Skip to main content
CNN.com /transcript
CNN TV
EDITIONS

CNN INSIDE POLITICS

President Bush to China: Release U.S. Air Crew Soon or Risk Damaging U.S.-China Relations; Bush Administration Sends Congress Its Budget

Aired April 9, 2001 - 17:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Live from Washington, this is INSIDE POLITICS, with Judy Woodruff.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Every day that goes by increases the potential that our relations with China could be damaged.

(END VIDEO CLIP)

ANNOUNCER: President Bush raises another red flag in the spy plane standoff with China.

Now that a detailed Bush budget is hot off the presses, many Democrats are hot under the collar.

(BEGIN VIDEO CLIP)

CHARLES FELDMAN, CNN CORRESPONDENT: In a city built upon fantasy, the reality is finally hitting.

(END VIDEO CLIP)

ANNOUNCER: Charles Feldman on the leading man in L.A.'s mayoral vote tomorrow.

Now Judy Woodruff takes you INSIDE POLITICS.

WOODRUFF: Thank you for joining us on this ninth day of the U.S.-China standoff. President Bush sent a message to Beijing that was meant to be heard by China critics in this country as well. CNN's Major Garrett joins us now -- Major.

MAJOR GARRETT, CNN CORRESPONDENT: Hello, Judy, yes, the president added his voice to a chorus of administration officials who made the rounds on the Sunday talk shows, making it very clear to the Chinese government that the longer this crisis goes on, the more damage, potentially, could be done to the U.S.-China relations.

Here's what the president said at a Cabinet meeting this morning to discuss his 2002 budget. (BEGIN VIDEOTAPE)

GARRETT (voice-over): His patience wearing thin, President Bush put the Chinese on notice: digging in your heels will damage the delicate U.S.-China relationship.

BUSH: All of us around this table understand diplomacy takes time. But there is a point, the longer it goes, there's a point at which our relations with China could become damaged.

GARRETT: With his Cabinet looking on, Mr. Bush gave diplomacy its due, but also tacked a tougher course.

BUSH: We're working behind the scenes. We've got every diplomatic channel open. We're in discussions with the Chinese. It is now time for our troops to come home so that our relationship does not become damaged.

GARRETT: This new president also said he was pleased U.S. officials saw the crew for a fourth time. Unlike the third visit, when only eight crew members were seen, this time all 24 were present.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: They are in air- conditioned rooms, air-conditioned facilities. And they are being well taken care of. Their food is brought in from outside the base, suggesting a higher quality of food for them.

GARRETT: Administration officials describe the president as determined, but not preoccupied. Internally, frustration is mounting, but voices counseling patience are still winning the day. A former U.S. ambassador to China said that's still the right approach.

JAMES SASSER, FMR. U.S. AMBASSADOR TO CHINA: I think it's going to take time, and it's going to take patience. The Chinese are negotiating just as they always do when they hold all of the cards. They're going very slowly, going very painstakingly, and drawing it out.

(END VIDEOTAPE)

GARRETT: But administration officials say China does not hold all of the cards, that it has already poisoned its relations with Congress, undermining the status of its free trade status there, and raising new questions about the White House's ability to deal with China on Taiwan, human rights, and a range of other issues -- Judy.

WOODRUFF: Major, where are most of the administration decisions being made on this issue?

GARRETT: Well, right at the top, Judy, by the president himself. Of course, he is getting regular counsel from the Secretary of State Colin Powell, the National Security Adviser Condoleezza Rice, and the Defense Secretary Donald Rumsfeld. And, of course, Vice President Cheney.

Several administration officials I've had a chance to talk to today say there are no camps within the administration. No hawkish camps or diplomatic camps, that everyone really believes that right now patience is the best approach. But patience with a little edge of firmness, both yesterday and today, is probably the best course to deal with this situation.

I can also tell you that in my conversations with people, also in the administration, high officials, that they are heartened by one fact: that the business community has not come to them in a sense of crisis, that this entire prolonged standoff with China could jeopardize U.S. trade relations with China. They are heartened by that. They consider that a signal that the business community outside is taking the lead from the president, measuring this, proceeding cautiously, and not becoming alarmist about what this standoff may in fact do to U.S.-China relations as far as the business community is concerned.

But administration officials do concede that's not going to last forever, and if this does carry on, both damage to U.S.-China relations from the way the White House sees it, but also as far as business community sees it, could in fact occur -- Judy.

WOODRUFF: All right. Major Garrett at the White House. Thanks.

Well, now let's take a closer look at how the standoff with Beijing may affect U.S.-China relations. CNN's John King looks at the possibilities, and how domestic politics may figure in.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): "What next?" is a question already being debated at the White House, and there are few easy choices as the president assesses the future of U.S.-China relations.

The standoff invigorated China's critics in the Congress, and in the upper ranks of the administration. There will be quick pressure for the president to turn tough once the 24 U.S. crew members are free.

LEE HAMILTON, WOODROW WILSON CENTER: It will ratchet up the tensions between the two countries. It will make progress on a lot of other issues much more difficult. So this is really a defining incident for the Bush administration.

KING: The conservative "Weekly Standard" called it "A National Humiliation," and articulated a sentiment heard more and more as the standoff dragged on. Quote -- "It is essential that the Chinese be made to pay a price for their actions." The editorial goes on to say, "Angry words and Congressional resolutions of disapproval are now worse than useless. Unless backed by deeds, they will only confirm Beijing's perception of American weakness."

Mr. Bush, later this month, must decide what new weapons to sell Taiwan, and even before the standoff, several top aides were advocating the sale of destroyers with the state-of-the-art Aegis radar system. Beijing opposes such a sale, but some analysts say the Chinese government would have only itself to blame.

JAMES STEINBERG, FMR. DEP. NATIONAL SECURITY ADVISER: Over the past several years, China hasn't engaged in a buildup of its military forces, and particularly in a buildup of its short and medium-range missile forces that could threaten or intimidate Taiwan.

KING: Other potential sanctions include: revoking China's favorable trade status with the United States; canceling a planned Bush visit to Beijing in the fall; and opposing China's bid to host the 2008 Olympics. Any sanctions likely would cause a backlash in Beijing.

BATES GILL, BROOKINGS INSTITUTE: The situation now, the Chinese view of the United States, is quite suspicious. They are not certain of what our strategic intention towards them might be. And any act that appears to be bullying -- in their terms, hegemonic, unilateralist -- is bound to stir up passions on their nationalist part of the public.

KING: So even after the standoff, Mr. Bush will be walking a fine line. Aides say he firmly believes isolating China would do more harm than good in the long run. But top advisers say the president has made clear in recent days that Beijing must pay a price for its actions, and that he has also acknowledged that no matter what he thinks, there will be considerable domestic political pressure to get tough.

John King, CNN, the White House.

WOODRUFF: Our new poll shows that 61 percent of Americans approve of the way President Bush is handling the standoff with China. When asked if the U.S. should apologize to Beijing, 41 percent of those surveyed said yes. But a majority, 54 percent, said no, in line with the Bush administration's stance. And, 55 percent of those questioned for the CNN/"USA Today"/Gallup poll say they consider the U.S. crew members held in China to be hostages, a word the White House has been careful to avoid.

A little over an hour ago, I talked about the spy plane standoff with Winston Lord, who served as ambassador to China from the United States from 1985 to '89.

I began by asking him, what is the central obstacle to resolving the situation?

WINSTON LORD, FORMER U.S. AMBASSADOR TO CHINA: Right now, it's whether we get around this issue of the apology. The Bush administration correctly refuses to issue an apology and will continue to refuse to do so, in my opinion. The Chinese are going to have to either regret or the "sorry" as the equivalent of the apology, or let our people go, and still haggle about that word. But it would be a disaster for us to apologize.

WOODRUFF: Why are the Chinese so insistent on an apology?

LORD: Several reasons. First, there's some analogy here to their domestic system, where they hold people in jail and consider them guilty until proven innocent, and go for self-confession. A little bit of analogy there.

But more fundamentally, they don't like us crowding their shores. They're a rising power and they don't like our surveillance flights, although they're perfectly legal, of course.

The PLA is flexing its muscles, the Chinese have a succession coming up, and no leader in the future wants to alienate the military. They have a lot of domestic problems, they want to distract their public from all of their domestic problems.

And finally, I think this is a test of the new Bush administration. They didn't seek this incident, but now they're pushing the envelope.

WOODRUFF: But the United States, as you point out, there was surveillance going on, spying going on. Explain why it's so wrong for the United States to apologize for that?

LORD: For several reasons. First, we're in international airspace. We have done nothing wrong. We've done it for 50 years. The Chinese do it in their own way. If they had more capabilities they would do it with their airplanes. They do it with their boats in Japanese waters and the South China Sea. As a matter of principle, you shouldn't do it.

Secondly, if you apologize, you are accepting responsibility, which gives the Chinese legal leverage to try to make us back off from these flights.

It gives them leverage, thirdly, financially, in making us pay for any damages and makes a weak signal from the new administration to the Chinese leadership, which will come back to haunt us; as Kennedy was haunted by (UNINTELLIGIBLE) Khrushchev.

And it also stirs up American public opinion, a congressional opinion, which would make difficult to carry on the instructive engagement that I think that we should and the Bush administration wants. And also, it would send a very bad signal to our allies and friends around the world who are watching this aggressive Chinese behavior.

WOODRUFF: Did it make matters worse when both the president and Secretary of State Powell, said there would be no apology forthcoming? Would it not -- or would it have been better to say nothing and then just try to work this out quietly?

LORD: I think that the administration's handling this just exactly right. We should not be negotiating with ourselves over this. We have to make it very clear to our domestic audience, as well as to the Chinese and the international audience, that we would not apologize for the reasons that I have mentioned. Otherwise, the administration would be hammered for its ambiguous stance on this issue as if it were going to apologize.

And so, this thing would have been out of control if we had not made clear from the beginning of that principle.

WOODRUFF: You know the Chinese language very well. Is there a way to word a statement from the United States that expresses regret, but doesn't go so far as to accept responsibility?

LORD: Well, it gets in to nuances. There may be some creative linguistic gymnastics. We have to be careful: even if we come out with regret in English and they find something that suggests apology and responsibility in Chinese, that would be a damaging outcome in my opinion.

It would not serve us well in terms of the Chinese domestic audience, their view of the Bush administration. The way that it would play along the Chinese-speaking people around the world. So, yes, there's some room for creativity around here. But we better not carry it too far.

WOODRUFF: Your successor as ambassador to China from the United States, Jim Sasser, said at one point that he thinks that it's likely that Chinese government officials are negotiating with the Chinese military. Do you think that's part of what is going on here?

LORD: Yes, I think there is pulling and tugging going along here. We have to be careful not to sort of construct the good guys versus the bad guys in the bureau. But here, there is a genuine debate between those who don't want to rupture this relationship. They may want to milk the incident a little bit.

And those like the PLA, who genuinely not only want the intelligence information but to try to get us to cut back in our surveillance flights and generally flex their muscles. So I do think there is hauling and pulling and you have seen that in the disconnect between some of the Chinese statements coming out in the recent days.

WOODRUFF: You know China so well. Do you believe that this is will be resolved?

LORD: I believe it will be resolved, but I can't tell you how soon. I think that, again, the administration's been correct to point out that the damage has already been done, but not fundamental damage. And every day that passes gets us closer to a crisis where there will be fundamental damage.

WOODRUFF: So, you don't...

LORD: ...and therefore, I think that the Chinese have enough stake in this relationship that they will come to their senses, but the longer this goes on, the more permanent damage that will be done.

WOODRUFF: But you don't know of a formula that would resolve it.

LORD: I don't. I think that the administration has done the two things that should be sufficient for the Chinese. Regret, which by the way, is tied to the loss of life. It's not broader than that. You can say that you are sorry, you regret the loss of life. We should do that. We should not apologize, as we did in the embassy bombing or with the Japanese submarine incident. In those cases, we should have apologized. But regret should be sufficient.

And secondly, we've called for mutual examination of what happened in making sure that it doesn't happen again, which again should be sufficient to determine the facts and to try to have a more stabile future without making it look like it's just the U.S. that has to do the explaining.

WOODRUFF: Former U.S. ambassador to China, Winston Lord, thank you very much.

LORD: Thank you.

WOODRUFF: There is much more ahead, including an update on those Midwest floods and the day's other top stories.

But first:

(BEGIN VIDEO CLIP)

BUSH: Washington's known for its pork. This budget funds our needs without the fat.

(END VIDEO CLIP)

WOODRUFF: President Bush sends his budget to Congress. We will check the numbers and gauge the reaction on Capitol Hill.

(COMMERCIAL BREAK)

WOODRUFF: By almost a 2 to 1 margin, Americans approve of the way George W. Bush is handling his job as president. The new CNN-"USA Today"-Gallup survey shows the president's approval rating at 59 percent. Now that is up slightly over late March when 53 percent said that they approved, then, of his performance.

Mr. Bush today filled in the fine print on his first budget, unveiling an almost $2 trillion package that calls for tax cuts, spending reductions, and a big boost in education funding. Joining me now with more on the president's budget blueprint is CNN White House correspondent Major Garrett.

Hello, Major.

GARRETT: Hello. Good to be back with you, Judy. The budget is the most political document in all of Washington. And the White House likes to think that it has all of its political basis covered, especially in the era of surpluses.

This budget pays down the debt, also makes room for a substantial tax cut. In the meeting with his cabinet, the president said earlier this morning that this budget reflects all of his campaign promises and a new breed of conservatism.

(BEGIN VIDEO CLIP)

BUSH: It's a budget that protects taxpayers, protects children, protect our surplus; it representatives compassionate conservatism.

It's a budget that sets priorities, it's a budget that recognizes there are some good programs here in Washington that need to be funded.

(END VIDEO CLIP)

GARRETT: Now, the White House likes to say the president has a good story to tell when it comes to the budget. I remember in my high school literature classes that a good story has several plot points, well, so does this budget. Let's review them in order.

Number one plot point: How big is this budget? As you mentioned, $1.96 trillion.

What are the plus sides of that ledger? Well, large increases of the Education Department, 11 1/2 percent; increases for defense spending and for the Department of Health and Human Services, with a particular emphasis on biological and scientific research.

But there are some parts to the budget that are cut back, namely, 10 of 25 major agencies received some cut backs. The biggest to be hit: the Transportation Department and the Agriculture Department. The White House has had to deal with some farm state Republicans who have been concerned about those cuts.

And lastly, on the two most important issues, the ones that drive Congress so often, particularly in election years, Medicare and Social Security -- the president's budget sets aside $153 billion for a prescription drug plan, and sets aside the entire $2.6 trillion projected surplus to preserve Social Security -- Judy.

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

Meanwhile, CNN congressional correspondent Kate Snow is at the other end of Pennsylvania Avenue, and she joins us from the Capitol with the early reaction there to the president's budget proposals -- Kate?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, no surprise, Republicans here on the Hill will embrace President Bush's budget proposal, House Majority Leader Dick Armey already releasing a statement calling it a fair and responsible budget. He says, quote, that "it proves we can make important investments in education, defense and health care, while still having at least $1.6 trillion to give back to the taxpayers," that from Representative Dick Armey.

But just the opposite point of view, as you might imagine, from Democrats here on the Hill, Democrats saying that they feel that this budget tries to do too much with the $5.6 trillion surplus. Representative John Spratt, who is the ranking Democrat on the House Budget Committee, says that, look, they seem to think, this administration, that when you have $5.6 trillion in surplus, you can do everything with it. You can do everything. It will be possible, and it will be painless to do. He says that is not the case. And here are his key arguments. Mr. Spratt saying the president's tax cut comes at the expense of programs, like funding for the National Science Foundation. He cites that. He cites funding for NASA being cut, and the public housing drug elimination program that is being cut.

He says the amounts included in the budget for defense spending and the amount that is included for agriculture in defense spending, he says it is underestimated. And in agriculture, it needs to be increased. He says both of those areas will likely increase, which will take away from other programs. And thirdly, Mr. Spratt saying environmental cuts will come through this budget across several different agencies.

(BEGIN VIDEO CLIP)

REP. JOHN SPRATT (D-SC), BUDGET COMMITTEE: Every account that deals with the environment is cut. EPA is cut, Interior's cut, and, lo and behold, the Department of Energy's programs for the cleanup of nuclear waste, which concerns me because it affects my state, is cut by $458 million.

(END VIDEO CLIP)

SNOW: The Democratic aides say that they think this timing is no coincidence, this budget coming out today, on the first day of a two- week recess on Capitol Hill. Democrats saying that was planed. Many Democrats haven't had a chance to look at this document yet, because they're at home in their districts, but one senator who did look at it was Senator Ted Kennedy from Massachusetts. He spoke about the budget today from Boston.

(BEGIN VIDEO CLIP)

SEN. TED KENNEDY (D), MASSACHUSETTS: This is a budget that is being paid for by reducing our commitment in areas of education and in health. So that we can afford an excessive tax program, and we have not got an effective economic enhancement to program that will restore our economy, and that's a mistake.

(END VIDEO CLIP)

SNOW: Judy, one interesting note on all of this. Senator Kennedy received a copy of the budget off of the Internet. His staff found it on the Internet for him. But representative Spratt tells us that he had to get up early this morning. He asked the Office of Management and Budget if he could get an advanced copy of this budget, as he says he has done for years and years. He was not able to do that.

So he told us he had to go stand in line with the press, and he paid $199 to get that budget this morning. The OMB director, Mitchell Daniels, says he had it very early this morning. His aides, Mitchell Daniels says, was one of the first people at the loading dock to pick up a copy, so he said we certainly did not intend to hold off on giving him a copy so he could pour over the budget. Back to you, Judy.

WOODRUFF: Kate, did CNN have to pay for its copies?

SNOW: Yes, we did, many copies.

WOODRUFF: All right. Kate Snow at the Capitol, thank you.

Now, for a more focused look on the Bush budget, including its treatment of medical and social spending programs, we are joined by Health and Human Services Secretary Tommy Thompson.

Mr. Secretary, some pretty tough comments there. Some of them were to be expected, but from Mr. Spratt, who is the chairman of the House Budget Committee, from Senator Kennedy. Senator Kennedy in particular saying that this budget is being paid for by reducing the nation's commitment to health and education. That is your area, what do you say to that?

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: Well, I say that they're wrong, that this budget treats the Department of Health and Human Services very equitably. Overall, we got an increase of 8.5 percent for the total budget, 5.1 percent for the discretionary money.

And when the president was trying to limit all agencies to 4 percent, he gave the Department of Health and Human Services a huge increase. We are putting $2.8 billion into medical research, a subject that Senator Kennedy is very passionate about, as I am, and the president is as well. And he also put in a lot of additional money for children, $350 million increase in children's programs. Women's health -- a 7.5 percent increase for women's health.

I think that if Mr. Kennedy and Mr. Spratt would really look at it, they would see that the Department of Health and Human Services has been treated very fairly.

WOODRUFF: All right, I was just corrected by my producer, Shirley Hann (ph), pointing out, of course, I said Mr. Spratt is the chairman of the committee. As a Democrat, he couldn't be the chairman, but he is the ranking Democrat on the House Budget Committee.

THOMPSON: And Mr. Spratt didn't say anything about health, he was talking about the environment.

WOODRUFF: Let me ask you about some proposed cuts that -- that critics are singling out in this budget, like cutting almost two- thirds of a program that supports medical education, at a time when we have a situation like this -- like the critical shortage of nurses that we have in this country. Now how do you explain something like this? Does it bother you?

THOMPSON: Well, overall, since this program was set up, it's been growing by quite a large amount. And we put in some extra money, additional $5 million for the nurses over and above of last year. We did not put as much money in for the physician, but as everybody knows, the population has increased by about 33 percent in the last 10 years, and the number of physicians has increased by 127 percent.

And we had to make some tough decisions. We wanted to put more money into child care, more money into women's health, and more money into -- for nurses, and therefore, we had to reduce in some places, and physicians' education was one of those that had...

WOODRUFF: So, this is just physicians' education...

THOMPSON: Just physicians...

WOODRUFF: You are saying that this does not affect the nurses.

THOMPSON: It does not. We put more money in for nurses, and for nurses' education, because it's an area that I am very concerned about, Judy, and I know that the president is as well. We are looking for ways to expand the number of people that go into nursing. It's something that we really need. It's an acute shortage.

WOODRUFF: Very disturbing story about it yesterday in the "New York Times."

THOMPSON: Yes. So, we put in an additional $5 million for nurses' education.

WOODRUFF: Another program that's being singled out or mentioned, to train physicians at children's hospitals. Now, perhaps, this is related. Again, a cut there of -- what -- maybe 10-15 percent. Comfortable with that? Is it same -- related to what you were just saying?

THOMPSON: I just want to point out that a year ago, the number -- the amount of money that was put into this program was $43 million. And then last year, they raised it to $243 million, and we are funding at $200 million. So, most of the people feel very comfortable about this. It really is an increase from 43 million to 200 million.

There was just a one-year blip when it went up to 243 million, when it was usually down around 35 to 40 million that this program was funded with. But Congress last year put an extra amount of money in, and we are trying to match almost the same amount, which is 200 million, which is almost 160 million over and above what has -- been historically been at.

WOODRUFF: Two quick questions, and I want to wrap this up with Mr. Secretary. Two programs you are obviously very interested in: Medicare reform, prescription drugs. Both of those seem to be almost in the state of gridlock when it comes to the Congress right now. Are you optimistic this is going to get resolved?

THOMPSON: I really am, because this Congress I don't think can go home unless there's a prescription drug provision. And everybody knows that, everybody wants it on a bipartisan basis, so I am fairly comfortable that we're going to have a prescription drug proposal.

But the president and I really want to reform Medicare at the same time, and improve Medicare, strengthen Medicare, and that's what we need to do. And we think that we can do that on a bipartisan basis. That's what we are working toward, and hopefully we will be successful in that. I feel cautiously optimistic that we will.

WOODRUFF: Separately, let me ask you about the White House announcement that they have appointed Scott Evertz to be the president's adviser...

THOMPSON: A wonderful young man.

WOODRUFF: ... on AIDS policy. He's from your home state of Wisconsin, and he also happens to be the first openly gay adviser to a Republican president in a Republican White House. You recommended him to the president?

THOMPSON: Yes, I did.

WOODRUFF: Why?

THOMPSON: Because he's a wonderful young man, and he's very articulate, and he's passionate about doing something about HIV/AIDS. And we have an international problem, and I think we need a strong voice, and I that he is going to be a strong voice.

In fact, I was going to hire him, and the president got wind of it, and decided to hire him before I got a chance to offer him the job, so I feel very good about that. He is courageous, he is articulate, he's passionate, and he will do a great job for America, and especially for the AIDS community.

WOODRUFF: Can you explain in just a few words what should be different about this administration's approach to AIDS from that of the previous administration?

THOMPSON: Quickly, there is 36 million people in the world that have HIV; 25.1 million are in Africa. One million are only being treated currently across the world, and I don't think the previous administration did enough. This administration is going to be looking at it seriously, and how we can contain the problem in African before it gets onto other countries, and also do the same thing domestically.

And we're very close with the extra money and research to come up, hopefully, with a vaccine that will solve part of the problem. And that's what this administration is working on, and that's why we put so much money into research up in NIH.

WOODRUFF: That's something that your department oversees.

THOMPSON: That is correct.

WOODRUFF: All right, Secretary Tommy Thompson, Department of Health and Human Services, we appreciate it. Thank you very much for coming in.

Still ahead on INSIDE POLITICS, six people vying for the same position. We'll look at the leading contenders in the Los Angeles mayoral race. But first, a check of some other top stories, including the latest on the American Airlines-TWA merger. Has it been cleared for takeoff?

(COMMERCIAL BREAK)

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

A British judge ruled today on the fate of the so-called Internet twins, those nine-month-old girls, born in the United States and adopted by a British couple through an online service. A judge said the girls should be returned to Missouri, where their estranged biological parents are each seeking custody. He said they should be placed in foster care until a court decides who should raise them.

The British couple who adopted the girls, Judith and Alan Kilshaw, are considering whether to appeal the ruling. They brought the babies to Britain three months ago after paying double the fee paid by a California couple who also wanted to adopt the girls.

It is a done deal. American Airlines today completed its $742 million purchase of bankrupt TWA, and in the process became the world's largest air carrier. A federal judge cleared the way by lifting a stay that had been put in the deal, putting it hold. The Jewish Labor Federation had tried to block the move, arguing that TWA workers in Israel were losing their jobs without adequate compensation.

Melting snow and rain are triggering devastating flooding in parts of the Dakotas and Minnesota. One of the hardest hit areas is Breckenridge, Minnesota on the Red River. Vast areas of farmland are already under water, and many highways are blocked. More rain is forecast this week. Much of the region is still recovering from the so-called Flood of the Century four years ago.

A pro football great called it quits today. Dallas Cowboys quarterback Troy Aikman has retired. The 34-year-old athlete made the announcement just a few hours ago in Texas, saying health and family concerns prompted his decision. He fought back tears during the news conference, claiming he would still like to play, but just can't.

(BEGIN VIDEO CLIP)

TROY AIKMAN, DALLAS COWBOYS QUARTERBACK: Another reason why it's the right thing to do is because of the family. If it was just me, I think it would be a little bit easier to try to go on and play somewhere else. Being married and an 11-year-old daughter and another child along the way, asking them to pick up and move on and just to pursue, you know, my own selfish desires of playing, I didn't feel like that was the right thing to do.

(END VIDEO CLIP)

WOODRUFF: Troy Aikman led the Cowboys to three Super Bowl titles. He now plans to head to the broadcast booth.

When INSIDE POLITICS returns, our Bill Schneider checks in from Los Angeles, where the key word in the mayoral race is coalition. (COMMERCIAL BREAK)

WOODRUFF: Los Angeles voters have just one more day to consider the choices before heading to the polls to select the city's next mayor. With a runoff likely, the focus is on three men who have been leading in the polls, each with their own distinct constituency.

We begin with a field report from CNN's Charles Feldman.

(BEGIN VIDEOTAPE)

FELDMAN (voice-over): In a city built upon fantasy, the reality is finally hitting. Of the six major candidates for mayor of Los Angeles, only two capture enough votes on Tuesday to be propelled to the June run-off. And of the six, polls show the race has come down to three front-runners in a game of political survival.

James Hahn has been called the surrogate black candidate, there are none in the race, because his father was a legendary L.A. politico and civil rights leader who is all but idolized by the city's African- American community.

Hahn has long been the odds-on favorite to win, but he's started looking over as the political winds now seem to favor Antonio Villaraigosa, a Latino and former assembly speaker.

And finally, there is real estate broker Steve Soboroff, the lone Republican in this nonpartisan election, who wants construction stopped during rush hour and sees himself as the rightful heir to his political mentor, outgoing mayor Richard Riordan.

(on camera): Political analysts who look at the latest census data, and they look at the fact that there are six candidates, major candidates running for the office of mayor and there isn't an African- American among them, and they say what this shows is a waning of political influence for blacks in the city of Los Angeles. What do you think about that?

JAMES HAHN, L.A. MAYORAL CANDIDATE: I don't agree. I think that when I announced my candidacy for mayor, I think I initially worked very hard to lock up a lot of endorsements in the African-American community. So, I think I demonstrated from the very beginning that I was somebody that the community could get behind.

FELDMAN (voice-over): The candidate generating the most excitement in the increasingly crucial Latino community, however, is Villaraigosa. The question is, will that support be enough?

ANTONIO VILLARAIGOSA, L.A. MAYORAL CANDIDATE: I think the coalition has to represent all the people of Los Angeles. The breadth and depth of my support is reflected in a breadth of support all across the city.

FELDMAN: Steve Soboroff has to think about coalition building, too. But for him, that means not just blacks, Asians, whites, and Latinos, but also Democrats who might be reluctant to vote for a Republican.

STEVEN SOBOROFF, L.A. MAYORAL CANDIDATE: Democrats in Los Angeles and Republicans in Los Angeles, and blacks and whites and Jews and yellows all want the same thing in Los Angeles. We have three big issues going on here: our pubic school system is failing the children, our traffic has us in gridlock, and we need a safer city.

FELDMAN: While the race has been lackluster for the most part, this weekend produced an abrupt change in direction, as charges and countercharges flew over disputed campaign ads and allegedly fraudulent telephone calls. An automated call, purportedly on behalf of Steve Soboroff, who is Jewish, and which his campaign disavows, appears to have anti-Semitic overtones.

UNIDENTIFIED MALE: Soboroff's polling numbers have been falling and we have become entirely dependent upon Jewish money. Thank you."

FELDMAN: Soboroff's campaign says the message is an attempt to rip the city apart. It's calling for an investigation into who placed the calls. And outgoing Mayor Richard Riordan seems to agree, calling the phone message the work of vicious cowards and asking the district attorney to take a look.

Meantime, Jim Hahn has fired off a letter to an Indian group, asking it to cease running radio ads that attack Antonio Villaraigosa.

By all accounts, this is shaping up to be a close race. It is certainly proving an expensive one. In 1993 when Richard Riordan was elected mayor, some $13 million was spent during in entire campaign. Thus far, more than 17 million has been spent on this race, and there's no telling how high that figure will go by the time of the expected June runoff.

Charles Feldman, CNN, Los Angeles.

(END VIDEOTAPE)

WOODRUFF: And joining us now from Los Angeles, our Bill Schneider, who has also been looking closely at the mayor's race.

Hi, Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Hello, Judy.

Well, you know, cities have been losing power in American politics, but this could be the year when cities begin to fight back. Look closely at the campaign here for mayor of Los Angeles, and you can see signs of a new urban politics -- it's aggressively liberal, partisan, and most of all, multicultural.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Each of the three front-runners in tomorrow's primary -- James Hahn, Antonio Villaraigosa, and Steven Soboroff -- is building a distinct coalition. For 20 years, Los Angeles was led by Mayor Tom Bradley, who built his base among African-Americans and white liberals.

This year, Hahn has the solid support of L.A.'s African-American voters. L.A.'s current mayor, Richard Riordan, a Republican who had never held elected office before, got elected in 1993 as a problem solver. Riordan built his base among moderate and conservative white voters. Riordan's endorsed successor, Steve Soboroff, is a Republican with a similar message.

SOBOROFF: And I'm a problem solver, and I have solution to do it. And I will tell you what it is right now, and let's ask every candidate if they agree. This system is broken.

SCHNEIDER: ... drawing similar support from moderate white voters.

The most dynamic candidate in the race, former State Assembly Speaker Antonio Villaraigosa, is offering something new. Yes, Villaraigosa does well among his fellow Latino voters, the city's fastest growing constituency, but Villaraigosa has to share the Latino vote with another Mexican-American candidate, Congressman Xavier Becerra. What's boosting Villaraigosa is his strong appeal to white liberal voters, including many Jews and gays. Jews favor Villaraigosa over two Jewish candidates, and Villaraigosa is doing well among gays, even though another candidate is openly gay.

White liberals were once important to the Bradley coalition, and they gave strong support to Riordan. What's attracting them to Villaraigosa? His message: inclusion.

VILLARAIGOSA: I believe that the next mayor of this city has to open up this city. I believe that the next mayor of this city has to include every single one of us.

SCHNEIDER: Villaraigosa has the endorsement of organized labor, environmentalists, women's rights activists, and the Democratic party. In other words, he's a liberal. Outside money is pouring into the nominally nonpartisan Los Angeles race from labor unions and from both political parties.

KATHLEEN CONNELL, L.A. MAYORAL CANDIDATE: But the most regrettable element in this campaign season has been the powerful influence of huge donations. Millions and millions and millions of dollars from undisclosed sources, the parties and unions, who have spent those funds to support their candidates.

SCHNEIDER: This may be a local race, but the stakes appear to be very high.

(END VIDEOTAPE)

SCHNEIDER: After eight years of a Republican mayor, a bitterly contested presidential election, and now an aggressively conservative administration in Washington, the left may be ready to fight back, starting in the cities -- Judy.

WOODRUFF: All right. Bill Schneider out in California. Thanks. Across the country, wealthy businessman Michael Bloomberg appears to be gearing up for New York City's mayoral race. Bloomberg has filed papers to create a "Bloomberg for mayor" exploratory committee. He has also leased office space for a campaign headquarters. Bloomberg, who's the founder of the multimillion dollar Bloomberg media empire, switched his party registration last year and would run as a Republican.

Still ahead, behind the scenes of the Florida recount. Reporter and author Jake Tapper joins me to talk about what he calls "the plot to steal the presidency."

(COMMERCIAL BREAK)

WOODRUFF: The 2000 presidential election spawned several new books. And one of the newest aims to reveal what the author calls the "down and dirty strategies used by the teams of lawyers and advisers who worked for Al Gore and George W. Bush."

Joining me now is the author of "Down and Dirty: the Plot to Steal the Presidency." Jake Tapper of salon.com. WE also want to point out you're a panelist on the new CNN program, "TAKE FIVE."

JAKE TAPPER, AUTHOR: I am. Part of the family.

WOODRUFF: Jake Tapper, was there a plot to steal the presidency?

TAPPER: There was, in a philosophical sense -- in the sense that neither man really -- neither Gore nor Bush really tried to find out who won the most votes in Florida. Both went at it in a power-hungry fashion that was more about them getting to power, and less about us, and less about Floridians.

WOODRUFF: Is that what we should not have expected, though? Isn't that what always happens?

TAPPER: But why expect that? Why shouldn't we -- you know, there are 175,000 undervotes and overvotes in Florida. We fly into Tallahassee November 8 as a reporter to try to find out who really won. Why shouldn't we expect Bush or Gore or both of them to say, yes, let's actually try to get to the bottom of who won.

As opposed to, Bush saying, I won, I won. Those aren't votes. And Gore saying, those in the four democratic counties -- those are votes; nothing else is.

WOODRUFF: Did Bush have a clear advantage because his brother was governor?

TAPPER: Oh, gosh. Yes, and because the state was Republican. Absolutely. He had the state wired. It's like plucking and throwing Al Gore into the middle of the Everglades and asking him to find his way out.

WOODRUFF: And did Gore have any advantage to counter that. TAPPER: He had a lot of liberal supreme court justices on the Florida Supreme Court. But generally, no. For somebody who was vice president, he really was at a tremendous disadvantage.

WOODRUFF: Who did you find were the key strategists on each side, and what were the best decisions they made?

TAPPER: General Baker, that's what George Bush referred to Jim Baker. He called him General Baker. The best decision he ever made in addition to just being born, was the fact that they went after the best lawyers they could get. That meant, they hired Barry Richard, a Democrat. That meant that they hired Bartlett and Beck, two McCain guys from Illinois, and they just went in there and had the best talent.

The Democrats had the best democratic Florida lawyers they could get -- and many of them were very talented, but it's just not the same bench.

WOODRUFF: Was there a key strategist on the Gore side?

TAPPER: David Boies and Ron Klein really ran the show. But they didn't have the same kind of power and force and strength that the Bush people had.

WOODRUFF: Why not?

TAPPER: First of all, I think, because Jeb was the governor. So, you know, first off, the Gore people thought they had a law firm Holland & Knight lined up to help them, but no one wanted to help out Gore, because Jeb was the governor and it looked like Bush was going to end up as the president. Two, because people didn't really like Gore that much. A lot of Democrats didn't really like him that much, unfortunately.

WOODRUFF: Did either side break the law?

TAPPER: Possibly. There was one thing I found it that was intriguing, and I'd like to find out more, and I understand some media organizations are looking into it. Some Bush political operatives talked about getting soldiers to vote after Election Day, absentee ballot.

Did they do it? I don't know. There's circumstantial evidence that hints that they might. But I can't say that they side, but they sure talked about it.

WOODRUFF: On the Gore side?

TAPPER: Nothing illegal, but other than that, just a lot of bullying and a lot of disingenuousness and lies on both sides. That's why it's down and dirty. And the plot to still the presidency applies to either side.

WOODRUFF: Mistakes -- obvious mistakes -- made on either side?

TAPPER: Obvious mistake number one, not teaching new voters how to vote. But, obvious mistake number 2...

WOODRUFF: On the Gore.

TAPPER: On the Gore side. On the Democrat side. And obvious mistake number 2 was not immediately coming forth and trying to follow-through in your rhetoric, and have all the votes counted.

If Gore had just said on day two, look -- because Senator Chuck Hagel and other republicans were out there saying the same thing -- we need a statewide recount. All the overvotes, all the undervotes. Let the chips fall where they may. Gore didn't do that. By the time he was making the offer, yes, if Governor Bush wants a statewide, I'll go along with it, it was disingenuous and nobody wanted to go along with it.

WOODRUFF: Is there a lesson from this, Jake Tapper, for all of our American politics? .

TAPPER: The grand lesson is pick better candidates who actually will act like statesman. But, on a smaller level, I think that there a lot of election reforms that need to take place and we -- you and I and the rest of the media and voters -- need to take more responsibility for educating other voters, for getting out there, for making sure all votes are counted.

WOODRUFF: What about these mostly media-sponsored recounts. There's another one that came out last week, the "Miami Herald" and "USA Today" -- there's still more to come.

TAPPER: CNN has one coming out in a few weeks.

WOODRUFF: Are these useful. Are they worth while to do this?

TAPPER: They are fascinating for the likes of us. It's like a coroner's report. Kind of like poking to see, looking at the body. But, they are useful in the sense that we know that there were votes there. We know that there were votes not just in the four Democratic counties Al Gore targeted, and votes, even though Bush and Cheney said, those are not votes. Those are no votes. We know that there are votes that's useful for us as a nation to learn the lesson that we really need to make sure that every vote does count.

WOODRUFF: Jake Tapper and the book is "Down and Dirty: the Plot to Steal the Presidency".

TAPPER: Thanks, Judy.

WOODRUFF: Thanks.

Just ahead, Jeff Greenfield on U.S. spy plane incidents, past and present.

(COMMERCIAL BREAK)

WOODRUFF: With the diplomatic struggle over the spy plane and its crew now in its second week, our Jeff Greenfield joins us with more on why this why this incident may seem so familiar.

Hi, Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: That's right, Judy -- at least if you're old enough. I mean, think about it. A U.S. spy plane forced down by a communist nation, an international incident that also becomes a growing political issue: arguments about "regrets" and "apologies."

Well, as I said, if you're old enough, the current story has echoes from more than 40 years ago when the Cold War suddenly got hotter.

(BEGIN VIDEOTAPE)

GREENFIELD (voice-over): May 1st, 1960: with a U.S.-Soviet summit meeting just a few weeks away, a U.S. U-2 spy plane is shot down over the Soviet Union. A few days later, Soviet premier Nikita Khrushchev announces that the plane is in Soviet hands. Washington disclaims any knowledge of such spying. But then Khrushchev springs the trap.

The American pilot, Francis Gary Powers, is alive and has confessed. An embarrassed President Eisenhower promises no more spy flights during his presidency. He urges the summit to go on.

DWIGHT D. EISENHOWER, 34TH PRESIDENT OF THE UNITED STATES: The hopes of humanity call on the four of us to purge our minds of prejudice and our hearts of rancor. Far too much is at stake to indulge in profitless bickering.

GREENFIELD: But the Soviet leader says "no" and the summit collapses. And now, the spy plane becomes a political hot potato when Senator John F. Kennedy, running for the democratic presidential nomination, says he would have "expressed regret" over the incident.

One of his rivals for the nomination, Senator Lyndon Johnson, says that this shows Kennedy is too inexperienced to be president. Others say the crisis shows the need for an older hand, like former presidential nominee Adlai Stevenson.

And throughout the fall campaign, Republican nominee Richard Nixon tries to paint JFK as soft on the Soviets, saying again and again: may the time never come when an American president apologizes or expresses regret to Moscow.

RICHARD NIXON, REPUBLICAN PRESIDENTIAL NOMINEE: ...always willing to negotiate for peace, but never conceding anything without getting a concession in return.

(END VIDEOTAPE)

GREENFIELD: This brief look back shows how much things have changed. Back then, the U-2 plane was clearly violating Soviet airspace and the initial U.S. reaction was clearly false. In fact, that fact alone was a major blow to America's sense of innocence in those pre-Vietnam days. The whole idea of "our side" lying was a shocker to many.

And back then, it was also politically dangerous to offer even regrets, even though we were caught so to speak red-handed.

Today, when there's no hard evidence of any American wrongdoing, the debate seems to be between those who want to stop with regrets and those who want Washington to find some way to say, "we're sorry." Very different times, Judy.

WOODRUFF: Indeed. Jeff Greenfield, we're glad some of us are old enough to remember these things. Thanks very much.

GREENFIELD: You bet.

WOODRUFF: Why are some U.S. allies conspicuously quiet about the spy plane standoff? That story ahead on INSIDE POLITICS.

Analyst Ron Brownstein tells us why a political disaster may be brewing over the federal budget?

And the former president on a pachyderm. Stay with us for the story behind the picture.

(COMMERCIAL BREAK)

WOODRUFF: The global spin on the U.S.-China standoff. Is the sound of silence echoing from Europe?

Plus: the choice ahead for Peruvians after the first round of a hard-fought presidential election.

And...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A Republican Senate leader used to say: "One billion here, one billion there, pretty soon it adds up to real money." That was then. This is now.

(END VIDEO CLIP)

WOODRUFF: Bruce Morton has a trillion reasons to reflect on the history of federal budget battles.

Welcome back to INSIDE POLITICS. The Bush administration says it is at a sensitive moment in its efforts to resolve its standoff with China over a Navy spy plane and secure the release of its crew. The U.S. embassy attache in China met with all 24 members of the crew for about 40 minutes today. It was the fourth time U.S. diplomats met with some crew members, who have been detained in China since their plane made an emergency landing on Chinese territory eight days ago.

President Bush welcomed today's visit, but he issued a warning to China as well.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: First, I just talked to General Sealock. They've had a good visit with all 24 crew members. His report is that their spirits are very high, that they're doing well, and that's good news.

Secondly, all of us around this table understand diplomacy takes time. But there's a point -- the longer it goes, there's a point at which our relations with China could become damaged.

(END VIDEO CLIP)

WOODRUFF: An aerial photograph taken by a U.S. commercial satellite today shows seven trucks parked next to the crippled Navy surveillance plane at a Chinese airstrip. Some Pentagon officials say that buttresses the U.S. claim that the Chinese are removing sensitive high-tech equipment from the plane.

Amid the diplomatic maneuvering between the United States and China, some U.S. allies in Europe are watching, waiting and keeping their opinions largely to themselves.

CNN's Margaret Lowrie reports from London.

(BEGIN VIDEOTAPE)

MARGARET LOWRIE, CNN CORRESPONDENT (voice-over): The man on the street has an opinion.

UNIDENTIFIED MALE: A relatively minor incident is basically seeming to turn into a little bit of a diplomatic war of words.

LOWRIE: So does the woman.

UNIDENTIFIED FEMALE: I don't think the U.S. should apologize.

LOWRIE: But for the most part, the standoff between the United States and China has been met with a thundering silence in Europe. Even though they don't accept the Chinese territorial demands at the core of the dispute, European governments have had little to say publicly, afraid of offending either side.

JONATHAN EYAL, INSTITUTE FOR DEFENSE STUDIES: They do take the American view on some of the issues under discussion, but at the same time, the Europeans are also painfully aware that there is an internal debate in the American administration itself. And there is a feeling that this is not the moment for the Europeans to make a wrong step.

LOWRIE: Even before the current confrontation, Europe worried the Bush government was sending out the message it intends to take a new, harder line on China, as evidenced by the U.S. statement "China is not a strategic partner but a competitor."

A stance quite at odds with Europe, which has courted China in recent years. Chinese officials have visited European capitals, with trade topping the agenda. Europe worries if the confrontation continues, the U.S. may end up blocking China's entry into the World Trade Organization.

EYAL: There is a feel that perhaps the Europeans could benefit in economic terms in the short term by appearing to take a more Chinese policy on the current confrontation, but there's also the realization that they will shoot themselves in the foot, the Europeans, that any hostile U.S. Congress could actually derail the entire trade relationship of the Chinese with the world.

LOWRIE (on camera): Analysts say Europe's overriding concern is protecting its own interests, both in terms of trade and security. Europe wants to keep the U.S. involved in and focused on Europe. Simply put, Europe has too much to lose by getting involved in a spat between the U.S. and China.

Margaret Lowrie, CNN, London.

(END VIDEOTAPE)

WOODRUFF: Back here in Washington, lawmakers and journalists are poring over the details of President Bush's proposed budget for the next fiscal year. And Republicans and Democrats are sparring over what it would mean for the country. In its almost $2 trillion blueprint, Mr. Bush proposes slashing funds for, among other things, urban police patrol, energy conservation and pediatrician training. Democrats charge the president is cutting too deeply in order to make room of his $1.6 trillion tax cut.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: And now, during these difficult economic times, at the outset that the administration has given us is an excessive, unjustified tax cut for the wealthiest individuals and meaningful reductions and support in the areas of education and in health care, in the environment, in the development of alternative energies and energy conservation. This is the wrong medicine for our economy, and we are going to do anything we possibly can to resist it when the Congress returns after Easter.

(END VIDEO CLIP)

WOODRUFF: Members of the Bush cabinet rallied behind the president's budget proposal.

(BEGIN VIDEO CLIP)

ROD PAIGE, EDUCATION SECRETARY: Our budget reflects the principles put forward in no child left behind. Higher standards; and new testing for all students grades 3-8 in reading and math; increased accountability for student performance; a focus on research-based practices, particularly in reading -- and teaching reading; reduced bureaucracy and greater flexibility for states, school districts and schools; and expanded options for parents to make choices for their children's education.

(END VIDEO CLIP) WOODRUFF: President -- education gets the biggest increase in Mr. Bush's budget blueprint, a proposed 11 1/2 percent boost from this year.

And we are joined now by Ron Brownstein of "The Los Angeles." Ron, what do we know about this president by looking at his budget proposal?

RON BROWNSTEIN, "LOS ANGELES TIMES": A lot more, in some ways, than we had before. This budget is the first time that Bush has really had to put flesh on the other side of the ledger. Like all candidates, during the campaign last year, he was able to talk almost entirely about the good things he was going to offer from this big budget surplus that we are anticipating over in the next decade: tax cuts, new spending on education, new spending on faith-based initiatives to help the inner city, but he never had to talk about what would have to give in order to make it all add up.

Now, for the first time, he has, in terms of laying out various specific program cuts. And the question is, can he maintain his broad effort to position himself as a different kind of a Republican, a compassionate conservative, while also looking to squeeze federal spending in some areas that might prove popular?

WOODRUFF: What are the aspects of this budget that make it a problem for him to do what you just described?

BROWNSTEIN: Well, you know, what they're hoping in the White House is fact that he has new spending in certain areas like education will give him a sense of this won't be the same old argument between Republicans and Democrats. But the fact is, as you look through it, Democrats have already picked out pages' worth of specific cuts: reducing the Clinton administration program to hire more police officers; energy efficiency; the environment; some of the inner city initiatives that were launched in the last few years with bipartisan support, such as efforts to encourage more bank lending in distressed urban communities.

Those kinds of things take cuts. Now, what the Bush administration will try to argue is that in many instances where moving dollars from programs that have not proven effective to hoping that those are effective haven't proven effective to those we hope that will be effective, but Democrats, I think, are very quick out of the box in making the case, look, the guy said he was a compassionate conservative, but when it came down to putting his money down on the table, he really didn't follow through on that.

WOODRUFF: But why can't the president make the argument, look, I'm putting more money into medical research; I'm putting a lot more money into education and tick off and just keep saying that over and over again. Why doesn't he just...

BROWNSTEIN: Do you remember his speech to Congress, the joint address to Congress, he spoke about the spending increases first and came to the tax cut later. They are very conscience of this. They very much want to avoid being put back in the old box of seeming like Gingrich, Newt Gingrich in 1995, seeming to advocate spending cuts in order to pay for a the tax increase. They want the -- tax cut, I'm sorry, the tax cut to look relatively painless, as they are simply divvying up the surplus.

What the Democrats want to make the case, now, is that there are real choices here. There are things that have to be surrendered, public priorities that have to be surrendered in order to pay for the tax cuts, and Bush does has the problem that already, before he has put out this budget, the Senate has voted for a very, very different set of spending priorities.

One calculation today, Judy, said that the Senate last week in the series of amendments that it approved, approved $530 billion more in spending over the next decade than Bush had proposed. So, it's very clear that it's going to be difficult in a period of a surplus to hold down spending as much as he wants.

WOODRUFF: What can he do about that? I mean, those votes have already been taken in the Senate, not in the House, but what can the White House do?

BROWNSTEIN: Well, they can do two things. One, they can -- as you mentioned, it is not the final product yet. It is going to go through a House-Senate conference committee, and they will push to lower the spending level and increase the tax cut. The risk there, of course, is if they move too far in that direction, they may lose the votes of those Senate moderates who resisted them in the first place.

The second thing they can do is veto appropriation bills, which is what Dick Cheney talked about yesterday on some of the Sunday shows. He raised the threat of the president vetoing some of these appropriation bills. That would be extraordinary, a Republican president vetoing appropriation bills from a Republican Congress.

The problem he's is that the way they've been trying to get support for the tax cut is in large measure by increasing spending. That's what they were offering wavering senators like Jim Jeffords and Ben Nelson. If they come back and try to veto some of these bipartisan pressure for more spending in a whole variety of areas, education, agriculture, health care, scientific research, he runs the risk of antagonizing and alienating the votes he needs for his tax cut, which ultimately is his top priority.

WOODRUFF: Is this one of those sets of issues where the president can travel around the country and speak to the people directly and say, look, here is what I think, and you tell your member of Congress or your member of the Senate that this is the way it ought to be.

BROWNSTEIN: He didn't have much succeed on that in the budget. The fact is, that on the tax cut originally, he went out and he tried to put pressure on these folks from the outside in. The fact is that the polling at the moment is more supportive of using the surplus for other purposes than a big tax cut: debt reduction, Social Security and to some extent, domestic spend. The challenge I think he's got is keeping this debate at the broad level. That's where he has the most success, when can frame it as who do you trust to spend your money, Washington or yourself. When you get down into the specifics of cutting programs to put more police officers on the street or some of the education areas or child care or so forth, that's when with the Democrats probably have the strongest hand. It really is an issue of which plane of debate it's fought out on.

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

BROWNSTEIN: Thank you.

WOODRUFF: Good to see you.

Political news from outside the U.S. when we return: An update on former President Bill Clinton's trip to India, including his use of local transportation.

Plus: The latest on Peru's presidential elections, and the upcoming runoff between two very different candidates.

(COMMERCIAL BREAK)

WOODRUFF: Former President Clinton is in India to discuss relief efforts for victims of that country's recent earthquake. But he took time out today for an elephant ride. Mr. Clinton told reporters that he didn't ride an elephant during a trip to India last year because the animal symbolizes the Republican Party and in his words, quote, "it had all sorts of humorous overtones."

Here in the United States, a State Department spokesman today praised the people of Peru for what he called a well-run and peaceful presidential election.

CNN's Lucia Newman reports that yesterday's vote left two men standing, and a runoff will determine the nation's next president.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): They call him Pachacutec, the 15th-century emperor who brought glory to the Inca empire, a nickname presidential front-runner Alejandro Toledo relishes as he vows to do the same for modern-day Peru.

Despite recent allegations of cocaine use and fathering a child out of wedlock, the once poor shoeshine boy turned economist educated at Harvard and Stanford is sure victory is only a runoff election away.

"Nothing in my life has been easy," says Toledo. "We've come a long way. We've been at this for two years, and now there's only a short way to go, which will be decided in 40 days."

The populist, who hopes to become the first Peruvian of Indian decent to govern a country traditionally ruled by a white European minority, has the support of many of Peru's disenfranchised.

"He's the best," says this man, "a Peruvian of our race who'll give us jobs."

But it's far from a won race. Against all predictions, former disgraced President Alan Garcia has risen from the ashes like the phoenix, making an astonishing political comeback after returning to Peru from self-imposed exile two months ago. Supporters discount allegations of corruption, and forgive his handling of the economy, which suffered 7,500 percent inflation under his populist rule.

"Everybody has the right to make mistakes," says this supporter. "I think Alan Garcia has learned from his in his long years of exile and he's back to give us hope."

Critics have another explanation.

UNIDENTIFIED MALE: I always thought that political memories in Latin America and in my country were short. I would then think that we're beginning to suffer from political Alzheimer's.

NEWMAN: Garcia is trying hard to show he's changed.

(on camera): But although the former president says he made mistakes that won't be repeated, many Peruvians are concerned Garcia's candidacy could scare off investors and plunge the nation even more deeply into recession.

Lucia Newman, CNN, Lima, Peru.

(END VIDEOTAPE)

WOODRUFF: CNN's military affairs correspondent, Jamie Mcintyre, has some new information on that U.S. spy plane surveillance plane forced to make an emergency landing in China eight days ago -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Judy, a senior Pentagon official confirms to CNN that the U.S. plane was apparently on autopilot at the time the collision took place with the Chinese fighter jet. That would seem to indicate that the plane might have been flying a straight-and-level course, although Pentagon officials won't say that because they say it's possible that the autopilot instructions included a course correction and it's possible the U.S. plane might have begun a banking maneuver at the time the collision took place.

But nevertheless, they say that it supports the U.S. account that the plane, which is seen here in a reconnaissance photograph, a commercial satellite image taken earlier today about 10:30 in the morning China time, that it confirms that that plane was conducting a routine maneuver. At the same time, Pentagon sources indicate that the Chinese planes that were escorting the plane and intercepting it, apparently, the Pentagon has learned from some conversations with the crew that they believe those Chinese planes were engaged in some dangerous maneuvers, but Pentagon officials won't specify what that is. Again, the information that the U.S. plane was on autopilot would seem to counter -- contradict the statements of the Chinese pilot last week who said that the U.S. plane suddenly swerved into the Chinese fighters and that they had no chance to avoid the accident, and that the U.S. plane violated flying procedures.

Instead, it would indicate that the U.S. plane was flying slowly on a deliberate course, and even if the plane did include a turn, it would have been a very slow, obvious turn that would have been conducted by the auto pilot. And the U.S. contends that those Chinese planes were clearly too close to the plane and engaged in some dangerous maneuvering.

That satellite photograph that we just saw, if we could look at it again, it also shows that there are -- there a line of seven trucks and vehicles alongside the plane. This would seem to indicate, the Pentagon officials say, more evidence that China is taking sensitive, high-tech equipment off of that surveillance plane, although they can't say for sure.

The Pentagon has also confirmed that the plane had even more severe damage than they got in the initial report from the crew. Really a miracle that the plane was able to land on that airstrip -- Judy.

WOODRUFF: All right. Jamie McIntyre, our military affairs correspondent, thanks very much.

And INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

(BEGIN VIDEOTAPE)

ROBERT DALLEK, HISTORIAN: ... population of the country has expanded massively. The role of the federal government has grown substantially. You have this huge Medicare program. Johnson had passed Medicare in 1965. That wasn't really in -- or part of the budget.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Ronald Reagan had the first trillion-dollar budget. He had annual deficits bigger than LBJ's paltry 100 billion. In fact, one year Reagan increased defense spending 169 billion, again, much more than Johnson's total budget.

DALLEK: To go back even to pre-World War II or to the early years of the 20th century, it would have boggled the minds of those who were making budgets then, because they couldn't imagine a 1.96 trillion annual budget.

MORTON: Part of it is natural growth. Part of it is that congresses, congresspeople, like to spend, give goodies to the folks back home. If your state has a seaport, build an aircraft carrier there. Trent Lott might vote for one a week if they were all made in his Mississippi.

Farm state congressmen want farm subsidies. Robert Byrd of West Virginia has been carefully shipping bits of the federal government back home for years now. Hey, folks, look, jobs!

There's a lot of uncertainty in budgets, blue smoke and mirrors, of course, but real uncertainty, too. Will there be surpluses if we have a recession? Are these estimates any better than a guess? Lots of uncertainty. And one thing you can count on.

DALLEK: It doesn't shrink. There's something, of course, about bureaucracy that is very difficult to eliminate.

MORTON: Federal spending. 1.96 trillion, and -- bet on it -- likely to go up in the years ahead.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Five trillion, 10 trillion. That's all for this edition of INSIDE POLITICS. I'm Judy Woodruff.

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

 Search   




MARKETS
4:30pm ET, 4/16
144.70
8257.60
3.71
1394.72
10.90
879.91
 














Back to the top