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Inside Politics

President Bush Attempts to Speed Up Tax Cuts; How Much Does John McCain Have Invested in Campaign Finance Reform?

Aired March 16, 2001 - 5:00 p.m. ET


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

On this St. Patrick's eve, the dance over tax cuts: The president tries to speed things up.

On the brink of Senate debate, how much does Senator John McCain have invested in campaign finance reform? And our Bill Schneider sees green in the political "Play of the Week."

Now, Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

The debate begins at 1:00 p.m. on Monday, but high noon might be more fitting. The Senate's consideration of campaign finance reform is expected to be quite a showdown, even for, or perhaps especially for, the veteran warrior for the cause: John McCain.

Our Jonathan Karl has the latest on how McCain, other senators, and the White House are girding for what's ahead.


JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In advance of the battle on the Senate floor, John McCain and his Democratic brother-in-arms Russ Feingold made one more pitch to the grassroots for their effort to limit the influence of big money in politics.

SEN. RUSS FEINGOLD (D), WISCONSIN: And it infects every institution in our government. We saw it in the Lincoln bedroom. We saw it in the halls of Congress. We saw it at the Democratic National Convention. We saw it at the Republican National Convention -- soft money washing everywhere, even to the point where it infected the sacred pardon power of the president of the United States. It infects everything. It destroys everything.

KARL: But back in Washington, the Senate's top Democrat predicted a bruising fight over the issue.

SEN. TOM DASCHLE (D-SD), SENATE MINORITY LEADER: This is going to be a very, very tough fight. This is going to be a fight for the real soul of our political system for the next generation.

KARL: And Republican leader Trent Lott said limits on political contributions are ultimately doomed.

SEN. TRENT LOTT (R-MS), SENATE MAJORITY LEADER: In a free enterprise system, the system has a way of addressing the needs. You put a cap here, it will come out over here. People have to have a way to get their message out.

KARL: The McCain-Feingold-Cochran bill would ban soft money, the unlimited contributions given to political parties, restrict political ads run by independent groups within 60 days of a general election, and require greater disclosure.

SEN. MITCH MCCONNELL (R), KENTUCKY: The bill is replete with unconstitutional measures that seek to quite the voices of critics of members of Congress. It fundamentally destroys the national political parties and their ability to be involved in state races.

KARL: McConnell will be leading the charge against McCain- Feingold. He finds much more to like in a statement of principles put forth by President Bush. It includes support for raising the $1,000 limit on hard money contributions given directly to candidates, banning soft money from corporations and unions, but not from individuals, paycheck protection, which would require unions to get permission from their membership before spending on political activity and a similar provision that would require corporations to get permission from their shareholders.

The White House has also praised a proposal by Senator Chuck Hagel that would limit soft money contributions to $60,000 per year from unions, corporations and individuals.

FEINGOLD: The Hagel bill is the opposite of reform. The Hagel bill is literally taking this system, putting the stamp of approval on it and making sure it lives forever.

KARL: But Senator Hagel's bill has widespread Republican support and three Democratic co-sponsors, making it perhaps the greatest threat to McCain-Feingold.


KARL: The debate on the Senate floor is expected to be something of a free-for-all, where about the only ground rule is that there will be three hours of debate per amendment, but no ground rules as to how many amendments can be offered, or even who gets to offer amendments.

As one top Senate aide said, this will be the Senate's version of the Wild West, with a shoot-out every three hours -- Judy.

WOODRUFF: Jon, that's a pretty good analogy.

Jon, yesterday, when I talked to Senator McCain, he said that the Hagel bill -- at least as of yesterday -- did not then have the support of a single Republican who had said that he was supporting -- he or she was supporting McCain. Is that still the case?

KARL: As far as I know, that is still the case. But you know, the Hagel bill does have the support of one Democrat that is supporting McCain-Feingold, and that's Mary Landrieu. Mary Landrieu is a co-sponsor of both bills.

Although what she has said is that she will not go along with any effort to replace McCain-Feingold with Hagel. In other words, she is co-sponsoring both bills, but she prefers McCain-Feingold. But as of now, any of those small band of Republicans who are supporting McCain- Feingold, as far as what I have heard, are still solidly with McCain- Feingold as opposed to Hagel.

WOODRUFF: All right.

KARL: But remember, Judy, the overwhelming majority of Republicans here are not supportive of McCain-Feingold. It's a relatively small group he has.

WOODRUFF: Right. It's important to keep that in perspective. All right, Jonathan Karl, we'll be talking to you a little later in this hour for our roundtable. Thanks a lot.

Senator McCain said today that he hopes to emerge from the campaign finance reform debate with continued, or even enhanced, political influence. As our senior political correspondent Candy Crowley reminds us, McCain has a tremendous stake in this issue and how it plays out.


CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Somewhere between his brush with the Keating Five scandal and his explosive bid for the presidency, John McCain and his cause have become nearly indistinguishable.

SEN. JOHN MCCAIN (R), ARIZONA: Millions of Americans have rallied to our banner, and their support not just honors me, but has ignited the cause of reform.

CROWLEY: Armed with 5.4 million primary votes, the senator from Arizona is looking at his best chance of passing campaign finance reform in more than a decade.

DASCHLE: Well, this is the whole ball game for John McCain legislatively. I believe that there is no one who is more closely identified with an issue than John McCain is to campaign reform, and for good reason. He has invested an inordinate amount of his personal credibility, work and effort to getting to this point.

CROWLEY: But best chance doesn't mean certain chance. McCain faces long-time Republican opposition, new grumbling among some Democrats who can no longer count on Republicans to block the bill, and in the Oval Office, where the buck and the bills stop. The president seems certain to veto McCain-Feingold as it is currently written, a difference of opinion spiced by a prickly relationship that seems to seethe behind the smiles.

So what happens to the champion if the cause fails?

MCCAIN: My friends, I did not get into this things for stature or prestige. Anybody who thought that anybody should get into this issue because they wanted to enhance their own image -- there is a lot of other ways to do that.

CROWLEY: In fact, a major defeat for McCain is unlikely to tarnish his star power among the faithful. The maverick-against-the- odds persona is part of the appeal.

But within Congress itself, where McCain's relationships are complicated, a loss could diminish some of the political power McCain brought with him off the campaign trail. But in the end, with or without campaign finance reform, some politicos believe McCain will still be McCain, a man not likely to sit still as yesterday's news.

CHARLES COOK, "NATIONAL JOURNAL": I think if McCain-Feingold goes down, Senator McCain will still be a force in the Senate. He can get media attention whenever he wants it. He's -- I mean, he's got a knack for identifying hot-button issues and jumping on them. I men, he'll be a force, but obviously it will be a blow if his signature issue goes down in flames.


CROWLEY: In truth, McCain seems to thrive most when things are at their worst, to be at his best when the odds are against him.

For McCain, losing is not failing, it's just another call to arms. Candy Crowley, CNN, Washington.

WOODRUFF: And Candy will also be joining our roundtable a little later in this hour.

For President Bush, campaign finance reform is not a top priority, but tax cuts certainly are. Our White House correspondent Major Garrett has the latest on Mr. Bush's tax cut plan, and some tweaking that may be in the works -- Major.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Yes, Judy, with all the talk about the direction of the U.S. economy, there is a good deal of conversation on Capitol Hill that the Bush tax cut, as currently constructed, may not provide an adequate stimulus to get that economy back on track.

White House has heard those concerns form Capitol Hill, and Treasury Secretary Paul O'Neill and the president's top economic adviser, Larry Lindsey, have encouraged members of the Senate in particular to look at ways of perhaps accelerating the effect of that Bush tax cut. They are not moving off of the big number, though, 1.6 trillion over 10 years, but they told senators: if you can find a way to put more of the tax cut in that first year, while still keeping it that 1.6 trillion number, we'll be just fine with that. That legislative process will continue, as well the negotiations between the White House and the other end of Pennsylvania avenue. As for today, the president found another way to talk about tax cuts, in the contexts of the benefits that would derive to members of the small business community. He invited many here to the White House and said that his tax cut, though some people would argue disproportionately favors the wealthy, would favor the small businesses as well.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The tax relief plan will increase cash flow of small businesses, giving folks more resources to buy more equipment, and as importantly, higher more workers. This tax relief plan has -- gives people a chance from both political parties to send a clear signal that we are allies here in Washington of the small business owner, not adversaries.


GARRETT: White House is trying to find allies wherever it can. Latching onto the small business communities is another part of the White House strategy to find as many different folks across the country to send e-mails, letters and phone calls to Congress.

The president asked the small business owners to do that once they got back home, and the small business argument is also part of the White House strategy to tell the Democrats, who were critical that this tax cut in their view disproportionately affects the wealthy, hey, many small business owners don't file corporate income taxes, they file personal income taxes, they pay that higher rate. You lower their rates, they'll be able to hire more workers -- Judy.

WOODRUFF: So, Major, this is a change in tactics on the part of the White House, to reach out to members of the Congress, to the Senate, to come up with suggestions?

GARRETT: Well, Judy, it's important to remember what the president always said, and his top economic advisers have said, over and over again, the president will put a proposal before Congress. The president will listen to the members of Congress, both in the House and the Senate.

And, as I can tell you, many people in the White House are sort of astonished at how this debate swirls around them. I mean, over the weekend there was talk that possibly the White House was going to compromise and may have to back off some of the estate tax provisions, maybe back off the income tax rates -- the White House said, absolutely not, we're still sticking with that $1.6 trillion number and all the things we've laid before Congress.

Now, a mere four days later, members of Congress are saying, you know, maybe we need to accelerate this tax cut, push more of it into that first year. The White House is saying look, you guys write the bill, we'll tell you what the parameters are. The parameters are $1.6 trillion over 10 years with the rate cuts the president's laid before you; we'll see what the final details are, we'll talk to you about them then. But you work your way with it now and we'll let you proceed -- Judy.

WOODRUFF: All right; Major Garrett at the White House, thanks very much.

The Environmental Protection Agency Chief Christie Whitman said today that her relationship with President Bush has, quote, "not been strained" by his about-face on limiting carbon dioxide emissions. In her first public comments on the matter, Whitman told a group of student leaders that she was not left out of the loop when Mr. Bush was making the decision that was announced on Tuesday.


CHRISTIE WHITMAN, EPA ADMINISTRATOR: He acknowledges that this is an issue with which we need to deal, and that he is ready and willing to work with our allies.

QUESTION: So you were taken by surprise, were you not?

WHITMAN: No, I was part of the discussion; I knew what was going to happen.

QUESTION: Has this strained the relationship between the two of you?

WHITMAN: Not at all; not at all. I was with the president on Tuesday, obviously, and I'm going over to the White House after this. We're fine.

QUESTION: Is there any validity to reports that you might not finish out your whole term?

WHITMAN: Well, that's four -- three years from now, I have no clue what's going to happen in the next few, but not because of this issue, not now.


WOODRUFF: However, Whitman did acknowledge that she was unaware that the president was reconsidering his campaign promise when she assured European environmental leaders two weeks ago that the administration would curtail C02 emissions.

Still ahead on INSIDE POLITICS: putting a face on a political issue, Ron Brownstein examines the plight of America's uninsured.


WOODRUFF: It is a problem Washington has grappled with for years: how to provide health care for America's working poor. Prosperity doesn't always help; as more and more poor Americans moved off welfare through the 1990s they became ineligible for Medicaid. It is a boom-time irony: get a job, lose your health insurance. Well, what to do about it is a matter of hot debate here in Washington. Senator Ted Kennedy plans a bill to cover poor children and their parents under the federal, so-called CHIPs Program. The president provides his solution in his new tax plan.

For some perspective, we sent Ron Brownstein of "The Los Angeles Times" to a south Bronx community health care center -- ground zero for the health care debate.


DR. WANDA MCCOY, MORRIS HEIGHTS HEALTH CENTER: Stick out your tongue, say, ah.

RON BROWNSTEIN, CNN CORRESPONDENT (voice-over): If all 42 million Americans without health insurance gathered in one place, they'd instantly become the largest state in the nation, bigger than Texas and New York combined.

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: This card will give comprehensive coverage.

BROWNSTEIN: Since the failure of Bill Clinton's national health care plan in 1994, the problems of the uninsured have faded from the headlines. But the uninsured themselves haven't vanished. Instead, they turn up, usually with their children in tow, on the doorstep of places like the Morris Heights Health Center in the south Bronx.

MCCOY: We see over 400 people a day here; a lot of children, a lot of women and families. We've had a lot of immigration to this area over the past several years. Morris Heights was a neighborhood of about 28,000 back when we started, and now we've got over 75,000 residents in this area.

BROWNSTEIN (on camera): Roughly what percentage of the people who come in here will have health insurance from their employer -- from work?

MCCOY: Maybe 50 percent. Over the years, we have seen changes; and some of the good changes are that the neighborhood has improved, there's been lots of development. But there are also more people who are working and, unfortunately, they're the working poor.

BROWNSTEIN: So more people are working than there were, but fewer people have health care?

MCCOY: Absolutely.

BROWNSTEIN: Even as they've gone to work?

MCCOY: Even as they've gone to work, because most of the jobs that they have do not offer health insurance.

BROWNSTEIN (voice-over): For a decade Dr. McCoy has faced the challenge of providing care to the uninsured in this gritty corner of the south Bronx. That's given her a ground-level perspective on the health care wars in Washington.

(on camera): Based on your experience here, what would be the most effective way to cover more of the uninsured? MCCOY: Actually, I believe that the infrastructure already exists for uninsured patients, and most people are not aware the community health care system has been in existence for over 30 years and we take care of most of the nation's uninsured. So if that system were to be shored up and expanded, we would be able to take care of most, if not all, of the nation's uninsured.

BROWNSTEIN: Well, let's talk about how you might shore it up. In '97, Congress approved the Children's Health Insurance Program, providing coverage for children of the working poor. A lot of the people who come in here are covered under that program. How has it worked in practice?

MCCOY: It's worked beautifully. Programs like that are what we need, and we need expansion of those. There are thousands of children who are now covered who come in for health care who were not covered before who are the working poor.

BROWNSTEIN: One of the ideas that's being kicked around, one set of proposals for moving forward, would be expanding eligibility from the children of working poor families, to the parents, to the adults -- in effect, CHIPs for adults. Would that be a next step that makes sense in your view?

MCCOY: Absolutely; and I believe that New York state is doing that as well. If we could cover the parents of these children, then we would certainly get more of our uninsured in to be cared for.

BROWNSTEIN: Well, would it bring in more of the children as well? I mean, some people argue that if you cover the parents they're more likely to sign up the kids; and that's been one of the biggest problems, is getting the kids signed up in the first place.

MCCOY: Absolutely; once you get the kids signed up, you have the parents there and you have the opportunity to get them in as well.

BROWNSTEIN: So one way of going ahead would be expanding CHIPs to adults. Another option, the one the president prefers at the moment, is a tax credit for the uninsured. He wants to give uninsured low-income families $2,000 a year in a tax credit to buy health insurance. How would that work, in your view?

MCCOY: I'm not sure that that would work; $2,000 is really not enough for health care insurance for a family. The average health care insurance, especially if you include dental, which is always very important, is upwards of $400 a month for a family. $2,000 for a family is not enough.

BROWNSTEIN: Well, could a family make part of the payment themselves? I mean, could they cover the difference themselves?

MCCOY: They -- I don't think so. I think that would be very difficult, I think that would be confusing and I think that that would deter people from seeking care.

BROWNSTEIN: All of these ideas we're talking about, all of them are incremental steps, a step-by-step approach. None of them are a sweeping plan that would provide health care to all Americans, as President Clinton proposed to do in 1994.

Do you think it makes more sense to move in this step-by-step approach, or would it be better to try to cover everyone in one fell swoop?

MCCOY: I think we saw the failure of trying to cover everyone with one fell swoop. And I would rather see us continue on what we've done with CHIPs, build on that foundation, and move forward.

BROWNSTEIN: One fell swoop kind of fell off a cliff, huh?

MCCOY: Yes, and I think it's gone.


WOODRUFF: All right; Ron Brownstein going to ground zero when it comes to looking at better health care coverage in this country.

Well, there's much more to come on INSIDE POLITICS. Straight ahead: the political effect of foot and mouth disease.


JENNIFER ECCLESTON, CNN CORRESPONDENT: Many farmers and local leaders believe the existing restrictions on movement would result in the virtual disenfranchisement of rural voters. They want elections postponed until the outbreak is under control.


WOODRUFF: How the British government is handling the outbreak, and how the disease is affecting life on the farm.

And later:


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I'm concerned that a lot of Americans' portfolios have been affected.


WOODRUFF: The weeklong market decline and its effect on the Bush tax cut plan: does a market slide help the White House cause? Some possible answers in our weekly political roundtable.


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

The stock market ended the week much the way it started -- with big losses and investors looking for help. The Dow and Nasdaq markets started off the day gaining ground, but quickly lost momentum. The Dow lost more than 207 points for the day. This was also the largest one-week point loss ever for the Dow. The Nasdaq lost nearly 50 points today. CNN will have more on the market slide on the "MONEYLINE NEWS HOUR." That's at 6:30 p.m. Eastern, right after INSIDE POLITICS.

The Army says that it has worked out its fashion flap over berets by granting its elite Rangers their own distinctive color. Members of the unit became outraged with the October decision to give the Army's rank and file black berets. They have been a Rangers symbol for decades. Well, today the Army chief of staff announced that their beret color will change to tan. He says all of the uniform revisions are meant to signal major changes underway in the Army.


GEN. ERIC SHINSEKI, ARMY CHIEF OF STAFF: As we looked at our transformation of the entire institution, we thought it important to have a symbolic and a visible demonstration that this Army was prepared for change and undertaking it.


WOODRUFF: General Eric Shinseki.

In a separate controversy, members of Congress say they are outraged that companies outside the United States have been contracted to make more than half of the new berets.

A hijacking has ended in Saudi Arabia with a rescue operation by the Saudi military. The drama played out in the holy city Medina, where the Russian passenger plane was sitting on a tarmac. Saudi commandos stormed the plane today, freeing more than 100 hostages. Three people were killed in the raid: a flight attendant, a Turkish passenger and a Chechen hijacker. The surviving air pirates all are in custody.

A federal appeals court ruled today that Ohio can keep its motto, quote, "With God, all things are possible." Three lower court judges have ruled the Bible phrase violated the U.S. Constitution as an endorsement of religion. Well, today's ruling says that Ohio may continue to use the motto, as long as it does not attribute it as the words of Christ.

There's still no verdict in the Sean "Puffy" Combs case. This is day three for jury deliberations. The jurors did ask for testimony to be read back to them about two hours ago. Combs faces up to 15 years in prison if he is convicted on all charges.

All systems are go for the scheduled decent of the Mir space station. Today Russian ground controllers did tests on a backup to the steering system that is to guide Mir to earth. If all goes as planned, Mir's controlled descent will end midweek in the South Pacific.

And next on INSIDE POLITICS: the struggle to contain foot and mouth disease. We'll update the political response to Britain's agricultural crisis.


WOODRUFF: And now our weekly political roundtable. And today, some familiar faces from CNN: our Washington bureau chief Frank Sesno, senior political correspondent Candy Crowley and our congressional correspondent Jonathan Karl. Welcome, all three.

A lot of economic news this whole week. We're hearing some bad things about the economy today. The markets have been moving down all week, they moved down again today. What are your sources, the people you talk to, and I know you all talk to a lot of folks in this city, about how the president is doing in terms of his perceived management of the economy -- Frank.

FRANK SESNO, CNN WASHINGTON BUREAU CHIEF: Well, what I'm hearing -- and I think -- and I suspect what you are hearing as well -- is that this is increasingly being laid at the feet of George W. Bush, that this is now -- at least politically speaking -- Bush's economy.

Some of the overhang -- whether it's volatility in the market, the downturn in the market, things that are happening overseas -- may well have their roots in previous years. But it's his now to manage. And what we are going to hearing, Judy, from Democrats, I am told, by Democrats is the "l" word -- no, not "liberal," but "layoffs."

And what is this president going to do about layoffs?

WOODRUFF: If that's the case, Candy, what is the White House saying about all that?

CROWLEY: Well, it strikes me as interesting that, with the Democrats now saying, "OK, what is this president going to do about layoffs," and these are the same Democrats that are saying that he's talking down the economy.

So you either have to buy into the fact that the economy is beginning to sink, or you can attack the president for saying that it's beginning to sink. But you can't do both. Look, I had someone say to me: "It's a little like old age: The economy is not for the faint of heart," that, basically, we've been spoiled over the last eight years. And they think what's problematic is not what's actually going on, but the perception of it.

You saw a lot of things in the sort of the post-Cheney heart problems about: Who is in charge here? Who's in charge? And there is a feeling among Republicans that he does need to sort of step out there and show us some of what he is thinking, what the Treasury secretary is thinking about a number of economic problems.

KARL: You have a real blame game going on here on Capitol Hill. I mean, we had a rather extraordinary press conference yesterday with Richard Gephardt and Tom Daschle coming out and essentially laying the blame at the president's feet, actually coming out with charts saying: This is when the president or the vice president said something bad about the economy, used the "r" word, talked about recession, and here's how consumer confidence immediately went down.

Well, Republicans today are circulating on Capitol Hill a statement made by Congressman Gephardt earlier in January where he used the "r" word. Remember, Gephardt came out in January and said: Hey, we may be headed towards a recession. Perhaps the tax cuts -- we Democrats should be thinking about bigger tax cuts than we had earlier thought about.

So you have a significant blame game going on here even before you get to talking about possible solutions.

SESNO: And what they are going to do, and what they are already doing is, they're tying it right back to the tax cut. They're saying that if you look at this budget, if you look at this tax cut -- this is what the Democrats are going to try to say, anyway -- this is rich man's tax cut; it's a rich man's budget.

Where is the increase in unemployment insurance? Where is the job training? -- sort of traditional Democrat harbors at times of recession.

WOODRUFF: But, generally speaking, Candy -- I mean, psychologically, anyway -- if you are heading into a downturn, tax cuts sound good, don't they? And isn't that the White House banking on that?

CROWLEY: Absolutely that's what they're banking on, is that -- I mean, you can play this -- you know, the politics of the economy cut both ways. Yes, you can -- and I think they are going to cut along very traditional paths.

If Frank says: Look, the Democrats going to come and say: What about insurance, you know, unemployment insurance? And the Republicans and George Bush already has come out and said: Well, this is all the more reason why we need not just the tax cut that I've talked about -- but now we're hearing rumblings of greater tax cuts.

SESNO: And there's work on that going on, Judy, we're told, on the Hill: work to get Democrats and Republicans together among some Republicans senators to try to get this thing both accelerated -- the process accelerated -- remember, it has bogged down for a couple of weeks because of this...

WOODRUFF: Get the tax cuts enacted faster.

SESNO: To get them enacted faster, and get -- to get more dollars back to people more quicker.

WOODRUFF: And, Jon, you're talking to people on the Hill about the tax cut. Of course, you could say, on the one hand, they're all over the map. But do you see anything coalescing there around?

KARL: Well, you have a couple of very interesting things going on right now. One is the Republican effort to try to peel off one more Democrat to support the president's tax plan. And they are zeroed in right now on a single on... WOODRUFF: In addition to Zell Miller.

KARL: Well, they've got Zell Miller. They are trying to get one more defector. And they are zeroing in right now most intensely on Ben Nelson, the new freshman Democrat of Nebraska. Phil Gramm is the liaison for the White House here. Phil Gramm has become like Nelson's Siamese twin. He's been talking to him continuously about the tax cut.

Nelson is generally in favor of the tax cut. He's got this idea for something called a circuit breaker, kind of like the trigger we've been talking about, but a little less severe, less mandatory. It would actually keep spending down if the surpluses don't actually materialize. But they really believe that Ben Nelson, sometime over the couple of weeks, could be the next Democratic defection.

WOODRUFF: Why it is so important for them to peel off another Democrat? They are half the Senate already.

KARL: Well, you know, it's simple math. They only have 50 Republicans. And you already have at least two that have said outright that they do not support the Republicans' plan. And you have about three or four others Republicans that are wavering. So they need to show some momentum on the other side.

WOODRUFF: But we're still a couple of months away, at least what I'm hearing from dealing with this.

KARL: Well, you could have a vote on the budget by April, by next month. And that will be the first test, is: What's in that budget? How much room did they leave in the budget for a tax cut?

SESNO: Well, and as I said, Judy, there are these efforts to try to accelerate this process. There is great concern, both politically and economically, at what's happening in the stock market, at what's happening with Japan's deflation, at what's happening with oil prices and oil production. And in Europe now, even this foot-and-mouth, which could have an adverse impact on the economy of Europe -- this is an interconnected world.

And so these efforts to accelerate all of these things have not just a political dimension, but they have a real economic dimension in terms of turnings things around.

WOODRUFF: All right, Frank and Candy and Jon, we want you all to stay right where you are.

When our roundtable continues, we are going to look at the forces arrayed in opposition to John McCain's campaign finance reform effort. Who are they? And will they succeed in blocking the proposal?

INSIDE POLITICS will be right back.


(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), ARIZONA: Senator Fiengold and I are approaching this entire situation with optimism. That means that we believe that we can work out an agreement with the White House, just as we can work out an agreement with Senator Hagel, who is one of my best friends, just as we can work with our friends in the House.

So I'm hopeful that we can work out a bill that passes through the Senate, but then we begin serious negotiations with the White House so we can give a bill the president can sign.


WOODRUFF: Senator John McCain expressing his positive view of the future of campaign finance reform. But does he have a chance?

Back now to our roundtable: Frank Sesno: Candy Crowley and Jonathan Karl.

Candy, he's sounding optimistic there. But there are all sorts of people coming out against him from the right, from the left.

CROWLEY: And optimistic about -- I mean, what are we -- let's define our terms here. If he's talking about the bill as it's currently written, I think he's whistling something here.

You know, they'll get something. I don't think this Senate can afford to do -- I mean, there is the Armageddon scenario that it just goes down in flames because they -- you know, they just can't reach agreement on anything. And the amendments -- you know, it's amended to death, that kind of thing. I think, in the end, they will get something. But what they want is a ban on soft money. I mean, that's what Russ Feingold and John McCain say is there bottom line. And that just seems to me a nonstarter at the White House.

WOODRUFF: Jonathan, you were reporting earlier in the program about the Hagel-Landrieu bill and how it is pulling in a lot of Republicans, not so much the ones who McCain was counting on, but these are people he might have hoped to persuade.

KARL: Well, what the real critics of campaign finance reform -- the McCain approachers, hope is that this Hagel bill will offer some cover for Republicans who think they have to vote for something that is called reform, but won't necessarily fundamentally change the system, still preserve soft money.

So that's the approach there. But they're -- the feeling is that there are certainly not 50 votes right now or 51 votes for the Hagel approach. And this going to go -- there's another scenario, Candy. And that is that something -- that McCain is able to fend off most of these amendments except for an increase in the hard money, which will almost certainly pass. And you get something down to the White House that leaves the president with a choice.

What does he do? He has something essentially along the lines of McCain-Fiengold, with an increase in the hard-money limits. What does the president do? And that's... WOODRUFF: But with a ban on soft money?

KARL: Yes. And what does he do?


SESNO: The last place they want to be. But this is being framed -- and we're hearing it from all sides -- and it's an important to keep in mind, is: What is free speech all about?

And the fact is that, since there was a town crier had to jump on a horse to go to village square, you need a little bit of money -- or maybe a lot of money -- to make your case. And then to the extent that opponents of campaign finance get cast that way, as opponents, what they're trying to do is say: Wait a minute. What we're really try to do is make sure that people have an opportunity to speak. And the fact that it costs money for a billboard or a TV ad or whatever else -- whatever else it may be -- but know who is speaking. So they focus on disclosure: Who is doing the paying for what?


WOODRUFF: I was just going to say: Isn't a lot of this, though, on how it is sold and how it's described as it comes out in the Senate debate, because McCain wants it to look like a clear choice between black and white? And what the Hagel bill is doing, it seems to me, is fuzzing it up a little bit.

KARL: Well, you know, and the critics really see the Supreme Court, on Frank's point of free speech, as the last line of defense here. If you looked at the principles that the White House set forth, one that didn't really get much attention was this nonseverability. In other words, if any aspect of this bill, if it were passed, were challenged in court and declared unconstitutional, the whole bill would be thrown out.

And they really believe that they've got a First Amendment issue here. And that First Amendment issue would probably apply also to Hagel because Hagel puts limits on the same soft money.

WOODRUFF: Candy, how strongly does this president feel about this issue?

CROWLEY: Well, you know, I think it depends on -- I mean, he feels strongly about paycheck protection, which is allowing union members to say yea or nay when the union wants to use their dues for political purposes. This is -- now, this is the nonstarter, you know, on the Hill.

My feeling is that this president feels strongly enough about it. But it is a dilemma if he gets what Jonathan is talking about, because then he stands in the way. Now, the other thing that they have going for them is, despite John McCain's vast popularity in the primaries, this was about the man, a maverick, and that kind of thing. It was not about, all the polls showed us, campaign finance reform.

And if it's a political calculation...

WOODRUFF: But John McCain says it was.

CROWLEY: Well, I know he does. And...


CROWLEY: And because that's his thing. I mean, they're -- it's inseparable: the champion and the cause. But the fact of the matter is that the political calculation has always been: There's just not this hue and cry specifically for campaign finance reform.

SESNO: He has got another problem, John McCain does. And that is that there's a great deal of resentment toward him personally and politically. And at a time when the markets have been volatile, as they have been -- down another 200 points today, the Dow -- there are senators who are saying: You know, we should not be sitting here talking about campaign finance. We should dealing with tax cuts and the budget and things that fix this economy.

So there's some impatience on sort of the broader sense of the role of this issue and the one that John McCain is playing with it.

WOODRUFF: You know, Jonathan, you're -- again, you are talking to these people all day long every day of the week. How do they see this playing out?

KARL: Well...

WOODRUFF: Is it a jump ball? I mean, is it completely up for grabs?

KARL: It's a classic jump ball, Judy. This is -- usually, by the time a piece of legislation gets to the Senate to floor, there are some ground rules. They have what they call a unanimous consent agreement. They've got how they're going to proceed.

In this case, the only rule that they have laid out, essentially, is that there will be three hours of debate per amendment. That's about it. So there are no limits on the number of amendments. There are no formula. There is no procedure in place for who gets to offer amendments. It's whoever gets recognized by the chair. Nobody knows how this is going to play out.

WOODRUFF: And which are going to be the votes that determine the outcome? I mean, are we looking at some Democrats and some Republicans -- mostly Democrats -- whose votes are unknown at this point? I mean, what -- what should we be keeping our eyes on?

KARL: Well, be keeping your eyes on some of those moderate Democrats that we have seemed to look at for every issue. Mary Landrieu is a very interesting case. She is a cosponsor of both the Hagel bill and the McCain bill, although she says she prefers McCain. She's a cosponsor of both.

Ben Nelson -- also we talked about on tax cuts -- he is another Democratic cosponsor of Hagel. Not surprising they're both from Nebraska. And, obviously, John Breaux playing the role of the Democratic maverick, as ever, on this.

WOODRUFF: Before it's all over, we'll all be experts on soft money, hard money.

SESNO: And credit cards.

WOODRUFF: And credit cards.


WOODRUFF: Frank Sesno, Candy Crowley, Jonathan Karl, thank you. Great to see you soon. Thanks very much. We'll see you very soon in this same place.

Coming up at the top of the hour on INSIDE POLITICS, President Bush and the Irish: how the new president's approach to Northern Island peace may differ from his predecessor.

And, later, our Bill Schneider explains what carbon dioxide has to do with the "Political Play of the Week."



BUSH: Mr. Prime Minister, America is called -- proud to call Ireland a friend, not just on St. Patrick's Day, but on every day.


WOODRUFF: The policy behind the gestures: How will President Bush's approach to Ireland compare with Bill Clinton's? In the battle over campaign finance reform, why do some accuse Hillary Rodham Clinton of being a soft money queen? And politicians, alleged payoffs, and videotape: the scandal rocking India.

Welcome back to INSIDE POLITICS. At the White House today, it all looked so familiar, down to the shamrocks. But when President Bush met with the Irish prime minister on this eve of St. Patrick's Day, many observers were looking for differences. Some have been wondering whether Mr. Bush's approach toward the Northern Ireland peace process will differ from his predecessors -- that story from our White House correspondent Kelly Wallace.


KELLY WALLACE, CNN CORRESPONDENT (voice-over): It's an annual tradition, but a first for this president: receiving a bowl of St. Patrick's shamrocks from the Irish prime minister and then pledging to support the Northern Ireland peace process.

BUSH: I assured him, and will continue do so, that the United States stands ready to help in any way that the governments involved need. WALLACE: Similar words to those of former President Bill Clinton during his first months in office.


WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I am more than willing to do anything I can that will be a constructive step.


WALLACE: But the next year, the Irish-American president took a more hands-on approach, granting a controversial visa to the outlawed leader of the political wing of the IRA, Gerry Adams. Later, Mr. Clinton named former Senator George Mitchell a special envoy to the region and helped broker the breakthrough 1998 Good Friday peace deal.

REP. PETER KING (R), NEW YORK: I don't expect President Bush to be on the phone all night the way President Clinton was. But I do expect the full weight of the Bush administration -- whether it's President Bush or Secretary of State Colin Powell -- are going to stand behind the peace process.

WALLACE: Mr. Bush's words and his actions over the past two days, senior aides say, were designed to put to rest any doubts he would not make the peace process a priority as much as his predecessor did. Observers say it was also important domestically for the president to show he would pick up where the Clinton administration left off.

LEE HAMILTON, WOODROW WILSON CENTER: ... Any American president is going to have to be heavily involved in Ireland. There is simply too much interest in this country in the Irish question for a president to ignore it.


WALLACE: And The Bush administration maintains the best hope for success is for the parties to negotiate their differences themselves. Still, Mr. Bush has named a point person to the peace process and has made it clear to the leaders he is just a phone call away -- Judy?

WOODRUFF: Kelly, where does the administration believe this whole idea came from, that their approach to northern Ireland would be different from the Clinton administration?

WALLACE: Well, aides say part of it comes from the inevitable comparison with Bill Clinton. And these aides say, in any such comparison, George W. Bush suffers because Bill Clinton was so personally engaged. And aides say part of that reason is because the circumstances were so different. Mr. Clinton was sometimes up all night trying to nudge the Protestants and the Catholics together.

Aides are saying that circumstances now are much different. There is a power-sharing government in northern Ireland. There is a mechanism in place for the parties to talk directly, so less of a need for the U.S. to play such a direct role. Although, Judy, the message this administration wanted to convey over the past few days is Mr. Bush will definitely step in, if needed -- Judy?

WOODRUFF: All right. Kelly Wallace reporting from the White House. Thanks.

On Capitol Hill, many senators are bracing for political combat over campaign finance reform before the floor debate opens on Monday. Today, Senators John McCain and Russ Feingold held a town meeting in Maryland to put in yet another pitch for their bill, which calls for a total ban on so-called soft, unregulated money to political parties.

Supporters see this as their best chance in years to limit the influence of big money on politics -- although, McCain notes, many Americans are skeptical.


SEN. JOHN MCCAIN (R), ARIZONA: By overwhelming majority, American people want campaign finance reform. The bad news is, the majority of Americans don't believe we'll do it. They don't believe we'll do it. Because they think that we've become the captive of the special interests and we won't act in the public interests. That's very bad news, my friends, and we've got to prove them wrong. But we can't do it unless we have your active participation.


WOODRUFF: In these final days before the debate, supporters of campaign finance reform have been struggling to hold on to the once solid support of Senate Democrats, who have pulled ahead of Republicans, somewhat, in attracting soft money donations, although there is basically parity there.

I spoke earlier today with representatives of two groups that have been following the soft money trail. Scott Harshbarger, the president of Common Cause, and Larry Makinson of the Center for Responsive Politics. I began by asking them about the growing use of so-called victory committees to raise soft money -- how they work and why they're so effective?


SCOTT HARSHBARGER, PRESIDENT, COMMON CAUSE: Regardless of what else has been given legally to the candidates or other committees, what happens here, the donor gives to the victory committee, usually named for the senator. In this case, the Senate Victory Committee.

WOODRUFF: Whether it's senator Clinton or Senator...

HARSHBARGER: Senator Clinton, Ashcroft, Nelson -- whatever that may be. Then that victory committee gives it to the Democratic or Republican senatorial committees.

WOODRUFF: This is a national committee. HARSHBARGER: That's the national committee. Then the committee -- the it goes back to the state political committee. It gets back to the candidate from the national, the federal committee. And that's how the money comes back into the process to the candidate.

WOODRUFF: Whereas, you're saying, legally, there is a limit on how much money, and these amounts of money are much larger.

HARSHBARGER: This a major loophole because people have already given once. This is a classic double-dipping, but it's using, essentially, what you would call in any other context, a money- laundering scheme, because you're just setting up different holding companies, moving the money through, to get back to the same basic purpose. And that is what is both illegal, but it's also just another manipulation of the system to get more money in that would otherwise be illegal or beyond the limits.

WOODRUFF: Talk to us real quickly, Scott Harshbarger, about who the main recipients were of this kind of money.

HARSHBARGER: Well, interesting -- the two best-known people were Senator Hillary Clinton in New York, and in the case prior to her opponent being the Congressman, it was Mr. Giuliani, was also doing the same thing. Senator Ashcroft in Missouri had a committee. In both cases, we maintained that they were acting illegally. But those are the two most obvious victory committees.

WOODRUFF: You also had Mel Carnahan, of course, his wife is now serving in the Senate -- his widow, I should say -- Bill Nelson in Florida, and Ron Klink in Pennsylvania.

Let me turn to you now, Larry Makinson. The Center for Responsive Politics looked at who the main givers are, in terms of soft money. What did you find out in terms of who's getting the biggest amounts?

LARRY MAKINSON, CTR. FOR RESPONSIVE POLITICS: Well, if you look at people who have given a million dollars or more, there were actually 50 different organizations. And of those, eight were labor unions; four were political committees -- one of which was Hillary's committee, which was actually No. 1 on the list, if you count that -- one was an ideological group, the National Rifle Association. And the other 33 were corporations. Actually, there were five individuals who had small corporations, but 33 big corporations giving money.

These are pragmatic donors. These are people that don't really care. They're not giving money because they like the democratic philosophy or the Republican party. They're giving money because they want to be able to have influence with whoever winds up in power. And ironically, one of the interesting things we saw this year was the Democrats raised as much of that money as the Republicans. That's because nobody really knew how the 2000 election was going to shape up. Everyone was trying to jockey and be in position.

WOODRUFF: Well, next week, of course, the big debate will begin on the McCain-Feingold bill. Separately from that, now, Senator Hagel has come forward with his own proposal that wouldn't eliminate soft money, but would put a cap on it at $120,000 per person for an election cycle. Now, how does that -- how does your information fit into what we know about Senator Hagel's bill?

MAKINSON: Well, what you look at when you look at the actual patterns of money in politics, there's about 64 percent of the money that was given last year would be over that limit of $125,000. So there's about 800 different groups.

WOODRUFF: So would not be allowed.

MAKINSON: Would not be allowed. And if you combine that with the fact that a lot of the donors at that top level are very pragmatic donors, the first thing they're going to be thinking, and one of the big challenges here is, "OK, if I can't give it through this door, what other door can I find to give it to?" There's going to be that -- they're going to be looking for ways to do that, no question about it.

WOODRUFF: And Scott Harshbarger, then, is that going to be an effective -- for Senator Hagel to say anybody giving 120,000 over two years or more is eliminated, is that going to make a big dent in the soft money?

HARSHBARGER: Not at all, that's why this is not reform. This is, first of all, legalizing money that's already illegal. I mean, corporations, unions, cannot give money directly in any event. Secondly, wealthy individuals have always had limits. So the whole goal of McCain-Feingold is to ban this very kind of money so that it can't exist at all.

Hagel's bill makes it legal to do this, and frankly, allows in one instance at least, a Denise Rich or somebody else, to give $540,000 -- or a couple -- in a cycle. That's not reform.

WOODRUFF: How does that work? It's not 120?

HARSHBARGER: You combine the individual limit of 120 for the soft money, and then the hard limits are tripled so that people could give $150,000. And then you have a couple giving, it's 540,000. It's a nice machination, doesn't even take a brilliant lawyer to figure out, because it would legalize what now is illegal. While we're not successful in banning it, this preserves the status quo, in our view. Does not really deal with the fundamental underlying evil in the system today.

WOODRUFF: But, Larry Makinson, wouldn't this at least make it harder for wealthy people to give money? If they've been writing a check for a million dollars to the political party, now. They couldn't do that.

MAKINSON: They couldn't do it that way, and I think they'd be looking for other ways of doing it. One of the reasons we saw this candidate soft money arising with these committees was that the old form of -- there used to be only one kind of soft money. It went to the non-federal committees of the national parties. Now we have candidate-soft, where it's filtered to a candidate, then to the party. And do-it-yourself soft, where instead of giving money to the parties at all, people are going out with independent expenditures, they're doing issue ads, they're putting on their own campaign and spending on themselves. They will always be looking for a way to give some kind of money.

WOODRUFF: Let me ask you both just quickly to make a projection. What do you think's going to happen with McCain-Feingold?

HARSHBARGER: I am cautiously optimistic, because I think that we have a majority of senators who have voted repeatedly for McCain- Feingold, for the Democrats in particular, to flip-flop now, and in the site of victory, actually help support something that is not reform would be politically devastating.

WOODRUFF: And Larry Makinson?

MAKINSON: I say inertia is the strongest force in Washington, D.C. It's going to be awfully tough to get members of Congress to do something that's going to fundamentally change the way they get elected, and they're nervous about it. It's going to be tough.

WOODRUFF: For the McCain-Feingold.


HARSHBARGER: Only the people -- this is why people got to get Americans for Reform Coalition. Call your senators. Get on the phone. The people have got to speak because otherwise inside Washington wins.

WOODRUFF: All right. Scott Harshbarger of Common Cause; Larry Makinson of the Center for Responsive Politics. We thank you both, We appreciate it. Thank you.


WOODRUFF: An election law change in France could have a big effect on the role of women in politics. That story and more, after the break.

Also ahead: how an Internet media company's sting operation may topple the government of India.


WOODRUFF: The second and final round of French municipal elections will end on Sunday. And the results are expected to see a notable increase in the number of women elected to office. That is because French law now requires all political parties to run equal numbers of men and women as candidates.

Joining me now to discuss the new so-called Parity Law in France is Jacqueline Grapin. She is president and co-founder of the European Institute. Thank you very much for being with us.


WOODRUFF: Why was this law passed in the first place?

GRAPIN: The rumors say that the prime minister's wife influenced him very much.

She's a philosopher, and she has quite some influence on him. But I don't think that this is the real reason. The real reason is that although the French want to think that there is no gender gap in their country, there are a lot of contradictions in this country, and although we have laws which are very advanced -- we have had, for instance, abortion laws since 1975, and the status of women have always been very advanced, mostly because of the wars, because women had done everything during the wars -- it remains that they work as much as we -- as much as men.

But in the parliament, there are only 7 percent women, and the mayors -- only 7 percent women. And the French is the last in the European Union, after Spain, after Greece, after Portugal. So the French want to improve a little bit.

WOODRUFF: And does this advantage -- one political party over another, or is everybody going to benefit by this -- or not -- equally?

GRAPIN: Well, the law originally has been proposed by the Socialist Party, and there was a political goal to that, because traditionally women have been more conservative...

WOODRUFF: More conservative?

GRAPIN: More conservative, and the prime minister, of course, expected that the Socialist Party would take advantage of it.

But one should accept the idea that all parties have had to go with this law. It was very difficult to refuse it, and now they have to live with it. And I suppose that it will not change very much in terms of the balance between the two parties.

WOODRUFF: Now, requiring the -- the law says that each party is required to put forth an equal number of men and women candidates. That doesn't mean that an equal number will be elected?

GRAPIN: No, absolutely not. And there are loopholes in the law. For instance, the law requires an equal number of women and men, but it's overall. It's not in an all specific elections, so you can have places where you have more men than women. And usually, women don't -- are not given the best places. So, it's not as equal as it looks.

Also, it's only in places -- this is a municipal election, and it's only in places where there are more than 3,500 inhabitants. So, there are some...

WOODRUFF: The medium is the larger cities.

GRAPIN: Yes. WOODRUFF: So bottom line, Jacqueline Grapin, is that -- can you say that politics in France will tilt one way or another as a result of this new law?

GRAPIN: No, I would not say so. I think that this law is very important for the balance of society in France because it's absolutely necessary to introduce women into the political world.

Women have different goals than men -- and especially at the municipal level. For instance, if you take Paris, what do women want? They want to get rid of stairs miss in the subway, because they want to be able to go with their children and not to have to carry the carts. They want to have day care centers.

You know, such things that men don't really care for. And at the national level, they want more free time, they would like parental law -- leave for the men, which is...


WOODRUFF: ... the family issues.

GRAPIN: The family issues. And why do they want parental leave for men? It's because it would give the habits to French husbands of taking a little bit more care of their children and the domestic questions, that's how.

WOODRUFF: Well, it's one more reason to watch French politics very closely.

GRAPIN: It will be very interesting.

WOODRUFF: And we will keep an eye and, of course, we'll reporting those results.

Jacqueline Grapin, thank you very much for being with us.

GRAPIN: Thank you.

WOODRUFF: We appreciate it. Thank you.

And staying now with international political news, an Internet media company recently used hidden cameras to investigate high-level public corruption in India. And the public outcry that followed has brought government operations to a standstill.

More on this story from CNN's Kasra Naji.



KASRA NAJI, CNN CORRESPONDENT (voice-over): The Indian Prime Minister Atal Bihari Vajpayee went on nationwide television to appeal for time. VAJPAYEE: I shall get to the bottom of the allegations which have been made. I shall work to clean up the dirt that has come into view.

NAJI: These videotapes, taken by the news Web site, have rocked the government. Journalists posing as arms dealers appearing to entrap senior government officials accepting payoffs in a number of defense deals. Prime minister Vajpayee promised an independent commission of inquiry.

VAJPAYEE: At no point, have such allegations been made against my colleagues. That it's why it's self-sufficient to make them of the gravest concern to me.

NAJI: Shouting matches outside the parliament building have replaced debates inside. The proceedings of both houses were suspended Friday for the fourth day running. The opposition members shouting and demanding the immediate resignation of the government. Vajpayee says this has forced him to go to the nation directly.

VAJPAYEE: I appeal to all parties to allow parliament to function, allow it to debate the issues.

NAJI: The defense minister, George Fernandes has already resigned over the scandal. But that has not cooled the political temperature here.

With opposition supporters burning effigies of the prime minister just hours before his televised address, the question is: will Vajpayee's speech be enough to send them home?

SAEED NAQVI, POLITICAL ANALYST: The government is going to live dangerously. The government, by the prime minister's speeches put a cap on the crisis. Whether this cap will remain there, or it will -- there will be enough ferment for it to blow off, we do not know.

NAJI (on camera): The Congress party, which is the main opposition party here, is holding a crucial national conference this weekend to formulate its response to the crisis.

All eyes here will be on that meeting. Kasra Naji, CNN, New Delhi.


WOODRUFF: And now we'd like to quickly bring you up to date on a story that CNN has been following. Lawyers for the widow of NASCAR driver Dale Earnhardt reached a deal with the a Florida newspaper.

The agreement will allow an independent expert to view the Earnhardt autopsy photos. A court-appointed mediator will appoint that expert. And an "Orlando Sentinel" newspaper reporter will be allowed to ask three specific questions about Earnhardt's fatal injuries. Dale Earnhardt was killed last month during the final lap of the Daytona 500. Still ahead on INSIDE POLITICS: what do emissions and credit cards have in common? Our Bill Schneider with the answer in a "Political Play of the Week."

But first, a preview of what's ahead on "MONEYLINE" tonight. Here's Jan Hopkins. Hi, Jan.

JAN HOPKINS, HOST, "MONEYLINE": Ahead on "MONEYLINE": stocks tumble again, and tonight we'll look back on the week when Wall Street fell into its first bear market in more than a decade. What's the outlook for next week and the future?

Plus: a special look at the tough question facing investors: if and when to sell. Plus, the nationwide obsession with March Madness, lost productivity, office pools and more.





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