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Inside Politics

President Bush Pitches His Budget Plan to State Legislators

Aired March 2, 2001 - 5:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JUDY WOODRUFF, CNN ANCHOR: The papers on the Clinton pardons: We'll read the fine print. We'll look beyond President Bush's public day and get insights from inside his administration. And later, our tribute to Bernie Shaw: a remarkable man and his remarkable career.

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

WOODRUFF: Thank you for joining us.

Former President Bill Clinton is heading to San Jose, California to appear at a fund-raiser for India earthquake victims. But here on the East Coast, the political aftershocks from his pardon of financier Marc Rich keep on coming.

After yesterday's House hearing on the matter, CNN's Eileen O'Connor has been piecing together the latest evidence and testimony to get a better sense of how the Rich pardon played out.

(BEGIN VIDEOTAPE)

EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): Documents released by congressional investigators show attorneys for fugitive financier Marc Rich considered applying directly to the White House for a pardon early last year.

On February 10, prosecutors in New York have refused to meet with Jack Quinn to discuss a plea bargain. Rich associate Avner Azulay, a former agent of the Israeli secret service, sends an e-mail to Bob Fink, Rich's lead attorney, saying: "The present impasse leaves us with only one other option: the unconventional approach which has not yet been tried."

Jack Quinn has testified that unconventional approach, a pardon petition, wasn't seriously pursued until the fall, but now concedes it might have been earlier.

JACK QUINN, MARC RICH ATTORNEY: It is entirely conceivable that there were conversations in which the notion of one day pursuing a pardon took place.

O'CONNOR: Yet on March 18, Azulay writes about an idea "to send DR" -- or Denise Rich -- "on a personal mission to No. 1, the president, with a well prepared script." On March 31, the Democratic National Committee records a $50,000 donation from Denise Rich. From then until early November, she donates nearly $300,000 to the party and some candidates. Still, even Republican investigators admit, while the money trail looks suspicious, it doesn't prove there was any deal between Rich and the president to grant a pardon in exchange for contributions.

Denise Rich had a long track record donating to Democratic causes, giving $399,000 between 1993 and 1998. She also pledged $450,000 to the Clinton library in 1998, a full two years before Marc Rich's lawyers ever consider a pardon application.

Lawmakers from both parties say what this boils down to may be a question of money meaning access, and access meaning the ability to influence. While not illegal, some say it is yet another compelling argument for campaign finance reform.

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: I'm absolutely convinced that anyone who has been following the pardon process will realize money was a major factor, and that campaign contributions played a big role in influencing decisions of our president, and that we need campaign finance reform.

O'CONNOR (on camera): The lack of a smoking gun means the political pressure is building to wrap up these congressional investigations, leaving it to the U.S. attorney in New York to find what, if any, criminal wrongdoing may be involved.

Eileen O'Connor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Of course, the Rich pardon is not the only one that has generated controversy. Hillary Rodham Clinton's brother Tony will be asked about his role in the pardon flap in an exclusive interview tonight on CNN's "LARRY KING LIVE." That's at 9:00 p.m. Eastern.

The House hearing on the Clinton pardons and the Seattle earthquake the day before stole some of the attention from President Bush's road trip to sell his proposed tax cut. Today, Mr. Bush was back at the White House, where he presided over the ceremonial swearing-in of three Cabinet members, including Energy Secretary Spence Abraham. Earlier, Mr. Bush used an appearance before the National Conference of State Legislators to make another pitch for his budget plan.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: While a lot of us up here talk about federal debt, one of my jobs is to make sure the nation stays focused on the debt that burdens the working folks in America. People have got a lot of credit card debt. And when you couple that with high energy prices, some of the people that you know are in a pinch. And we better do something about it. It's important for our economy to do something about that.

(END VIDEO CLIP)

WOODRUFF: CNN's Major Garrett has been traveling with the president this week and talking to administration officials. He joins us now.

Major, how does the White House expect this push for the president's tax cut plan to play out in the next few days?

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, the president has delivered his speech about the budget. The Democrats have come up with their alternative. And the White House now clearly understands where the battle lines have been drawn.

In the coming days, the president is going to make a few points emphatically clear to anyone who will listen, either here in Washington or across the country. First and foremost: There is only one number for the tax cut, $1.6 trillion. Senior administration officials say that the president will not budge from that number, and if he does, it will only be in the 11th hour of compromise talks, which will not play out until June and July. Until then, the one number -- and the only number from his perspective -- is $1.6 trillion.

Also, the president will make abundantly clear to Republicans in the Senate that he has no interest in putting a trigger on that tax cut. Some Republicans have talked about writing language in the tax cut that would say if surpluses that are projected do not materialize, then the tax cut should be suspended. The president will argue -- quite emphatically, administration officials say -- that that is the wrong policy, because he says only one thing -- only two things would lead to the surplus projections not materializing: too much congressional spending or an economy that needs a boost, in which case he says all the more reason to have a tax cut.

And on that question of spending, the president and his senior advisers are making abundantly clear they will not tolerate excessive Republican spending. And some administration officials, for the first time, are tossing around the "v" word, warning Republicans not to send bills that the president will veto because they spend too much -- Judy.

WOODRUFF: And, Major, what are you hearing about Social Security?

GARRETT: You know, during the campaign, the president faulted the Clinton administration for not dealing with the Social Security issues, saying, memorably, "They have not led; we will." Now, some asked the president -- or have asked the senior administration officials, rather -- if he was intending to lead on this issue, why did he suggest the appointment of a commission?

Well, senior administration officials say that commission is designed to create the framework for a Social Security reform package that will have personal savings account at the central element of it, and also work out some of the details that would come with that, and that he is going to bring that commission together quickly, have the report brought to him soon and bring that issue, believe it or not, to congressional Republicans, even though they have narrow majorities in the House and Senate in the politically volatile campaign year of 2002.

Senior administration officials say the president believes it is an important issue that needs to be debated, even though it will certainly be debated in the context of an election year -- Judy.

WOODRUFF: All right, Major Garrett reporting from the White House, thanks.

Well, President Bush is looking for all the support for his tax cut that he can get. But, in the end, one or two members of the divided Senate may have the final say.

CNN's Jonathan Karl looks at some of the Democrats Bush is hoping to sway.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The president of the United States!

JONATHAN KARL, CNN CORRESPONDENT (voice-over): When President Bush visited Nebraska this week, he was searching for a hidden Bush majority to get his tax cut through an evenly-divided U.S. Senate.

BUSH: The good thing about these two senators is this: I know I'm going to be able to count on them in the pinch.

(CHEERING)

KARL: He was talking about Nebraska's Chuck Hagel and Ben Nelson. Nelson is a Democrat, but Bush won his state in a 30-point landslide last year, sweeping every county. Nelson hasn't taken a position on the tax cut yet, but listen to what he had to say after President Bush's speech to Congress Tuesday night.

SEN. BEN NELSON (D), NEBRASKA: My philosophy sounds an awful lot like the president's. That's why I've supported many of the things that he's talking about.

KARL: On the face of it, Bush doesn't have much of a majority to work with at all, especially in the Senate. But when Republicans look at last year's electoral returns, they see something else: Although Bush lost the popular vote, he won 30 states to Al Gore's 20. That means there are 60 senators from Bush states: 20 of those Democrats, including six up for reelection next year.

REP. JOHN THUNE (R), SOUTH DAKOTA: I think it puts them in a very difficult spot. And if I'm a Democrat senator who is kind of on the bubble when it comes to running for reelection, and this vote comes up on the tax bill, I'm going to think long and hard about voting against it, because I think that there could be a price to pay politically two years from now.

KARL: Both of South Dakota's senators are Democrats. But it's a state Bush won in a 22-point landslide. Although the state's senior senator, Tom Daschle, is leading the fight against the tax cut, Senator Tim Johnson, who is up for reelection next year, is more reluctant to criticize a president popular with his constituents.

SEN. TIM JOHNSON (D), SOUTH DAKOTA: I'm not out there throwing rocks at President Bush. I thought his speech the other night was an excellent speech. I particularly appreciated the tenor of the speech, where I think he is trying to promote a level of civility. I think that the basic components of his tax cut actually are satisfactory.

KARL: But Bush can't count on Johnson yet.

JOHNSON: But I also was not sent to Washington to rubber-stamp anybody, that there are some ways that we can make this a still better plan.

KARL: To put pressure on Johnson, a conservative group featuring former presidential candidate Steve Forbes is launching a radio ad- campaign in South Dakota in favor of the tax cut. The group will also be running ads targeting Senator Mary Landrieu in Louisiana, Max Baucus in Montana and Max Cleland in Georgia, all Democrats up for reelection next year in states Bush won.

(END VIDEOTAPE)

KARL: But what comes around goes around. As Republicans target moderate Democrats for a vote on the Bush tax cut, they also fear losing moderate Republicans, especially from those in states in the Northeast, that voted overwhelmingly against George W. Bush -- Judy.

WOODRUFF: All right, Jon Karl. And a question, Jon: There's already been some action on the House side, in the Ways and Means Committee on the tax cut; how well did the president do there?

KARL: Well, the president did well there -- it passed; but it passed on a party-line vote. And Democrats are simply outraged by the way this bill is moving through the House of Representatives; Republicans over there are making no effort whatsoever to really pull in Democrats; they basically acknowledge that they have little hope of getting more than six and, at the very most, 12 Democrats to vote for the Bush tax cut. So over in the House of Representatives, this is moving along very much on a party-line vote.

WOODRUFF: And separately, Jon, you've picked up some information about maybe another Kennedy running for Congress?

KARL: Maybe another Kennedy or two, actually, Judy. Max Kennedy, who is the young -- who is the Son of Robert F. Kennedy, is considering a run for the seat that will be vacated by Joe Moakley. Max Kennedy, who is a teacher at Boston College, active with a group up there that teaches inner-city kids science, is considering to run. He met with Joe Moakley yesterday; he's now going on a vacation with his family and saying that he's going to think about it and make a decision sometime within the next couple of weeks.

Also, Mark Shriver is considering a run against Connie Morella. So you have the possibility, Judy, next year -- should both of these candidates actually run and win -- of seeing three nephews of the former President John F. Kennedy serving in the U.S. House of Representatives because, of course, we already have Patrick Kennedy serving there.

WOODRUFF: That may set some kind of record; all right, Jon Karl at the capitol, thanks.

And ahead on INSIDE POLITICS: the political debate over the census soon may be over. We will examine the political effect of the final count. And coming up at the bottom of the hour: a tribute to our friend and colleague, Bernie Shaw.

(BEGIN VIDEO CLIP)

WOLF BLITZER, CNN CORRESPONDENT: Long before I came to CNN, which is now almost 11 years ago, I had been a great admirer of Bernie Shaw. In fact, he was a role model in many respects -- not only a great journalist, but someone who can communicate effectively with a huge audience out there. I know that as important as all of that is, what's even more important, I've come to learn over these many years, he's a great human being and I'm going to miss him a lot. But I'm sure he's going to be back frequently -- I certainly hope so. Bernie, we love you.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I've had the privilege of knowing and being interviewed by Bernie Shaw for many years -- to my recollection, around 19 years now since I first came to the Congress of the United States. I cannot tell you if Bernie is a Republican, Democrat, Libertarian or vegetarian; I can only tell you that he's tough, he's smart, and a lot of us up here will miss the level of integrity that he brought to the profession.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WOODRUFF: Democrats and civil rights groups are facing a likely defeat in their campaign to have the census adjusted through a process called statistical sampling. The acting director of the census bureau yesterday recommended against the use of sampling to adjust last year's count. He said bureau experts have been unable to determine that sampling would make the final count more accurate for use in redistricting. The 2000 census is believed to have missed about 3 million people, including many minorities. The final word on sampling, though, rests with Commerce Secretary Don Evans, and he is expected to issue his decision next week.

Joining me now with more on the political strategies that underlie the census debate: CNN political analyst Charlie Cook with the "National Journal."

Charlie, first of all, a basic question: What is sampling?

CHARLES COOK, CNN POLITICAL ANALYST: What they do, is when they do -- they do the regular census once every 10 years, and then after the census is over they go back and they do a very, very -- a huge survey; in this case, 314,000 households nationwide. And they go visit every single one of those households -- something you could never do, you know, on a national census basis, to see how many people are in those, to see how close was the original census to reality.

WOODRUFF: And why would that benefit the Democrats?

COOK: Well Democrats usually -- in the census, minorities, low- income people tend to be counted at a lower rate -- harder to count than the population as a whole. And those people tend to be Democrats; so Democrats wanted this idea of sampling. But the thing is...

WOODRUFF: So how big a blow is this to the Democrats?

COOK: I don't think it's quite a big a blow to them as they think; 10 years ago, a lot of people didn't get -- a lot of minorities, a lot of low-income people didn't get counted.

And this time, in 1990 -- or 2000, Democrats were in the administration, they ran the Commerce Department, they ran the Census Bureau. And they moved heaven and earth -- they spent an enormous amount of money to make sure...

WOODRUFF: To count everyone.

COOK: Yes, to make sure that all these people got counted; all the -- a lot of civil rights groups, African-American, Hispanic groups really pushed in the community to get a good count. And as a result, we got a much, much better count than 10 years ago.

So the effect of sampling would mean less this time than it would have been 10 years ago.

WOODRUFF: But it still is going to help Republicans, presumably -- or not? I mean, what's your take on this?

COOK: Well, I think if they used sampling it would help Democrats a little bit; but because this was so much of a better census this time than 10 years ago, the incremental benefit would have been smaller.

WOODRUFF: So tell us how that would work? We know there's going to be redistricting; the redistricting is based on the census. Are there certain states, for example, where Democrats would have done a little bit better in terms of picking up new seats?

COOK: States with large African-American, Hispanic populations, large inner-city populations were hurt a little bit. But the Supreme Court ruled that you can't use sampling in the reapportionment process -- that is, saying how many congressional districts each state gets. But they left open whether it could be done within a state in terms of the redistricting, where the lines go within a state. They left that door open; the Census Bureau is saying, look, there wasn't enough of difference to make -- it wasn't a big difference between the two sets of numbers. We're just going to go with the basic numbers.

WOODRUFF: Now -- so what happened -- the census director's recommendation, we'll have the commerce secretary's decision next week; we presume he'll follow the advice of the Census Bureau. What is left to be decided? This isn't the end of the story, the states have decisions to make, right?

COOK: Well, no, the states are only going to get one set of numbers. I mean, as a matter of fact, this thing is over at this point.

Now, had the census director recommended one thing and the commerce secretary gone the other way, then there would have been a little bit of a give and take. But now that they're both singing from the same song sheet, I think the story is over.

Now the question is: Where do they put the lines now? But there's only going to be one set of numbers, and it's going to be the official census numbers -- no sampling.

WOODRUFF: And as you look at the official census number, without the sampling, which party's better off?

COOK: When you talk to the experts in each party that really know this stuff inside and out, what they tend to say is, if Republicans got every break in the world, they would pick up maybe seven, eight, nine seats. If Democrats got every break in the world, they would pick up two, three, or four seats; and the most likely outcome is something in between. Maybe Republicans picking up two, three, four seats through the redistricting process.

But the bottom line is, if I had a choice of seeing a map of the United States with all the districts for 2002 or knowing what George Bush's job approval rating would be in November of 2002, I'd rather know George Bush's job approval rating.

WOODRUFF: You'd rather look at the poll; all right, If Charlie Cook said it, it's gospel. Thanks, appreciate it Charlie.

"Political Play of the Week" is next here on INSIDE POLITICS, followed by an hour-long tribute to my friend and former co-anchor, Bernard Shaw.

(COMMERCIAL BREAK)

WOODRUFF: There is a very important job here in Washington that, when done well, requires a person to be heard, but not seen.

CNN senior political analyst Bill Schneider joins us now with more on the job and the latest person to do it well.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Judy, did you ever hear of Judson Welliver -- Judson Welliver? He was the first acknowledged presidential speechwriter. And he had the easiest job in the world. He wrote speeches for Calvin Coolidge, a president of famously few words.

Now, speechwriters are rarely acclaimed. But if one does his job right, he just might score the "Political Play of the Week."

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): George W. Bush is not always on good speaking terms with the English language.

BUSH: You teach a child to read, and he or her will be able to pass a literacy test.

SCHNEIDER: That sort of thing makes people nervous. Is this guy up to the job? Those doubts surfaced at President Bush's first full- fledged news conference last week, where his answers were sometimes confused.

BUSH: Sanctions that work are sanctions that when a -- the collective will of the region supports the policy, that we have a coalition of countries that agree with the policy set out by the United States.

SCHNEIDER: On the other hand, Bush's convention speech last year had a simple and direct eloquence.

(BEGIN VIDEO CLIP, AUGUST 3, 2000)

BUSH: When I act, you will know my reasons. And when I speak, you will know my heart.

(END VIDEO CLIP)

SCHNEIDER: Who gave Bush his suddenly polished voice?

BUSH: Mike -- and Mike Gerson on my team, and Karen Hughes have been working with me on the speech. Mike is the primary drafter.

SCHNEIDER: That's former journalist Michael Gerson, Bush's chief speechwriter during the campaign and now in the White House. A good speechwriter should be heard, but not seen. Gerson follows that rule. He was the principal drafter of Bush's inaugural speech, which was called by a former Democratic White House speechwriter, by far the best inaugural address in 40 years.

It had memorable cadences.

BUSH: And sometimes our differences run so deep, it seems we share a continent, but not a country.

SCHNEIDER: ... and rich imagery.

BUSH: And I can pledge our nation to a goal: When we see that wounded traveler on the road to Jericho, we will not pass to the other side. SCHNEIDER: President Bush needs speeches like that to reassure the voters he knows what he's doing -- especially this week, when he presented his controversial budget and tax plan -- in simple and compelling language.

BUSH: The people of America have been overcharged. And on their behalf, I am here asking for a refund.

(CHEERING)

SCHNEIDER: The sometimes language-impaired president came across as comfortable in his own skin.

BUSH: Some say my tax plan is too big. Others...

(APPLAUSE)

BUSH: Others say it's too small.

(APPLAUSE)

BUSH: I respectfully disagree.

(LAUGHTER)

BUSH: This plan is just right.

(APPLAUSE)

SCHNEIDER: A good speechwriter doesn't just put words in a president's mouth. He finds words that express what a president wants to say, because viewers can tell the genuine from the phony.

BUSH: Together we can share in the credit of making our country more prosperous and generous and just, and earn from our conscience and from our fellow citizens the highest possible praise: Well done, good and faithful servants.

SCHNEIDER: Well done, good and faithful speechwriter: the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: After years of slick, silver-tongued oratory, Americans are longing for straight talk. That was the name of John McCain's bus last year, and it made him a sensation. On his own, President Bush may not always talk straight. But with a little help, he can speak straight from the heart -- Judy.

WOODRUFF: All right, Bill Schneider, thanks very much.

And we want you to stick around, because, as I've been waiting all this week to say: Our tribute to Bernard Shaw is just minutes away.

Please stay with us. You won't want to miss it, as we salute our colleague and friend.

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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