARL: Party leaders plan to respond to Bush's speech with a campaign-style rapid-response effort and by organizing 70 speech- watching events in 45 states. It's an effort to energize the party base to fight the Bush tax cut.

(END VIDEOTAPE)

In their immediate response to Bush tomorrow, Democrats will say that the president's contention that he can increase spending, pay down the debt and have a big tax cut is simply too good to be true. And they hope to get some specifics to be able to prove that when Bush sends his first budget to Congress on Wednesday.

Judy?

WOODRUFF: Jonathan, when people like Senator Evan Bayh say that the argument should be fiscal responsibility, rather than "class warfare", is he suggesting that the leadership and Congressman Gephardt and Senator Daschle is going to be arguing "class warfare" tomorrow night? KARL: Well, not specifically tomorrow night. But if you do remember, Judy, when the Democrats came out with some of their initial opposition to the Bush tax cut, what they did is they went out and they had a Lexus and they said that the wealthy will have enough money from the tax cut to buy a brand-new Lexus, whereas the middle class will only have enough to buy a muffler. It is that kind of rhetoric that kind of heightens the difference between rich and poor that people like Evan Bayh are a little bit concerned about.

Tomorrow, though, we expect to hear more kind of expansive -- a more -- message of fiscal responsibility and priorities, maybe not as much of the "class warfare" rhetoric in the response from the Democrats.

WOODRUFF: And Jonathan, a change of subject. In the Senate, the Senate president pro tempore, Strom Thurmond of South Carolina, made an unusual appearance today? Is that fair to say?

KARL: Well, Strom Thurmond, of course, is 98 years old, the oldest person ever to serve in the U.S. Senate, also the longest- serving member of the United States Senate. He has been in some failing health over the last few months. He's had to check into the hospital on a couple of occasions due to exhaustion. But Strom Thurmond did make an appearance opening up the Senate at noon today.

It's not something that would have been unusual just last year. In fact, Strom Thurmond has day after day done that every day that the Senate has been in session, or virtually every day. But since January 25th, he has not done that, largely due to this exhaustion that has landed him in the hospital a couple of times over the past couple of months. But Strom Thurmond's spokesperson says that the senator is feeling better and that's why he made that trip into the Senate, and there you had him opening up the Senate, something he has liked to do very much over the last several years, many years.

WOODRUFF: All right, Jonathan Karl reporting from the Capitol, thanks.

Bernie?

SHAW: An all-out counteroffensive by Democrats may only up the ante for President Bush, who already has a big political stake in getting his budget package through Congress. Our Bill Schneider says that is especially true for the Bush tax cut plan -- Bill.

SCHNEIDER: You know that $1.6 billion [sic] tax cut is shaping up as something more than an agenda item for President Bush. It's becoming a test of his leadership, one that will show whether the new president can translate his personal popularity into political clout.

(BEGIN VIDEOTAPE)

(voice-over): Why is the tax cut a test for President Bush? Because he said it was last summer at the Republican convention in Philadelphia.

BUSH: Another test of leadership is tax relief.

SCHNEIDER: Every new president is tested. Congress must figure out if this is a man to be feared or someone they can defy with impunity. President Reagan faded that test with his tax cut back in 1981. Reagan proved he was someone to be feared. President Clinton faced the test with his health care reform plan in 1993. The plan failed, and Congress -- a Democratic Congress -- rolled right over the president.

Bush made the tax cut the defining issue of his presidential campaign, an issue of principle, he called it, to the delight of conservatives.

BUSH: Let us lay down another basic principle. No one in America should have to work more than four months a year to pay the Internal Revenue Service.

SCHNEIDER: To the surprise of some conservatives, Bush never abandoned his tax cut plan, even when he took office. Remember the big applause line in his inaugural address?

BUSH: And we'll reduce taxes to recover the momentum of our economy and reward the efforts and enterprise of working Americans!

SCHNEIDER: There's only one problem. There's no economic crisis in the country like there was when Reagan took office. Yes, Americans are concerned about an economic slowdown. But that leads them to wonder will the country be able to afford Bush's tax cut? Bush's response is, well, Reaganesque.

BUSH: I'm always amazed when I hear politicians say government cannot afford a tax cut. May I remind them that government does not pay for anything. The people pay for government. The question is not how much can government afford to give taxpayers. The question is how much the taxpayers can afford to give to government.

SCHNEIDER: Americans have also experienced something they didn't anticipate back in 1981: over a decade of huge budget deficits. President Clinton's parting message to the American people last month was "Don't make that mistake again."

(BEGIN VIDEO CLIP, JANUARY 18, 2001)

WILLIAM JEFFERSON CLINTON, PRESIDENT OF THE UNITED STATES: America must maintain our record of fiscal responsibility.

SCHNEIDER: Right now the public puts a higher priority on debt reduction than on a tax cut. Bush's biggest job tomorrow night: to convince Congress and the American people that we can do both.

(END VIDEOTAPE)

The new president has to create his own mandate. How? Well, by campaigning for his tax cut and hoping the press will cover it and pay less attention to the Clintons. You know, it's amazing that a new president is having trouble getting press coverage, but that's what happens when there's no crisis driving the agenda.

And by the way, that tax cut is actually not $1.6 billion. I misspoke. It's $1.6 trillion, which is a thousand times as much. As Everett Dirksen said, a billion here, a billion there, sooner or later it adds up.

SHAW: OK, Bill Schneider, thank you -- Judy.

WOODRUFF: Pretty soon you have real money.

SCHNEIDER: Right!

(LAUGHTER)

WOODRUFF: Well, we are joined now by Senate Budget Committee chairman Pete Domenici, Republican of New Mexico, and the ranking Democrat on that panel, Senator Kent Conrad of North Dakota.

Gentlemen, thank you for being with us.

SEN. PETE DOMENICI (R-NM), CHAIRMAN, BUDGET COMMITTEE: Thank you.

WOODRUFF: Senator Conrad, to you first. President Bush says he can not only do that $1.6 trillion tax cut, he can fund the nation's priorities, from Medicare to Social Security and he can pay down the debt. Can he do all three?

DOMENICI: Yes.

SEN. KENT CONRAD (D-ND), BUDGET COMMITTEE: Well, unfortunately, the Bush plan really doesn't add up. As I see it, he's getting ready to raid the Social Security and the Medicare trust funds, and he's talking about moving about a trillion dollars from those trust funds into an "uncommitted" category, apparently in preparation for Social Security privatization.

My own view is we ought to protect all of the Social Security and Medicare trust funds, and then with what's left, have a significant tax cut but as big as the one as he has proposed, and also reserve funds for a prescription drug benefit and to improve education and strengthen our national defense, and then also use part of this money to strengthen Social Security for the long term.

WOODRUFF: Senator Domenici...

DOMENICI: Hi.

WOODRUFF: ... is the president putting Social Security and Medicare in jeopardy here?

DOMENICI: Absolutely not. Frankly, we don't know what's in his budget. What we're trying to guess -- and I don't know where Kent Conrad gets all this information. But in any event, we're not going to touch Social Security. We're not going to touch Medicare. We are going to give the people back a big chunk of their money, and $1.6 trillion sounds like a number we ought to work with. It's probably doable. We're going to work hard at it.

And frankly, there's plenty of room to pay down the national debt. Our first priority is to commit enough money to pay down the national debt as soon as it is practicable. That means it won't be more than 10, 11 years, we'll have no debt left.

So you know, the Democrats -- every time we have something going and have a president's got positive stuff like this one -- you know, he's making everybody happy in this town. I don't know what your political analyst is talking about. Things are going well for President Bush.

Now, when he presents something that's always Social Security and Medicare. You watch it. They have never gone by without inventing the issue that it's the Republicans who are harming Social Security and Medicare. Now they're at it again, talking about a "lockbox," not spending Social Security money. You know, nine -- for nine years, we spent Social Security money, and most of the people talking about it voted to spend it. You know, we're not doing it for three years. We started it. Everybody's following. And that's good.

WOODRUFF: I don't think we're going to resolve the Social Security and Medicare question right here.

DOMENICI: No.

WOODRUFF: Senator Conrad, what about another point that I've heard Senator Domenici make, and that is he's concerned that if this money isn't set aside to at least pay down some of the debt and return to the taxpayers that Democrats are going to promote spending much of this money.

CONRAD: Well, that's just not true. First of all, we've got -- our proposal reserves $900 billion more for debt reduction than does President Bush's plan. He has $850 billion more for a tax cut. That's the difference. We're for more aggressive debt reduction. He's for a bigger tax cut. Look, we think things are uncertain. We think we ought to pay down more of the debt. He's only proposing paying down $2 trillion of this $3.4 trillion national debt. We don't think that's good enough.

WOODRUFF: Is that right, Senator Domenici, that the president's proposing only paying down a portion of the national debt?

DOMENICI: Well, let me -- let me -- let me just say another red herring. Frankly, he doesn't know that. We don't even know what's in his budget. That's a surprise to me. What we do know is when we're finished with this, we plan to pay down the debt as fast as is practicable because we can't pay it all down. We have to leave a trillion dollars or so there for things we cannot buy up. And we're going to do that.

The most important thing to understand is that every time a Democrat gets on a show with me, except for Kent Conrad, they talk about all the unmet needs in the country. Yesterday, Senator Kerry ticked them off, you know, scores of things we need, precisely what's going to happen. I said yesterday programs and projects and activities are going to grow like mushrooms around here so long as there is a big surplus sitting around to be spent.

WOODRUFF: But Senator...

DOMENICI: We ought to give it to the people. Give it back to them.

WOODRUFF: Senator Conrad, what about Senator Domenici's point that what you're saying about paying down the national debt is a red herring, in his words?

CONRAD: Well, I don't think it is at all. The numbers don't lie. We are for reserving $900 billion more than the president's plan to pay down debt. In addition to that, we're for putting aside part of this surplus now to strengthen Social Security for the future. And yes, we are also for reserving money for a prescription drug benefit and to improve education and to strengthen our national defense. Those are the priorities of the American people.

DOMENICI: Those are our -- our -- our priorities and President Bush's priorities. Very simply, we're going to pay down the debt. We're going to give the American people back a significant amount of their money so we'll never collect it. It'll stay in their hands. And we're going to take care of the high-priority items of this government. And that includes the items that have been talked about here by my ranking member -- Medicare -- we're going to take care of increased defense needs, education needs, NIH needs.

And when we're finished presenting it, it'll all fit and you can still say to the American people, "Keep a substantial portion of your money. We don't need it. You keep it."

WOODRUFF: Once again, Senator Conrad, we hear Senator Domenici saying what we've heard the president suggest, that all of these things can be done.

CONRAD: Well, that's true. The words are right, but the numbers don't match in what the president is about to propose, from what we have heard. And if he is saying we're only going to pay down $2 trillion of a $3.4 trillion national debt, that's not good enough. And if he's talking about transferring money...

WOODRUFF: But you just...

CONRAD: ... from the Social Security...

WOODRUFF: ... heard Senator Domenici say that you need to leave, what it is, a trillion of the debt un -- that it's unhealthy...

DOMENICI: Sure.

WOODRUFF: ... to pay it down too soon.

CONRAD: Look...

DOMENICI: That's a trillion.

CONRAD: ... we have no problem -- under the plan we have of reserving every penny of the Social Security and Medicare trust funds for the purposes for which they were intended, that will mean they will -- those monies will go down to pay down the national debt. We have no problem until the year 2010 with this question of unredeemable debt. We can do a lot more than pay down $2 trillion of this $3.4 trillion national debt.

WOODRUFF: How does this get resolved, Senator Domenici, or does it?

DOMENICI: Well, first I wanted to say, but I couldn't because I was so tempted by Mr. Schneider's comments about the president to answer him instead of you because I thought he totally missed what's happening to the president -- I think in this town, it's refreshing to have him here. I hope Kent Conrad feels the same way.

We're ready to get on with the public's business, and we're going to extend a hand to the Democrats to help us in a bipartisan manner. But if we can't do it, we'll go with the president. He'll go to the people. And I believe, in the end, for the Democrats to talk about who's paying the national debt down faster -- that's all right because we're going to be paying it down as fast as practicable.

And in the end, we're going to give the American people back what they're entitled to and pay down the debt by the most enormous amount the debt has ever been paid down in the history of nations, and certainly more than we ever dreamt of.

WOODRUFF: All right, well, Senator Domenici, Bill Schneider didn't stick around long enough...

DOMENICI: Good.

WOODRUFF: ... to defend himself. We'll have to set up...

DOMENICI: Tomorrow night we'll talk.

WOODRUFF: ... a discussion with the two of you.

DOMENICI: Good.

WOODRUFF: Thank you very much. Senator Pete Domenici, Senator Kent Conrad, good to see both of you. And we'll see you again soon.

DOMENICI: Thank you.

WOODRUFF: Thank you.

Still ahead on INSIDE POLITICS: the most controversial Democrat. We'll look at what's in store at this week's congressional hearing into the Clinton pardons.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DASCHLE: It is disappointing, clearly. Obviously, you would like to think that that chapter in our history would be closed and we could move on. I think the time will come when we do move on. But these revelations don't help. Obviously, it's a difficult time. But nonetheless, I think what the key question is, is how do we face the issue of the day and address them in a way the American people expect us to? And that's what tomorrow night's all about.

(BEGIN VIDEO CLIP)

SHAW: The leader of the Democrats in the Senate, Tom Daschle.

Also on the Hill, the investigation into the pardons granted by former president Clinton is pressing ahead, fueled by the latest news of Hugh Rodham's involvement in several clemency requests. On Thursday the House committee led by Dan Burton of Indiana will resume hearings into the controversial pardon of financier Marc Rich.

CNN's Patty Davis takes a look at who is on the witness list.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): Democratic fund- raiser Beth Dozoretz plans to take the 5th Amendment before a House committee looking into President Clinton's controversial pardons. Dozoretz is scheduled to testify Thursday on her role and that of Denise Rich in the pardon of Rich's ex-husband, fugitive financier Marc Rich. But a lawyer for Dozoretz said she wouldn't testify because of the pendency of other investigations.

House Government Reform chairman Dan Burton said, "It is very troubling that Beth Dozoretz and Denise Rich, both close friends of former president Clinton, who discussed the Rich pardon with him, would refuse to testify."

Burton meanwhile issued an ultimatum, pressing for access to donor records of Bill Clinton's presidential library, let House Government Reform Committee staff take a private look at the library's list of big donors. If not, Burton told library lawyer David Kendall, he's prepared to consider requesting a vote to hold the Clinton library and library president Skip Rutherford in contempt. And Burton said he's also subpoena Clinton library bank records.

Burton has said he wants to know whether straw donors gave money to the library to win pardons.

REP. DAN BURTON (R-IN), CHAIRMAN, HOUSE GOVERNMENT REFORM COMMITTEE: If there was any quid pro quo or money or influence exchanged for the pardons, then that's a criminal offense.

DAVIS: Meanwhile, more questions are being raised over Senator Hillary Clinton's brother, Hugh Rodham, who received $400,000 to help two men with clemency applications. Rodham wasn't talking following a "Washington Post" report that he lobbied White House lawyers to win pardons for two others, Gene and Nora Lum, convicted of making illegal campaign contributions to Democrats. The pardon applications bypassed Justice Department review.

In the end, though, former President Clinton rejected the request. It's not known whether Rodham received money for his alleged work for the Lums. All Rodham's attorney would tell CNN -- "He did not advocate for the Lums."

(END VIDEOTAPE)

There is no word on whether Rodham will be asked to testify before the congressional committees. One House aide in that committee says that that committee should wrap up its investigation of the Clinton pardons in the next few weeks.

Judy?

WOODRUFF: Thank you, Patty. Patty Davis at the Capitol.

There's much more to come in INSIDE POLITICS, including a conversation with two governors about the president's tax cut and education plans.

Also ahead: a triumphant return to Kuwait for George Bush, the father. We will examine U.S. policy toward Iraq 10 years after the allied victory in the Gulf war.

And later...

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Oil development in the Arctic Wildlife Refuge make as much sense as chopping down the giant redwoods for firewood.

(END VIDEOTAPE)

WOODRUFF: The political battle brewing over oil in Alaska.

(COMMERCIAL BREAK)

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

Most of us probably know that high cholesterol and high blood pressure are risks for heart disease, but today a new study shows evidence of other factors. A report in the journal "Circulation" says other risks for heart disease may include recurrent sinusitis, bronchitis and urinary tract infections. Researchers say these infections can lead to inflammation of the arteries, which in turn can lead to heart disease. You should consult your doctor if you have concerns.

WOODRUFF: The Consumer Product Safety Commission is announcing a recall of nearly 460,000 night lights. The Dura Kleen night lights were sold in discount stores between March of 1999 and August of 2000 for about a dollar. The commission says the lights present a fire and shock hazard and should be returned to their place of purchase for a full refund. Software giant Microsoft says it did not illegally try to muscle out the competition. Lawyers made that argument in appeals court today. The company is contesting a court-ordered breakup from last year. A panel of judges is hearing arguments in federal court in Washington. Reportedly, the judges hammered both sides with questions and comments. Statements today focused on Microsoft's battle with Netscape, its chief competitor in the Internet browser market.

(BEGIN VIDEO CLIP)

STEVE DELBIANCO, ASSISTANT FOR COMPETITIVE TECHNOLOGY: What I saw today was the entire panel of judges seems impatient and aggravated that the government has brought into this case a real competitive dog fight. They have to wonder, as we wonder, why, when competitors decide to duke it out for the next monopoly, no one asks questions about consumer benefits or consumer harm.

(END VIDEO CLIP)

WOODRUFF: The U.S. Justice Department says Microsoft used illegal methods to protect its monopoly.

Daimler-Chrysler announced a new restructuring plan aimed at pushing the giant car maker back to profitability. The German-owned auto maker announced its profits for the year 2000 plummeted by 90 percent. Chrysler says it lost more than $1.2 billion in the fourth quarter of last year.

SHAW: Two boats collided today off the Gulf coast of Florida, leaving one man dead and another critically injured. The collision occurred in foggy weather off Marco Island this morning. Authorities say a 22-foot pleasure craft was struck by a bigger boat carrying 120 passengers. A third person on the pleasure craft suffered lesser injuries. No one was injured on the larger vessel.

Florida is banning outdoor burning in more than half of its counties because of drought conditions and the risk of wildfires. Since the first of the year, more than 1,400 wildfires have burned some 93,000 acres in Florida. A fire has forced the closure of a 10- mile stretch of interstate 4 since early last year. Transportation officials hope to have the stretch reopened tomorrow.

After the break, a look at how the president's agenda is playing beyond the Beltway. The governors of Oklahoma and New Hampshire join us to consider taxes, education and tomorrow night's address to Congress.

(COMMERCIAL BREAK)

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

Most of us probably know that high cholesterol and high blood pressure are risks for heart disease, but today a new study shows evidence of other factors. A report in the journal "Circulation" says other risks for heart disease may include recurrent sinusitis, bronchitis and urinary tract infections. Researchers say these infections can lead to inflammation of the arteries, which in turn can lead to heart disease. You should consult your doctor if you have concerns.

WOODRUFF: The Consumer Products Safety Commission is announcing a recall of nearly 460,000 nightlights. The Dura Kleen nightlights were sold in discount stores between March of 1999 and August of 2000 for about a dollar. The commission says the lights present a fire and shock hazard and should be returned to their place of purchase for a full refund.

Software giant Microsoft says it did not illegally try to muscle out the competition. Lawyers made that argument in appeals court today. The company is contesting a court-ordered break-up from last year. A panel of judges is hearing arguments in federal court in Washington. Reportedly, the judges hammered both sides with questions and comments. Statements today focused on Microsoft's battle with Netscape, its chief competitor in the Internet browser market.

(BEGIN VIDEO CLIP)

STEVE DELBIANCO, ASSOCIATION FOR COMPETITIVE TECHNOLOGY: What I saw today was the entire panel of judges seems impatient and aggravated that the government has brought into this case a real competitive dog-fight. They have to wonder, as we wonder, why when competitors decide to duke it out for the next monopoly, no one asks questions about consumer benefits or consumer harm?

(END VIDEO CLIP)

WOODRUFF: The U.S. Justice Department says Microsoft used illegal methods to protect its monopoly.

DaimlerChrysler announced a new restructuring plan aimed at pushing the giant car-maker back to profitability. The German-owned auto-maker announced its profits for the year 2000 plummeted by 90 percent. Chrysler says it lost more than $1.2 billion in the fourth quarter of last year.

SHAW: Two boats collided today off the Gulf Coast of Florida, leaving one man dead and another critically injured. The collision occurred in foggy weather off Marco Island this morning. Authorities say a 22-foot pleasure craft was struck by a bigger boat carrying 140 passengers. A third on the pleasure craft suffered lesser injuries. No one was injured on the larger vessel.

Florida is banning outdoor burning in more than half of its counties because of drought conditions and the risk of wildfires. Since the first of the year, more than 1,400 wildfires have burned some 93,000 acres in Florida. A fire has forced the closure of a 10- mile stretch of Interstate 4 since early last week. Transportation officials hope to have the stretch reopened tomorrow.

After the break, a look at how the presidential agenda is playing beyond the Beltway: The governors of Oklahoma and New Hampshire joins us to consider taxes, education and tomorrow night's address to Congress.

(COMMERCIAL BREAK)

SHAW: The nation's governors gave their former colleague President Bush a generally warm reception in meetings last night and earlier today. But beneath the surface, the governors represent a unique constituency in all 50 states and they could help or hurt the president's tax cut and education reform efforts.

Joining me to discuss these and other issues one day before the president's address to Congress and the nation: Oklahoma's Republican Governor Frank Keating, and New Hampshire's Democratic Governor Jeanne Shaheen.

Starting with you, from New Hampshire, governor, are you going to lobby for President Bush's $1.6 trillion tax cut and his proposed federal budget, details of which we'll learn tomorrow night?

GOV. JEANNE SHAHEEN (D), NEW HAMPSHIRE: Well, I'm interested in seeing the details of the budget first. I think, I certainly support a tax cut. I think the question is: Can we do a tax cut, a reasonable tax cut that also maintains our priorities on addressing Medicare, doing something about prescription drugs for our senior citizens, making sure we continue to fund children's health insurance, looking at what we need to do for education in this country.

I think that those are the questions and I think we all want to see a tax cut. We want the money to go back to middle-class folks in this country, but we want to make sure that we protect the priorities that the people in this country have said they support, and that we pay down the national debt.

SHAW: Governor Keating, you're a lobbyist for the president's tax cut and his budget?

GOV. FRANK KEATING (R), OKLAHOMA: Of course. Now, Jeanne and I are friends and we Republicans and Democrats as governors are convivial, but neither of us are running against each other, but the Democrats will have, probably, support for maybe an $800 billion tax cut and Republicans $1.6 trillion are absolutely magical numbers.

But we think, we Republicans think to give one quarter out of every dollar back in tax relief, to spend $800 billion to pay down the debt, and that's what President Bush and truthfully, Mr. Greenspan, feel is the only reasonable figure that can be used, to take money aside to help us in Medicaid and Medicare, to save Social Security, to rebuild the military, and also focus on things like educational reform that he is.

We think that's sound. Remember, the president is going to present a budget, present an agenda. It's up to the Congress to dispose of it and I think the Congress will give him very fair consideration.

SHAW: You're smiling. SHAHEEN: Well, as we say, the devil is in the details and I think the question is, can we maintenance these other priorities that we know are important to the country and important to our folks out there, and still pay down the debt, and provide a decent tax cut to people. And I think that's something that we can agree on. I think the only question is, which of those priorities are we going to maintain?

SHAW: Before I move to education, you said something that was very interesting. You said that the Democrats are for a reasonable tax cut. Is the president's tax proposal unreasonable?

SHAHEEN: Well, I think we need to be able to maintain the priorities that we've already been committed to. I would like to see a prescription drug benefit for our seniors under Medicare. That's a huge issue for our older citizens in New Hampshire.

I would like to see us be able to continue to provide children's health insurance. I want to make sure that we're covered under Medicare, all of those people that we've committed to. I want to see our veterans continue to have medical benefits.

SHAW: President Bush wants you, your state; you, your state, and the states of your 48 other colleagues to test all students grades third through eighth on their reading and math skills. Do you support that?

KEATING: Well, I think what's important is to recognize that...

SHAW: Do you support it?

KEATING: ... many public schools don't work and the only way you're going to find out if they work is by testing. I'm not sure we need to test every single year from third to eighth. Some states test every other year. Some states test every year, but I think what the president wants is results.

The federal government provides maybe 7 percent of the money we spend on education. But if that money flows to the states, let's make sure that it flows to the states for rigor and excellence, make sure we don't socially promote. Let's make sure that people read at grade level by grade three.

I think, again, the devil is in the details, but all of us would agree to raise the bar in education to make us truly competitive, and we're not competitive in science and math education in America now. We need to do something hard and soon in education in America.

SHAW: Your colleague says test, but not every year. What say you?

SHAHEEN: Frank and I agree on this. I think that the president got the message from governors that we support his setting of high standards; we support the importance of testing to make sure that we can measure how kids are doing, but that states need to be given the flexibility to go forward with our own assessments programs -- we have one in New Hampshire -- and the flexibility to be able to use what the states are doing; to be able to use what is going on at the local level and if Washington wants us to test every child, every year, that Washington needs to pay for that.

SHAW: That was going to be my next question. How much would it cost you in your states -- and fast -- we're running out of time.

KEATING: Well, you don't have to use the federal test. We have NAPE and all of these other tests. To paraphrase Abraham Lincoln and what President Bush said, everybody ought to grab a leg if you are going to do some skinning. And if we are spending money on education, let's make sure that it works.

SHAW: When you told him that Uncle Sam would pay for this -- must pay for it -- what was his response?

SHAHEEN: Well, he acknowledged that it's important to give states flexibility. I think that is what all of us wanted to hear. You know, I will take him in his word. I am going to assume that we will be able to get the flexibility that we need do reasonable testing, to make sure that our kids are succeeding.

SHAW: But not every year as he wants?

KEATING: Well, in some cases, maybe we should test every year, and in other cases, states -- have a much different approach and they can find that results go up, even though it's tested every year and a half -- or every two years -- so maximum flexibility. But what the president wants are results and I knowledge that that's perfectly legitimate.

SHAHEEN: We all want results.

SHAW: The governors of New Hampshire and Oklahoma. Thanks so much.

KEATING: Sure.

SHAHEEN: Thank you.

SHAW: Judy.

WOODRUFF: While the president was perhaps thinking about his budget address tomorrow night, first lady Laura Bush visited a Maryland elementary school today, in the first of what she said will be many appearances promoting education.

Mrs. Bush told students, parents and teachers at Cesar Chavez Elementary that she plans to help the president keep his promise to make education his number one priority.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY: We must do more than say that all children can learn. We must believe it. If Cesar Chavez were here today, he would agree and he would say, in the words that immortalized him, "Si Se Puede" and he would be right. You can do it.

We are wise enough to know what can be done. We are bold enough to reach across ideological lines and work together and we are strong enough to ask nothing but the best for those who would lead the way.

(END VIDEO CLIP)

WOODRUFF: Mrs. Bush also said she plans to visit colleges and military bases, to help recruit new teachers for the nation's classrooms.

Just ahead, celebrating the liberation of Kuwait 10 years later, a look at the U.S. policy on Iraq and the Secretary of State's new mission.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE BUSH, 41ST PRESIDENT OF THE UNITED STATES: The United States will never leave Kuwait down. We are never going to betray our responsibilities to continue to help preserve the peace of Kuwait. We fought too hard, too many died.

Too many died to make it happen. So I would simply say to those Kuwaiti soldiers, you are not alone, you never will be. God bless you.

(END VIDEO CLIP)

SHAW: Former president Bush was in Kuwait City today, to mark the 10th anniversary of Liberation Day, the end of Iraq's occupation of Kuwait. Secretary of State Colin Powell, who was the chairman of the joint chiefs of staff during the Gulf War, was also on hand at the ceremony. As Andrea Koppel reports, Powell was already in the region, promoting U.S. policy and the use of U.N. sanctions against Iraq.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): For the former top U.S. military man-turned top U.S. diplomat, Colin Powell's return to Kuwait provided a picture-perfect setting for the secretary of state to reiterate U.S. support for this tiny Gulf state.

COLIN POWELL, SECRETARY OF STATE: Ten years ago, we stood together. Ours was a noble cause. It still is. And we stand together again in that cause today, as coalition members still pledge to guard against aggression.

KOPPEL: Ten years ago, as chairman of the joint chiefs of staff, Powell helped lead U.S. and Allied forces to their Gulf War victory, forcing Iraq's president, Saddam Hussein, to withdraw his army from Kuwait.

(on camera): But only an hour's drive from today's festivities, just over the border from Kuwait, Saddam Hussein is still in power, seemingly impervious to his Gulf War defeat for 10 years of U.N. sanctions.

In fact, among many in the Arab world, he's more popular than ever, while support for sanctions has hit an all-time low. Colin Powell's mission during this Middle East tour: to convince Iraq's Arab neighbors Saddam Hussein remains as much a threat to their security today as ever, and at the same time rebuild support for some form of sanctions.

Still, Powell's job elsewhere in the region won't be easy. Five months of Israeli-Palestinian clashes and recent U.S.-British air strikes against Iraqi radar sites near Baghdad have made it even more difficult for moderate Arab states to continue to support sanctions.

GEOFFREY KEMP, NIXON CENTER: Iraq's economic ties with key players like Jordan and Turkey are improving day by day, with Syria also. So, you know, Colin Powell has very few cards to play if he tries to reenergize the coalition against Saddam.

KOPPEL: But that's exactly what Powell says he wants to do and will have to do if the Bush administration is going to achieve one of its key objectives: ensuring that 10 years after the Allies won the war, President Hussein doesn't win the final battle.

Andrea Koppel, CNN, Kuwait.

(END VIDEOTAPE)

WOODRUFF: The sanctions against Iraq are also a key topic at the United Nations today. Secretary General Kofi Annan opened two days of talks with Iraq's foreign minister, in an effort to break the impasse over the issue of u.n. Weapons inspectors in Iraq. Iraq has barred inspectors for more than two years, but in order to lift sanctions, the U.N. must be able to verify Iraq's compliance with the disarmament requirements. Annan says the change in the U.S. administration could influence decisions on whether to modify the current sanctions.

When INSIDE POLITICS returns: the Washington showdown over Alaskan oil. One senator says he's prepared to wage a titanic battle over energy policy: including exploration in the Arctic National Wildlife Refuge.

(COMMERCIAL BREAK)

SHAW: On the Hill today, Senate Republicans introduced a bill that would allow oil exploration in Alaska's arctic national wildlife refuge. Supporters say drilling in the region can be done without damaging the environment. But environmentalists say the risk is not worth the potential reward.

Here's CNN environment correspondent, Natalie Pawelski.

(BEGIN VIDEOTAPE)

NATALIE PAWELSKI, CNN ENVIRONMENT CORRESPONDENT (voice-over): On the surface, the arctic national wildlife refuge is a wild and natural treasure. Underneath, it is, potentially, one of the biggest oil fields in North America.

MARK RUBIN, AMERICAN PETROLEUM INSTITUTE: That's where the oil is. It's the best place to look for oil in the United States, and there's predicted to be more oil there than any other place that we can look for oil in the U.S.

JIM WALTMAN, WILDERNESS SOCIETY: Oil development in the arctic wildlife refuge makes as much sense as chopping down the giant redwoods for firewood. We don't need the oil, and that oil would not start flowing for at least 10 years.

PAWELSKI: Congress set up the huge arctic national wildlife refuge, about the size of South Carolina, back in 1980. It left the door open for drilling on about 8 percent of the refuge, along the coastal plain.

President Carter, who signed ANWR into being, says drilling there is still a bad idea.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: This reserve, if tapped, would only provide about 180 days of U.S. oil consumption, which is a tiny drop in the bucket.

They could be matched or exceeded, if we just tightened up a little bit on the number of gas guzzlers that the automobile companies have produced.

PAWELSKI: Drilling supporters say boosting domestic oil production is a matter of national security.

SEN. FRANK MURKOWSKI (R), ALASKA: We will reduce our reliance on foreign sources of oil to less than 50 percent by the year 2010 to protect our energy security, and, yes, ANWR will be a part of that legislation.

PAWELSKI (on camera): Plans to drill in the arctic refuge were on track during the presidency of George Bush the elder. Then, in 1989, the Exxon Valdez disaster derailed that plan.

The oil industry says it's learned a lot since then, and it's time to reconsider.

(voice-over): Nobody's sure exactly how much oil is under the arctic refuge. The government's best guess, at current oil prices, about six billion barrels would be worth pumping out. A potential gusher, the oil industry says, cannot be ignored, while the wilderness conservationists say, must be preserved.

Natalie Pawelski, CNN.

(END VIDEOTAPE)

WOODRUFF: There is even more INSIDE POLITICS ahead.

In the next half hour, the president's appeal to his former colleagues. Plus, "The Miami Herald" on the likely outcome of those controversial Florida recounts. The results of the latest ballot investigation when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

SHAW: President Bush faces an early test when he speaks to Congress tomorrow. Will he pass it and get his budget passed too?

Also ahead...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: There's still a lot of raw emotions about our feelings.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

LOU WATERS, CNN ANCHOR: George Bush, the governor of Texas, will become the 43rd president of the United States.

(END VIDEO CLIP)

WOODRUFF: Gore and Bush campaign officials look back on the Florida vote, even as the results of a media recount are released.

SHAW: Plus, another George W. Bush who made a name for himself.

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

WOODRUFF: Welcome back to INSIDE POLITICS.

When President Bush was asked if his address to Congress tomorrow night would be shorter than presidential speeches of the past eight years, he responded only with a chuckle.

He did tell reporters that he plans to offer a plain-spoken pitch for tax cuts, paying down the debt, and his other budget priorities.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: What I'm going to say to the American people is that had we kept spending at the rate we were spending last year, there'll be no surplus, that the size of growth in the federal budget that -- and the budget we inherited was way too high, that we can meet our needs by slowing down the rate of growth in our budget.

But it requires a president to set priorities. And I'm going to set clear priorities in the budget.

(END VIDEO CLIP) WOODRUFF: Mr. Bush found a receptive audience for his $1.6 trillion tax plan among Republicans attending the national governor's conference here in Washington.

Democrats, of course, are a harder sell, particularly those who have a vote on the matter on Capitol Hill.

And let's go now to our senior White House correspondent, John King.

John, tell us what are Democrats really looking for in the president's speech tomorrow night?

KING: Well, in the speech tomorrow night, they don't expect to get too many of the specifics. Their case after the speech most likely will be, they don't think the plan adds up.

What they want is the actual budget outline on Wednesday morning so that they can to start using the word cuts. They want to say this president is being insensitive; that he's cutting programs for the homeless; that he's cutting the popular community policing program put in place by President Clinton. They want to suggest that to pay for his tax cut, this president and the Republican Party are cutting very popular programs.

The White House says some things will be cut, but most of all, they say this president will consolidate spending. We're about to have an honest-to-God debate over the role of the government. President Bush will start it in his speech to the Congress. Democrats, as Jonathan Karl reported earlier, still struggling a little bit to find exactly what their voice should be in this debate. But look for them to use the word cut a lot in the days ahead.

WOODRUFF: John, does it make it harder for the Democrats now that the president is saying one of his main priorities with all of this is going to be not only the tax cut, but paying down the debt to a degree?

KING: Paying down the debt, and increasing spending on education and medical research: All popular ideas, all pushed by former President Clinton. This, very different Republican president. The debate not unlike the debate President Clinton had with the Congress when the Republicans took charge in 1994 after the 1994 election.

But again, the Democrats have to do this with different voices now because the Republicans control both the Congress and the White House. So, it is a different debate. But President Bush trying to make it all the more harder on them because in his experience as governor, he knows how to put things in a budget that are politically popular.

WOODRUFF: And finally John, is the White House prepared to talk about a so-called trigger; that is, making some of this tax cut dependent in the latter years or the so-called out years, dependent on the state of the economy? KING: No, the White House flatly opposes that. The White House does know that support comes from moderate, Northeastern Republican senators, the senators from Maine and Vermont and Rhode Island all talking about some sort of trigger mechanism.

What the White House will say is that we don't need that, that the Congress debates the budget every year. And there was a big downfall in government revenues, then you would adjust the tax cut. But if there are triggers in the budget, the White House line is they should be on spending, not on the tax cuts.

WOODRUFF: All right, John King reporting from the White House. Thanks.

And we are joined now by Ron Brownstein of "The Los Angeles Times." Ron, how much of a test is this for the president tomorrow night?

RON BROWNSTEIN, "LOS ANGELES TIMES": I think it's a big test. I mean, he's had an extraordinarily placid first five weeks in office, really, largely because so much the focus has been diverted toward his predecessor, Bill Clinton, who's left office breaking all the china along the way.

This really begins, though, the harder work of building a public consensus for his tax cut and generating some pressure on Congress. That is going to be the centerpiece of his speech, the tax and budget plan, and on those fronts, Judy, he does need to do some work. He's seen some erosion in the last few weeks after a very strong start in terms of expressions of support for the tax plan.

WOODRUFF: Talk about that erosion and what does he have to do to deal with it?

BROWNSTEIN: Well, the erosion has been really in both parties. He's seen a little slippage. As John mentioned, you have a number of Northeastern Republicans and moderate Republicans really from elsewhere who are raising concerns about the size of the tax cut. Two, Jim Jeffords, Lincoln Chafee, have already said it's too big.

A number of others are talking about a trigger, and the White House may have to worry a little bit about getting what you ask for in that Olympia Snowe is working with Senator Evan Bayh, a Democrat, Olympia Snowe a Republican from Maine, to craft a trigger for the tax cut that also includes a trigger for spending increases. So it might sort of close out one of those White House arguments.

On the other side, no other Democrats have followed Zell Miller across the line in endorsing the plan. And what you've seen is very little pressure on Democrats so far. Now, the White House believes that ultimately they can generate enough public pressure to force some of these Democrats, particularly in states that Bush carried, over the line to support their plan. But to do that, they have to get the focus on them and their agenda and that's where the Clinton scandals become a bit of a mixed blessing for them. WOODRUFF: Ron, we heard John King talking about how the White House is holding off on providing details on where -- on just how much more -- or where there's going to a little bit more or maybe even a little bit less in some important domestic programs. How long can the White House afford to hold off on those kind of details?

BROWNSTEIN: Well, they're saying they're going to hold off until April. They're in a little bit of a Catch-22 because one of the reasons why the Democratic leadership in the Congress, especially in the Senate, has been able to hold other Democrats from moving to endorsing Bush's plan is because they've been able to argue look, let's see how it all fits together and what has to give in order to get the money to pay for the tax cut.

So, the later they wait on the details, the more they reinforce that argument. But Judy, I think in a larger sense, Bush here is being pushed toward a debate that he's successfully avoided throughout his career as a national politician. He really has never been in the position that we saw, as John mentioned, in the '95 budget fight where his tax cut is counterposed against cuts in social program, where he seems to be cutting programs for the poor and the middle class to pay for a tax cut.

And the risk he faces is by holding down spending to the degree that he wants to, that Democrats will begin making those arguments again and may score some points with him.

WOODRUFF: What can he do to keep that from happening?

BROWNSTEIN: Well, this is, as John said, this is a different debate. I mean, he is doing some things. He is trying to make the argument, newly in the last couple of days, that he is paying down as much of the national debt as can safely be paid down without having to pay a premium to bond-holders...

WOODRUFF: Which is about what, two-thirds?

BROWNSTEIN: Two-thirds of it. Right, two-thirds of the national debt, publicly held national debt. They other thing he's doing is trying to in a very public way increase spending in a few targeted areas like health research and education spending so as to undercut the idea that he is squeezing the budget.

There is a lot of money here, Judy, at least in these projected surpluses. So, there is room for them to increase spending in some areas while providing this tax cut. Democrats are going to argue, though, that there are too many priorities that will be squeezed.

WOODRUFF: Ron, as we all know, he is looking at a 50/50 divided Senate. He's looking at a House where the Republicans have only a slim majority. How does the president both give in, in order to win, and say I held my ground and I'm a leader?

WOODRUFF: Well, that's what -- you know, he did this very well in Texas. I mean, he actually did -- he gave ground substantively on all of his major initiatives and yet moved the ball in his direction. There's no question that in a broad sense, we are talking about not only a size but a kind of tax cut that we would not be discussing at all if Al Gore had gotten those last chads in Florida.

So, in that sense, Bush is going to be a winner. The question is how much does he have to give up to get those last few votes, particularly in the Senate. The House may be an easier sell for him.

WOODRUFF: All right, Ron Brownstein, thanks very much -- Bernie.

SHAW: Well, you could say President Bush got an unofficial, second opinion on his White House victory today from "The Miami Herald." The newspaper released partial results of its recount of Florida ballots, even as a task force released recommendations for fixing the state's election system.

We get details from CNN's Susan Candiotti.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): Rehashing Florida's chaotic election still attracting audiences, including this one at the University of Florida.

UNIDENTIFIED MALE: It was quite an election.

CANDIOTTI: The latest review from "The Miami Herald": Its recount of 10,000 undervotes in Miami-Dade County, ballots that registered no machine count, netted only 49 more votes for Gore, far less than the 600 his camp had predicted. Combining those with three other counties Gore wanted recounted, "The Herald" reported Bush would have been the victor by 140 votes.

The newspaper says the ballots reflected a vast amount of voter error.

TOM FIEDLER, "THE MIAMI HERALD": People went into the polls, in many cases intending to cast a ballot for one or the other, in most cases for Vice President Gore, and for whatever reason, they spoiled the ballot and ultimately, this was a human failure.

CANDIOTTI: David Boies, joining his one-time legal adversaries on an election panel, says the newspaper findings don't change what the vice president's battle was all about.

DAVID BOIES, GORE ATTORNEY: The thing that was important was not merely who won or who lost, but that the votes be counted.

CANDIOTTI: The attorney who opposed the recounts on behalf of Secretary of State Katherine Harris says without uniform standards, the recount became a vicious battle.

JOSEPH KLOCK, KATHERINE HARRIS' ATTORNEY: I believe at every level, most people just wanted to win, the process be damned, you know, and that was the object of the game.

CANDIOTTI: Change is coming. Florida Governor Jeb Bush's election task force has just completed its recommendations to fix a broken system, calling for voter education and an optical scanning system in place by 2002, costing at least $20 million. Secretary Harris favors spending $200 for electronic balloting. Republican legislative leaders don't give that expensive solution much of a chance.

(on camera): Media recounts are not complete. CNN is part of a consortium of major newspapers still reviewing ballots and "The Miami Herald" is going over additional counties, indicating those results may favor former Vice President Gore. All purely academic at this point but, analysts say, an invaluable learning tool.

Susan Candiotti, CNN, Gainesville, Florida.

(END VIDEOTAPE)

SHAW: And for more on how "The Miami Herald" conducted its ballot analysis, I'm joined by the paper's managing editor for news, Mark Seibel. Mark, what was the standard used?

MARK SEIBEL, "THE MIAMI HERALD": Well, what we did was described the ballots initially. We asked our accountants and our reporters who were assigned to look at the ballots to simply describe them. Were there dimples? Where was the dimple?

And then we took that information and put it in a computer program which simply tallied up the information. Then we had several different ways that we could parse that information: A restrictive standard which would have looked only at hanging chads, what we call the Palm Beach standard that would have required a dimple to also have dimples in other races, and then we also had what I called the broadest standard, which was if you made any marking for presidential candidate, whether it was a dimple or a pinprick or hanging chad or a clean punch we counted it.

That's where we came up with the 49 number. And in this particular instance, the result was the same no matter how you -- how restrictive you were. It was 49, if you really applied no restrictions, if you took the most liberal interpretation of every ballot. It was 26, if you made it more restrictive.

SHAW: Looking at the overall battle, were there any ironies in the strategies of the Bush and Gore people?

SEIBEL: Well, I believed that's the -- really, the story of this ballot review at this moment -- is that the irony is, Gore requested recounts in four counties. The Republicans opposed that. If the Republicans had not opposed it, if they had just said, go ahead and count those four counties, then the conclusion would have been -- after much less time than it took -- that there were not enough votes for Gore to win. Bush would have been declared the president, and the court challenges might not have happened.

SHAW: And what irritated you about the Republican position on the Dade county vote? SEIBEL: Well, I just felt, as a person who had voted, that it was odd not to count ballots, you know. And I think that was -- a lot of people felt that way, that certainly a manual recount of a ballot is not an unusual thing in the United States.

And for someone -- for a candidate to request it is not -- certainly not unprecedented. It happens all the time. Of course, the thing that this review has shown so far is that a selective recount would have not worked for the vice president.

SHAW: OK, and before we leave you, when might we expect the full statewide vote?

SEIBEL: Well, we've counted all but about two -- well, all but exactly two of the counties in Florida. We're waiting for a judge to authorize us to have access to those ballots in Holmes county, which is in the panhandle; and Duval county, which is in Jacksonville.

As soon as that happens, it should be very few weeks.

SHAW: "The Miami Herald's" managing editor for news, Mark Seibel, thanks so much for joining us.

SEIBEL: Thank you, Bernie.

SHAW: Quite welcome.

And by the way, when asked about today about the results of that "Miami Herald" recount, President Bush said he feels good about it, but then he tried to turn the focus to his big budget pitch to Congress.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, THE PRESIDENT OF THE UNITED STATES: Hopefully, all the focus on the past is over with, it's time to move forward. And tomorrow night's speech is a part of moving forward. We've worked hard in this administration to reach out to people who may not have supported me.

I think we're making pretty good progress.

(END VIDEO CLIP)

SHAW: And in an interview with CNN today, Democratic National Committee Chairman Terry McAuliffe disputed "The Miami Herald's" findings.

(BEGIN VIDEO CLIP)

TERRY MCAULIFFE, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: "The Miami Herald" was one county, and only counted the undercounts. "The Palm Beach Post" came out the other day and said that Al Gore had picked up 682 votes just in Palm Beach.

So, when all the votes are counted, Al Gore will have won the state by thousands of votes.

(END VIDEO CLIP)

SHAW: When INSIDE POLITICS returns, we'll hear from the campaign managers in election 2000. The view from the men and the women in the trenches about what did and did not work in the heat of political battle.

(COMMERCIAL BREAK)

WOODRUFF: You might call it the political version of Monday morning quarterbacking: the men and women who managed last year's presidential campaigns gathered on the same stage to talk about their campaign successes and failures.

And as you might expect, only one member of the panel was truly happy with the final result. Here's CNN Boston bureau chief Bill Delaney.

(BEGIN VIDEOTAPE)

BILL DELANEY, CNN BOSTON BUREAU CHIEF (voice-over): For the most part, bygoning bygones at Harvard University's Kennedy school of Government managers of campaigns for the presidency last year, two men, three women, who've gotten over it, gotten on with it, for the most part.

DONNA BRAZILE, GORE CAMPAIGN MANAGER: There's still a lot of raw emotions and a lot of hard feelings and a lot of -- and it won't end until we do take on real serious election reform in this country.

DELANEY: That glance to the right by Gore campaign boss Donna Brazile, in the direction of Karl Rove, President George W. Bush's chief campaign strategist.

BRAZILE: And I know that this is going to seem strange coming out of my mouth, I don't take the position that the Republican party tried to prevent people from voting. I take the position that we had -- we had inadequate voting machines, we had faulty voting machines, we had poll workers who didn't know what they were doing.

KARL ROVE, SENIOR WHITE HOUSE ADVISER: I agree with Donna. We ought to look for good lessons out of Florida.

DELANEY: Though Rove said problems transcend Florida.

ROVE: My personal favorite election story of this year is New Mexico, because on election night, Bush was 11,000 votes behind. And the next day, in Bernalillo county, they found that they'd failed to count a mere 55,000 votes.

Every election for the last 20 years, Bernalillo county has had similar major malfunctions in its election process, and yet people don't fix it.

DELANEY: Amid all the talk, a bit of body language -- Donna Brazile.

THERESA AMATO, RALPH NADER'S CAMPAIGN MANAGER: He wanted to get into the presidential debates...

DELANEY: Listening, sort of, to Theresa Amato, manager of the Ralph Nader campaign. Note here, she briefly goes to sleep, before adapting the classic lean-back-skeptically posture of someone put next to someone whose candidate helped cost her an office in the White House.

AMATO: ... media, you get ignored...

DELANEY: And then, Donna Brazile went back to sleep.

Warmer vibes between Karl Rove, who has that White House pass, and Gina Glantz of Bill Bradley's campaign.

GINA GLANTZ, BILL BRADLEY'S CAMPAIGN MANAGER: This is as close as I'm going to get to the White House, clearly. I'm happy to be here.

ROVE: Come on over for lunch.

GLANTZ: Thank you!

DELANEY: As for which candidate seemed to win the applause-o- meter, well, McCain's man, Rick Davis.

RICK DAVIS, JOHN MCCAIN'S CAMPAIGN MANAGER: I'm blessed by the fact that there are still people still willing to clap when you say "McCainia."

That was easy.

DELANEY: Amid from all, grace notes of that civility President Bush keeps talking about, especially on election reform agreement.

BRAZILE: ... Republicans, by the way...

UNIDENTIFIED FEMALE: I know, me too!

BRAZILE: I know, I just -- don't tell nobody.

UNIDENTIFIED FEMALE: All right.

DELANEY: After all, politicians not at each other's throats. What fun is that?

Bill Delaney, CNN, Boston.

(END VIDEOTAPE)

SHAW: What's in a name? The accomplishments of a pioneer who shares a name with the current commander in chief.

(COMMERCIAL BREAK) SHAW: President George W. Bush has earned a place in history as the nation's 43rd president. But the encyclopedias already have an entry for George W. Bush, a man who made his mark on the map of the United States as an African-American pioneer. Lilian Kim reports.

(BEGIN VIDEOTAPE)

LILIAN KIM, CNN CORRESPONDENT (voice-over): George W. Bush's presidency has yet to play out in the annals of American history. But another George W. Bush in another Washington has already made his mark in the history books.

George Washington Bush, a free black man from Missouri, led the first colony of American settlers to the shores of Puget Sound.

WINNIFRED OLSEN, HISTORIAN: Here was an organized American settlement on the Puget Sound. I always say that was the clincher to the fact that this all became a part of the United States and not Canada.

KIM: Could it be, that without Bush, Seattle, Washington, would instead be Seattle, Canada?

Well, according to historians, Bush did pave the way for other American pioneers to settle in what is now Washington state. The journey west began in 1844. Families like the Bushes wanted to settle in the Oregon territory, but laws there prohibited blacks from owning land. The Bushes then headed north along with several white families.

PROF. QUINTARD TAYLOR, UNIVERSITY OF WASHINGTON: All of these families decided they would move north in support of Bush or with him. He initiates a pattern of settlement, that would eventually help to establish Washington as a territory. Washington will have enough people to break away from Oregon as a territory, and once Washington is established as a territory, eventually it is placed on its way towards statehood.

KOPPEL: At Bush's homestead today, commercial development has taken over farmland, but a memorial stands in Bush's honor, a small tribute to a man who had a big part in creating the state of Washington.

Lilian Kim, CNN, Tumwater, Washington.

(END VIDEOTAPE)

SHAW: And we'll be right back.

(COMMERCIAL BREAK)

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

WOODRUFF: This programming note: EPA administrator Christie Whitman talks about the Bush budget and what she thinks about the new attorney general, John Ashcroft. That's tonight on "CROSSFIRE," starting at 7:30 p.m. Eastern.

I'm Judy Woodruff.

SHAW: And I'm Bernard Shaw. MONEYLINE is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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