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CNN INSIDE POLITICS

Los Angeles Holds Mayoral Primary; Democrats Assail President Bush's Budget; Negotiations With Chinese Continue for Release of U.S. Air Crew

Aired April 10, 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.
(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How do you make a dimple on this?

UNIDENTIFIED MALE: It's dimple free.

UNIDENTIFIED MALE: Ah, dimple free.

(END VIDEO CLIP)

ANNOUNCER: A little Florida election humor, as local officials scan newer ways to vote.

And from ping pong players to presidents: A history of U.S.-China relations as the spy plane standoff drags on.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's time for our people to come home.

(END VIDEO CLIP)

Now, Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thanks for joining us.

The contest to lead the nation's second-largest city is a big deal in and of itself. There are more people living in Los Angeles than in each of 24 different states. But today's mayoral primary in L.A. also happens to be the most prominent vote since the November election standoff, and the Republicans' takeover of the White House.

So, many political observers are watching L.A. as a potential harbinger of elections to come. We'll discuss that in just a moment. But, let's begin in Los Angeles, where CNN's Charles Feldman is covering the mayoral vote -- Charles.

CHARLES FELDMAN, CNN CORRESPONDENT: Judy, this, is as you have pointed out, a big day in L.A., although, it is not expected to produce an actual winner until a June primary -- a June run-off, I should say. There are 15 people running for this race, but according to all of the polls there are really three who are the most in contention. The three -- of those three, two will end up being on that ballot in June to face one another for that run-off. One, of course, becoming mayor of the city of Los Angeles.

According to the polls, the front-runner, at least as of yesterday, was James Hahn. Mr. Hahn is the son a former Los Angeles county supervisor and enjoys a lot of support among the city's African-American voters. But one of the people that's coming up real close, and somebody who is expected to be a real player in L.A. politics is Antonio Villaraigosa. Mr. Villaraigosa is enjoying a lot of Latino support as well as the liberal Jewish vote in the city of Los Angeles.

And then there's the maverick Republican. This is, by the way, a nonpartisan vote for the office of mayor in Los Angeles and nonetheless, there is one candidate, Steve Soboroff, who enjoys the support of the Republican party as well as his mentor, the current mayor of Los Angeles who is also Republican, Richard Riordan.

So those are the three that are expected to slug it out. Two of them, as I said, expected to end up on the ballot for the June run- off, one of course, becoming the mayor. Now, you know, if you come in here, in on this sign here, you can see, Judy, that there is an effect, a very big effect of that presidential election we just all went through. And you can see the sign says, "Got Chad? Check your ballot card." And that's a warning to voters here in L.A. that when they mark their ballots they have to be careful, as we all learned from what happened in Florida, to make sure that they make their mark and that they don't leave any hanging chads, or dented chads or any of the sort.

Now, we have with us Mr. Frank Martinez who is with the county clerk's office -- city clerk's office.

Let me ask you, there's a big issue about absentee ballots. There are more, I understand, than in previous years, and there is some speculation that this may delay the announcement of who actually won anything.

DENNIS MARTINEZ, L.A. CITY CLERK'S OFFICE: Well, we have about 110,000 vote-by-mail ballots in the house at this time that we are processing. And it's pretty much on track to be similar to the 1993 election, where we had 130,000 absentee ballots. We do have 14 days to certify the election after election day. Some of those vote-by- mail ballots that come in late today, or come in at the polling places, we will be counting after election night and they will be added to the count.

FELDMAN: Now what about these provisional ballots? There is a new law that says people can register to vote much closer to the election. I think it's 15 days now, instead of 30, is it?

MARTINEZ: That's correct.

FELDMAN: So, how is that going to have an impact on figuring out who won? MARTINEZ: Well, if -- because of the new law, we expect more people will have registered closer to election day. They may not show up on the rosters that were printed for the precinct officers. If that that's the case, we'll allow them to vote provisionally, then we will check their signature and ensure they were legally allowed to vote, after the election and then add them to the count. So that shouldn't delay the count, but it is something that we have to add to the count.

FELDMAN: And briefly, you heard me talking about the chad issue, and going through the official ballot, there are a lot of instructions to voters to make sure they do things the right way, right?

MARTINEZ: That's correct. One of the things we did this year was include detailed instructions on how to actually use the vote recording machine to make sure that you would not end up with chad. We have some other information as about chad as well. So we try to give the voters information as well as our precinct officers in terms of our training and instructions on how to help voters vote.

FELDMAN: OK. And in terms of turnout, do you think this is going to be as close as they are saying, and is it going to be a big turnout, a small turnout? What is your guess at this point?

MARTINEZ: Well, at this time, we're pretty much on track for the 1993 turnout. We ended up with 35 percent at that race, but we've also got the vote by mail ballots, so we could easily...

FELDMAN: It could go a little longer.

MARTINEZ: ... percent or better.

FELDMAN: Very good. Thank you very much, and that's it from Los Angeles -- Judy.

WOODRUFF: All right. Charles Feldman. Thanks very much, and of course, we'll be watching this and reporting the results as soon as we know what they are.

The six leading candidates in Los Angeles have raised more than $17 million, making this the city's most expensive mayoral race ever. Most of their money, more than $14 million, has been spent on television ads, according to an analysis by Competitive Media Reporting. Looking at the top four candidates: James Hahn had the biggest ad budget, 3.8 million. Antonio Villaraigosa has spent nearly 3 million on ads. Joel Wachs: 2.4 million, and Steve Soboroff: 2.3 million.

Now, let's talk about the possible national implications of the L.A. Mayoral race, and some other elections this year. We're joined by John Harwood of "The Wall Street Journal."

First of all, John, there are four really main political contests this year: the Los Angeles mayor's race, the mayor's race in New York City...

JOHN HARWOOD, "THE WALL STREET JOURNAL": The governor's recess in New Jersey and Virginia.

WOODRUFF: Now, right now those are all seats held by Republicans.

HARWOOD: By Republicans. They won them in the first year of Bill Clinton's presidency in 1993, and hailed the big sweep and political momentum for themselves. That is exactly what the Democrats are hoping to do this fall.

WOODRUFF: And are they hoping, or do they have a real shot?

HARWOOD: Well, if Steve Soboroff does not make the run-off in tonight's voting, we will know already that the mayoral office in Los Angeles has turned over from the Republican to Democrat. We won't know until November about the other contest.

But anything that's a psychological boost for the party that, that helps them with fund-raising and candidate recruiting is something that they are going to certainly trumpet and try to generate a little traction with.

WOODRUFF: What is different, John, in these four locations: In L.A., New York, Virginia, in New Jersey, from the last go-around where Republicans did so well? Why should Democrats believe that they've got a better shot this time?

HARWOOD: Well, one of the things that Democrats are hoping benefits them in these races is the "time for a change" sentiment, particularly now that the economy is turning down a bit. And if one party has held those office for a while, the other party has an easier argument to say, "You know, it's time to try something different."

Certainly, the Democrats are counting on the fact that after eight years of a maverick-Republican businessman in Los Angeles, the voters there are going to be looking for a change. The same is true in Virginia, where Republicans have controlled the governorship there. They have had budget problems, there's a lot of squabbling within the Republican party, and you've got a Democratic candidate who's a consensus nominee, Mark Warner, who is hoping to make the case, "Look, I am a mainstream moderate Democrat and have you these different brands of Republicans fighting over tax and fiscal policy, let's try something new."

WOODRUFF: And you also have a Republican governor in Virginia who happens to be the chairman of the Republican National Committee adding a little bit of additional pressure.

HARWOOD: That's right. Right, and he's very quick to say, don't read too much into these off-year elections. Very aware that Republicans have got some uphill fights here, as trying to say, well we can't -- we have to judge each of these races on their own merits as local events, not part of a national trend, because he is well aware that just like Haley Barber in 1993, as the Republican chairman said, "We have just created a great environment for the '94 elections," he's trying to do whatever he can to blunt the Democrat's ability to do that later this year. WOODRUFF: John, historically, just how much of a bellwether are these races in a so-called off-election year? What do they really tell us about the climate for the congressional elections and other gubernatorial elections in 2002?

HARWOOD: Well, the truth is that many of these races are decided largely by local factors. But any party competing in these contests is looking for something in the national environment to give them traction.

In New Jersey, for example, Democrats are hoping that a series of decisions by the Bush Administration on the environment are going to help them. That's a very environmentally-conscience state, and their former governor, Christie Whitman, is running the Environmental Protection Agency for the Bush Administration. They're hoping to get some help there. So they're just looking for things that voters can relate to from the national environment to add to that mix of local factors.

WOODRUFF: And by pointing out the environmental decision, you are saying that there are things that a president can do that can have fallout in these races.

HARWOOD: Well, sure, the president is the leader of the party. Anything he does, positive or negative, affects how that party is viewed and that is part of the mix. When voters go to look at the polls for the nominee of governor, a nominee for mayor.

WOODRUFF: At what point, John -- we'll obviously be looking at what happens in the primary in Los Angeles. No doubt, there will be a run-off coming up in the month of June. But what do we look for to tell whether or not this says anything about the future?

HARWOOD: Well, it's hard. One of the problems is we're in this national situation where the two parties are dead-even in their strength. It's often hard to tell who is winning and who's losing. There is not a powerful, national trend that we can see yet.

What you hope, if you are the opposition party, you create a self-fulfilling prophecy. You win some, you put the administration on the defensive a little bit, and then you start to improve the fortunes of your own party. And I think that it's not until November if we know that this is significant as we head into the 2002 elections.

WOODRUFF: A little news coverage on each one of these and if it is a win, it doesn't hurt.

HARWOOD: Right. You try to get thing to snowball.

WOODRUFF: All right, John Harwood from the "Wall Street Journal."

HARWOOD: Thank you.

WOODRUFF: Some members of Congress are looking ahead to future elections with more on their minds than who will win. There has been a lot of talk on the hill about election reform, after the November face-off in Florida. But, as CNN's Kate Snow reports, the talk on this issue, has not so far led to any significant action.

(BEGIN VIDEOTAPE)

KATE SNOW, CNN CORRESPONDENT (voice-over): It was just four months ago, the cry for reform was almost deafening.

In the post-Florida aftermath, legislation to fix the system flowed like water. Proposals cover everything from eliminating punch- card ballots to eliminating the Electoral College. From expanding voter education to expanding polling hours on Election Day.

In the House, at least 26 bills are pending. In the Senate, 15 more. And at the state level, nearly 1,500 bills were introduced. But changing the system turns out to be a lot harder than talking about it. Only 4 percent of those state bills have been signed into law. And no bill has been brought for a vote in the U.S. House or Senate.

REP. ROY BLUNT (R), MISSOURI: The election produced lots of concern but it didn't produce lots of easy solutions. It's easy to say we've got to do something about this system, it's practically difficulty to have a one-size-fits-all solution.

SNOW: And it is politically difficult. Congressman Blunt was tapped by House Speaker Dennis Hastert to head a bipartisan select committee on election reform, but the committee fell apart when the two sides couldn't agree on its membership and its structure.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: We have to act on this matter in a bipartisan and nonpartisan way. And for the life of me, I cannot understand why we cannot make real progress this year on passing nonpartisan and bipartisan legislation.

ROBERT RICHIE, CTR. FOR VOTING AND DEMOCRACY: Right now on the Hill if the major parties had to come together to make Mother's Day a holiday, they would have trouble doing that.

SNOW: Richie heads the Nonprofit Center for Voting and Democracy. He says electoral reform has fallen victim to partisan politics.

RICHIE: The Republicans would like to move on from last year's elections. The Bush administration does not want to have people reminded of the fact that its possible he didn't get as many votes as Gore in Florida. On the other side, the Democrats do get some political hay out of reminding people of that story as they look toward the 2002 elections.

GEPHARDT: We have a poor record at getting people to vote in this country and it is getting poorer every day.

SNOW: Democrats have refused to let the issue die, taking their message to the voters, planning a series of meetings, like this one in Philadelphia. Voter disenfranchisement is a hot topic, particularly for members of the Congressional Black Caucus.

REP. ALCEE HASTINGS (D), FLORIDA: American's civil rights were violated and this is unacceptable.

SNOW: And both sides worry about the practical political impact of reforms. Conventional wisdom says greater voter turnout helps Democrats, though that's not always true. Analysts predict by the end of the year, Congress will take some action to help states upgrade their election machinery.

RICHIE: The only way the Republicans can move beyond this issue is to take action on it and the Democrats, they can basically call the Democrats bluff and say we are going to do something. And I think the debate will be how far it will go.

SNOW: Whatever Congress does, it's unlikely any major reforms will be in place in time for the 2002 election. For one thing, federal funding would have to filter down to local governments, and then they would have to decide how to spend it.

Kate Snow, CNN, Capitol Hill.

(END VIDEOTAPE)

WOODRUFF: The drive for election reform may be more urgent in the state that made the "butterfly ballot" and "chads" household words. CNN's John Zarrella has an update on new voting systems under scrutiny in Florida.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Remember this guy? Judge Charles Burton, chairman of the Palm Beach County Canvassing Board. Five months after the presidential election that thrust this county and its butterfly ballot into the national spotlight, it's easier now to poke fun at what happened in the past. But the future is serious business.

UNIDENTIFIED MALE: This smart card is inserted into the touch screen edge voting system.

ZARRELLA: Tuesday, the county's elections officials held an open house so vendors could demonstrate the latest voting technology. Primarily, the touch screen systems favored by many of the state's elections supervisors.

THERESA LEPORE, PALM BEACH COUNTY ELECTIONS SUP.: There's much more versatility to it. You can put multiple languages in. There's an audio hook-up for blind and illiterate people.

ZARRELLA: Some form of new system is coming to Florida and soon. The state legislature is in the next few weeks expected to decertify punch card systems and mandate either touch screen or optical scan machines.

Elections supervisors from around the state who attended the Palm Beach open house are divided over whether change is necessary.

DEBORAH CLARK, PINELLAS CO. ELECTIONS SUP.: If you compare punch card counties to optical scan counties with central counts, the voters in optical scan counties make forty percent more errors on their ballots.

KAY CLEM, INDIAN RIVER CO. ELECTIONS SUP.: I don't think it's a knee jerk reaction at all. I think many of us have been looking towards new systems because ours were antiquated but we were really waiting for the touch screens to be developed and certified.

ZARRELLA: Whatever becomes the system of choice, it's going to cost money and lots of it.

Touch screen systems can cost as much as $4,000 each and the bigger counties will need thousands of them. In Palm Beach County alone, elections officials say it will cost $10 million to switch from punch cards to touch screens.

John Zarella, CNN, West Palm Beach, Florida.

(END VIDEOTAPE)

WOODRUFF: There is much more ahead on INSIDE POLITICS, including a news update. But first: the U.S. calls them detainees. Some in the House and Senate say "hostage" is more accurate. We will have the latest on U.S. diplomatic efforts in China.

Also ahead:

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: Freedom will always survive terrorism when justice is sure.

(END VIDEO CLIP)

WOODRUFF: Attorney General John Ashcroft visits Oklahoma City, and considers requests for closed-circuit TV coverage of the McVeigh execution.

(COMMERCIAL BREAK)

WOODRUFF: President Bush and U.S. military officials today stood behind their diplomatic strategy to win the release of the U.S. military personnel being held in China. But in public, at least, there were few signs of progress.

We get more from CNN White House correspondent Major Garrett.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT (voice-over): With negotiations at a standstill, President Bush again urged a swift release of the U.S. crew.

BUSH: I am making it clear to the Chinese that it's in their nation's interests to end this situation as quickly as possible.

GARRETT: Mr. Bush met with Jordan's King Abdullah, but continued strife in the Middle East took a back seat to the surveillance plane standoff, now 10 days old.

BUSH: Diplomacy sometimes takes a longer than people would like.

GARRETT: Senior administration officials say the U.S. has done all it can do, both in words and gestures, to address Chinese concerns. Meanwhile, a fifth meeting with 24-member crew. Brigadier General Neal Sealock brought news of Cowboy quarterback Troy Aikman's retirement and e-mails from family members.

BRIG. GEN. NEAL SEALOCK, U.S. EMBASSY MILITARY ATTACHE: They realize that it's a political situation. They realize that their treatment is quite good in comparison to what it might be.

GARRETT: The Reverend Jesse Jackson offered to travel to China as an "mediary" to help win the crew's release.

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: I have done this before. I kind of know how to do it.

GARRETT: He discussed his plans with the Secretary of State Colin Powell, the administration left the offer on the table and did little to publicly stop Jackson.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: You know, so far as people traveling to China, it is really a matter for individuals to decide whether they want to do that or not.

GARRETT: U.S. officials said they are not discouraged that talks, at least for now, have stopped, viewing it as a sign the Chinese may be debating the terms of an agreement. Analyst say both nations may have finally moved beyond diplomatic bluster.

JAMES LILLEY, FORMER U.S. AMBASSADOR TO CHINA: We have gone through the commercials. Now, let's get down to what do you want that I've got and what do I got that you want.

(END VIDEOTAPE)

GARRETT: Some in Congress are calling on the president to recall his ambassador from China. But the White House is sticking with diplomacy and the hope that patience will pay off sooner rather than later -- Judy.

WOODRUFF: Major, if not Jesse Jackson, is there any other intermediary the administration is even considering to get involved in here?

GARRETT: Not that I'm aware of, Judy. Right now, the White House is saying that diplomacy, though in somewhat of a suspended animation stage today, is working, and there isn't really a sense of great discouragement that the talks have stopped. There is a sense here at the White House and at the State Department that there is a quite active internal debate going on within the Chinese government about the next move to take.

But the White House has made it clear, not only in public, but in private, it has done all it can do. The president's gesture of sending a letter to the wife of the missing fighter pilot plus the numerous expressions of regret, even using the sorry is as far as the U.S. intends to go, and the White House still hopes that ultimately will be enough -- Judy.

WOODRUFF: All right, Major Garrett, thanks.

Well, one side issue looming over the current standoff is China's effort to bring the 2008 Summer Olympics to Beijing. CNN has learned that China's ambassador to the U.S. has written a letter to members of Congress asking them not to oppose the Olympic bid. Lawmakers in the House and Senate introduced resolutions before the current standoff began opposing Beijing's Olympic efforts. The ambassador's letter called those resolution, quote, "a gross interference and counter to the spirit of the Olympic charter."

Up next, the day's top stories outside the world of politics.

And later: The scheduled execution of Timothy McVeigh. Should survivors and victims' families be allowed to watch on closed-circuit television?

(COMMERCIAL BREAK)

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

News today in the fight against Alzheimer's. A medical team in California has taken genetically-altered cells and placed the brain of the woman to try to arrest her memory loss. The woman was released from a hospital on Sunday, but the result of the operation will not be known for several months. This is the first known use of gene manipulation to treat an Alzheimer's patient, and the doctors say they are optimistic.

(BEGIN VIDEO CLIP)

DR. MARK TUSZYNSKI, UNIVERSITY OF CALIFORNIA AT SAN DIEGO: This could be a means of significantly improving function, and significantly improving quality of life for a period of, we don't know, but possibly up to a few years.

(END VIDEO CLIP)

WOODRUFF: Seven other patients have been selected for the treatment. A similar type of therapy has proven to be effective in laboratory animals.

Along the Red River in the Upper Midwest, cities and towns are taking steps today against possible flooding. The river is expected to crest in the next few days and this time, no one is taking chances. Four years ago, cities like Fargo and Grand Forks were caught unprepared by April floods. (WEATHER BREAK)

WOODRUFF: All right. Karen Maginnis. We could use some of that rain here in Washington.

When INSIDE POLITICS returns, a weighty decision takes the attorney general to Oklahoma City. A look at what's at issue, just ahead.

(COMMERCIAL BREAK)

WOODRUFF: Attorney General John Ashcroft is handling an emotionally-charged issue, whether to permit closed-circuit television broadcast of a federal execution. Today, Ashcroft traveled to Oklahoma City to talk to survivors and families about their requests to watch their request to watch Timothy McVeigh die.

Our Bob Franken is traveling with the attorney general. He is in Oklahoma City now -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, Judy, in a week from Thursday, it will be exactly six years ago, at 9:02 in the morning, when a massive explosion destroyed the Alfred Murrah federal building, killing 168, 19 of them children.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): Attorney General John Ashcroft took a somber tour through the memorial to that hellish day and met with the families to help him decide whether 250 survivors and relatives of the victims will be able to watch the man responsible be put to death.

JOHN ASHCROFT, ATTORNEY GENERAL: I'm going to do my best to respect their needs and their wishes in ways that are consistent with the fulfillment of my responsibilities to carry out justice.

FRANKEN: The families and survivors want Timothy McVeigh's execution on closed-circuit television both here in Oklahoma City and in Terra Haute, Indiana. It is there where federal inmate McVeigh asked that efforts to block it be ended. The army veteran is scheduled to get a lethal injection on May 16th.

Arlene Blanchard was among those injured when the federal building was blown up. She was inside an office where eight people died.

ARLENE BLANCHARD, SURVIVOR: There was no emotion. There was no concern for killing his fellow man. And yet, he took the oath. He swore to protect, to serve and defend our country and our rights, and he betrayed us. So, it's important to me to able to look at him and see how he is feeling at his final moment.

FRANKEN: Ashcroft has one other question to decide. Will McVeigh be allowed to do the television interviews he's agreed to do?

ASHCROFT: We are in the process of finalizing the policy. Obviously, I'm not interested in providing any additional tools to an individual who wants to disrespect this culture.

FRANKEN: All that is left of the bombed-out building is a back wall and a chair for each of the victims -- small chairs for the children who died. McVeigh was quoted as calling those children "collateral damage."

He will have until two hours before his scheduled execution to change his mind and ask for a stay.

(END VIDEOTAPE)

FRANKEN: If not, so many of those whose lives were shattered, say they want to watch him die. Not so much, they say, because it will bring closure to their agony, it won't. But more, they say, because it will be a symbol of some sort of justice -- Bob.

WOODRUFF: Bob, what more do we know about the criteria the attorney general will use in making this decision?

FRANKEN: Well, he says that what he wants to make sure is that he does not somehow run afoul of laws and regulations. We are being told repeatedly that when he makes his announcement later this week, he will probably come up with an acceptable answer, saying yes, he will allow closed-circuit televising of this. He'll just have to make sure that it follows regulation strictly.

As far as the interviews are concerned, that seems to be a matter of discretion. And his indication is he does not want to give Timothy McVeigh a forum.

WOODRUFF: All right, Bob Franken reporting from Oklahoma City. Thanks.

Still ahead: we'll run the Bush budget numbers by Secretary of Agriculture Ann Veneman to find out if she agrees with some cuts in her department.

(COMMERCIAL BREAK)

WOODRUFF: The new agriculture secretary, Ann Veneman, has had a great deal on her plate since taking her position in the new Bush Cabinet: proposed budget cuts for farm programs, the threat of foot- and-mouth disease spreading from Britain, and an apparent flare-up, flip-flop on testing for salmonella in school lunches.

Joining us now to discuss and her first few weeks on the job, Ann Veneman, secretary of agriculture. Thank you very much for being here.

ANN VENEMAN, AGRICULTURE SECRETARY: Well, thanks for having me.

WOODRUFF: The president spoke about his budget some days ago. He said we're going to have, across-the-board, a 4 percent increase. Your department, though, a 7 percent decrease in discretionary programs. Is this what you expected and are you comfortable with it? VENEMAN: Well, the 7 percent isn't really what it looks like. There was a large increase in the budget for the fiscal year 2001, which included a lot of emergency funding for things like forest fires. Many people don't know we have the Forest Service in USDA.

But if you take out that emergency funding that occurred last year, and you look at the budget from the year 2000 to the year 2002, there's actually about a 5 percent increase. We think it's a very good budget, one that funds the priorities that we have of fighting pests and diseases, of ensuring food safety, of promoting trade programs for our agriculture in the U.S. So, the 7 percent really isn't what it appears to be.

WOODRUFF: Well, when you mentioned the emergency money, and this is not included in the new figures, what happens if farmers in the United States are hit by some, obviously, unexpected disaster this year and that's not part of your budget?

VENEMAN: Well, it is in the president as budget in a different way this year. As you will recall, when the president addressed the Congress, he had a nearly trillion dollar reserve in the budget for emergencies that may be needed, such as agriculture as one of the examples. So, when you look at additional emergency funding for USDA and for farmers, it would be anticipated that if emergencies do arise, that it would come out of that trillion-dollar reserve.

WOODRUFF: So, you're completely confident that farmers would be covered in an emergency, disaster situation.

VENEMAN: Yes, I am.

WOODRUFF: Even though the money's coming from a different pot.

VENEMAN: That's correct, yes.

WOODRUFF: Now, one of the other things, Secretary Veneman, that's been raised is the entire Wetlands Reserve Program was eliminated, under which you have, what, a million acres of marshland that's been protected. What about now, potential development in this land? Is that what could happen now that that's no longer protected?

VENEMAN: What's happened with the Wetlands Reserve Program is that the 1996 Farm Bill put a certain amount of land, acres that would be eligible over the next term of the Farm Bill, and that amount of land was already enrolled in the Wetlands Reserve Program. So, there was no additional land allotted for in the Farm Bill, and that's why the budget numbers were not there.

WOODRUFF: So, again, you're comfortable with this change.

VENEMAN: Well, it's within what was outlined by the Farm Bill, so it's appropriate under the circumstances.

WOODRUFF: As you know, though, whatever the president is saying, Republicans in Congress are saying there are some these farm programs, agriculture programs, we're going to fund. The Senate has already voted amounts that were higher than what the president wanted. You've got Republican advocates out there saying, these are Republican states who are farm states that are getting. We're not going to let that happen. How do you deal with that kind of political pressure?

VENEMAN: Well, actually, what the Senate voted on was putting aside a certain amount of money for potential emergencies in the budget resolution. The president has dealt with it in this reserve fund that I've talked about.

So, I think it's two ways of dealing with what may be anticipated emergencies later in the year. We're still very early in the crop year. We don't know what the disasters might be. In prior years, Congress has not dealt with these disaster-type appropriations until August or September.

WOODRUFF: So again, Republican pressure, your own party in Congress saying we need more money, you're not concerned?

VENEMAN: Well, we think the money will be there if and when the disasters arise.

WOODRUFF: Let me ask you about foot-and-mouth disease. Clearly, it's an enormous issue for Great Britain. Are you confident that the United States is protected against it coming to our shores?

VENEMAN: Well, we are doing absolutely everything we can to ensure that we protect our country from getting the disease. We have a strong prevention program, and since the outbreak has happened in the UK, we've taken additional measures, including cutting off -- temporarily banning all imports from the UK and from all of the EU. We've increased inspectors at ports and at airports. We've increased surveillance at airports for passengers coming back. We have veterinarians that are over in the UK assisting with this outbreak.

And so, we have taken a number of measures to increase not only our preparedness and our prevention, but also to alert the public as to what they can do. I would note, by the way, that if the public is interested and they have questions, as many people have, we do have a toll free number, which is 1-866-SAFEGUARD.

WOODRUFF: Prime Minister Tony Blair and others are saying -- in fact, today he had an editorial piece, an op-ed piece in "USA Today" saying this has been overblown, in many ways, by the news media. Do you agree with that? Has it been sort of blown out of proportion, do you think, as a story? .

VENEMAN: Well, it's a serious issue. I mean, the livestock industry and the farmers in Great Britain have been seriously impacted by this disease, and it's not yet under control. They continue to find cases. And I think it alerts everyone to the potential of such a serious outbreak of a disease like that in our country, that's been foot-and-mouth disease-free since 1929, and people are concerned and they want to make sure that we don't get it here as they see what's happening in the UK.

WOODRUFF: Finally, Secretary Veneman, let me ask you about last week's announcement that was made and then withdrawn that there would be no more testing for salmonella in school lunches. Can you now guarantee that this testing is going to continue?

VENEMAN: Yes. There was a confusion about an issue on a contract specification for school lunches which was going to replace the salmonella testing with some other bacterial testing, and there was not complete agreement about this among all the interested parties, and we pulled that back immediately. I had not been briefed on it immediately.

WOODRUFF: You had not been briefed on it?

VENEMAN: No.

WOODRUFF: Why not? I mean, you're the secretary of the department.

VENEMAN: Well, it was not -- normally, a regulation or a big regulatory change, you would be. This was a contract standard. It was one of those unfortunate situations, but we acted on it very quickly. We said we were going to keep the prior testing processed in place, and we will continue to review the whole situation to determine what's appropriate for the future.

WOODRUFF: So, there could be changes in the salmonella standards? is that what you're suggesting?

VENEMAN: No, in the overall contract standard. We know that salmonella testing is very important and food safety is a very important issue. There were other changes to that contract that may be looked at in conjunction with continuing the salmonella testing.

WOODRUFF: And just to clarify, how many school lunches are we talking about nationwide here?

VENEMAN: Well, we provide lunches all over the country. This was for the contract product, meat product that the department would purchase for the school lunch program. So, it's not all school lunches that are impacted by this contract.

WOODRUFF: All right, well, the secretary of agriculture, Ann Veneman. We thank you very much for being here.

VENEMAN: Thank you for having me.

WOODRUFF: And we look forward to having you again.

VENEMAN: Thank you.

WOODRUFF: Thanks so much.

A budget battle here at home; the standoff with China overseas. We'll gauge the political challenges facing President Bush with Rich Lowry of "The National Review," and Mark Shields of "THE CAPITAL GANG" after a quick break.

(COMMERCIAL BREAK)

WOODRUFF: Some opinion and perspective now on the China standoff and other top stories here in Washington. I'm joined from New York by the editor of the "National Review," Rich Lowry, and here in Washington, columnist Mark Shields of CNN's "CAPITAL GANG."

Mark, to you first. What have we learned about the Bush administration from the handling of this standoff with China?

MARK SHIELDS, SYNDICATED COLUMNIST: I think a couple of things, Judy. First of all, what's been exposed is the enormous gulf in public opinion in the United States between elites and the rest of the nation. The elites have been -- the academic elites, and financial elites and the political elites have always been for overlooking everything that China did, whether they brutalized their own people, or terrorize their neighbors or sold nuclear weapons anywhere in the world to the worst possible forces in the world.

They say, oh, don't say anything because it's a great market. And now -- but people have been, most American rank and file voters overwhelmingly have had great skepticism about China for those very reasons. And I think now, we're seeing maybe that -- and the Bush folks are finally catching up with it -- that perhaps popular public opinion was right and the elites were wrong, that all this economic indulgence and trade and everything else has not made China a more humane, a more decent or a less repressive place.

WOODRUFF: Given that, Rich Lowry, how much patience can the administration expect from the American people on this?

RICH LOWRY, "NATIONAL REVIEW": I do think there's a great reservoir of patience out there among the public. Because they realize there's just limits to how much Bush can do about this. So, there's a rally around the flag effect that he's benefiting from at the moment and will probably benefit for, for the foreseeable future.

So the question that Mark was addressing, how the administration has handled this? I think they have been pretty sure-footed. Last week, they did made a -- what was arguably a tactical mistake, when they shifted from a tough line to saying we regret the loss of life of the that Chinese pilot. They clearly thought that was going to win them some sort of concession from the Chinese.

It didn't. That was a mistake. But it was an understandable one, now the administration seems to be pretty solidly behind the idea of just standing firm and waiting this thing out. And I'm not sure they have any other option.

SHIELDS: Judy, can I just point out, I disagree with Rich in the sense that they started off very tough. The president said he wanted the immediate return. Then they did, as Rich pointed out, go and offer regrets.

Now, the president is sort of the color commentator in this thing. He said today, diplomacy takes a long time sometimes. This is not a foreign relations quarterly. This is the commander in chief of the United States; these are 24 American servicemen and women who are being held, interrogated, they say they are not prisoners of war. Maybe they are prisoners of a trade war. I don't know. I mean, I don't think the patience that Rich admires so much is going to be there and I think that reservoir is going to run pretty shallow.

WOODRUFF: Rich, how come you see that so differently from Mark, this whole question of public willingness to let it play out?

LOWRY: I think, any time there's a foreign crisis, people tend to rally around the president, initially. And that happened with President Carter, as well, in the initial stages of the Iranian hostage crisis. There's no doubt if this drags on and on, Bush risks seeming weak. There's no doubt about that.

But I don't think in the near term, Bush will suffer from this. And I think the statements we have seen from Bush and Powell over the last day or so, saying this could damage the relationship long term, which I think opens the door for people in Congress to begin to layout in a specific way, the way this could hurt. Having the U.S. oppose Beijing getting the Olympics, pulling our ambassador from China, and yes, perhaps reevaluating if China should get PNTR status.

WOODRUFF: And the beginning hints that conservatives are putting pressure on the president. Marc or Rich?

SHIELDS: I think that is coming. I mean, Henry Hyde, the chairman of the House Foreign Relations Committee, said that he was revisiting his own position on his most favored nation. The thing that stands exposed in this whole thing, is the absolute inconsistency, hypocrisy, contradiction, between China policy and Cuba policy.

Cuba, was has an economy slightly smaller than a small town in Illinois, Judy, and is regarded as a mortal threat, 24-7, we have to keep our guard up, or they'll take over the main land, and change the politics of Dade County, Florida.

China, which is the tyrant and the despot of the world, and a brute and a bully, we should go, don't say anything, don't say anything. Because my goodness gracious, we might not be to get cheap t-shirts. We might not be able to get slave labor products.

And I really think that's what's coming home. I don't limit it to President Bush. I think it's been the policy of the United States really since the end of the Cold War.

WOODRUFF: Quickly, let me ask you both a very quick question about the budget. Rich Lowry, how do you see the president's prospects in terms of getting what he wants here?

LOWRY: Well, this is what old budget hands call a "slushee freeze." It's an attempt to hold the line on spending, a lot of give on it. There's a very striking number in the "New York Times" story on the budget today, where Bush wants to hold spending to about a rate of 5.6 a year, a growth rate of 5.6 percent a year. And if you look at the last eight years under Clinton, spending has increased 3.8 percent. So, you actually have Bush proposing a budget that is very defensible, very generous. But the problem is, he's going run right into the teeth of the Democrat strong hand, which is complaining about every program that has a nice sounding name, that is either cut or has its growth retrained.

It also will confront a Republican Congress that is not a bunch of Stone Wall Jackson -- especially the appropriators -- when it comes to restraining spending. And that's why, if you talk to folks in the White House, there's a real "make our day" attitude towards this where they seem to be spoiling actually to veto an appropriations bill. And I think we'll see Bush ratcheting up the rhetoric on spending and see him make some pretty strong statements tomorrow in North Carolina.

WOODRUFF: Mark, a very quick comment on the budget?

SHIELDS: OK, Judy, it eludes me why the Democrats have not claimed victory. Rich gave the numbers; they're there. What we're basically seeing is the repeal of the contract with America. Where's the abolition of all these cabinet agencies? Education spending is up 11 1/2 percent; I mean, Al Gore didn't lose, his policies prevailed. Where's the repeal of National Endowment for the Arts and everything else?

I mean, quite frankly, this is a Democratic budget, and the Democrats have prevailed and George Bush just submitted it.

WOODRUFF: Finally, Rich Lowry, Republican, are you going to run for mayor of New York?

LOWRY: I'll have a final decision very soon, so watch this space, Judy.

WOODRUFF: That we will. We want you back when the decision is made. You can make it right here.

LOWRY: I appreciate the offer.

WOODRUFF: All right. Rich Lowry with "The National Review," Mark Shields with "Capital Gang. Thank you both.

Coming up, an update from the Pentagon on the China standoff.

(BEGIN VIDEO CLIP)

QUIGLEY: ...also you don't see hostages being treated very well. And our 24 aircrew are being treated very well by the Chinese.

(END VIDEO CLIP)

WOODRUFF: The delicate language of diplomacy and the ongoing efforts to secure the release of U.S. personnel.

(COMMERCIAL BREAK)

WOODRUFF: How did a Chinese fighter jet and a U.S. spy plane collide? We'll have an update from the Pentagon.

Are members of Congress shedding any new light on the California power crisis today?

And...

(BEGIN VIDEO CLIP)

BILL DELANEY, CNN CORRESPONDENT: 36-year-old Jane Swift profoundly pregnant with twins, stepping less than lightly into history.

(END VIDEO CLIP)

WOODRUFF: Bill Delaney on the first woman to hold the highest office in Massachusetts.

Welcome back to INSIDE POLITICS. On this 10th day of the U.S. standoff with China, the Bush administration says it has gone as far as it can in its negotiations with Beijing. Now, U.S. officials say it is up to China to break the impasse and release the 24 crew members of a Navy spy plane that made an emergency landing in Chinese territory.

President Bush said today it is time for the crew to come home. But he rejected the Reverend Jesse Jackson's offer to act as an intermediary.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's a lot of people that are anxious to -- for this situation to end. I appreciate the goodwill of a lot of Americans that are concerned about our folks in Hainan island.

This administration is doing everything we can to end the stalemate in an efficient way. We are making the right decisions to bring the solution to an end.

(END VIDEO CLIP)

WOODRUFF: Today, the U.S. military attache in China met for a fifth time with the detained U.S. crew members, who are said to be in good condition.

China is still demanding that the United States apologize for the air collision that led to this standoff. New details are emerging about that incident. Let's check in now with our military affairs correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Judy, Pentagon sources say the accident happened after two close calls, in which the Chinese jets twice came within three to five feet of the EP- 3 surveillance plane, which was cruising along on autopilot.

Then, on the third pass, sources say that Chinese jet approached the U.S. plane from a 45-degree angle, cut it too close, and was hit by the EP-3's number one engine on the left wing. From overhead, the fighter jet's tail is hit. It hit the propeller. Struck parts of the U.S. plane, crippled the plane and the ability to control the plane by the pilot, and it crashed and it -- it landed on emergency landing on Hainan island.

The Chinese jet crashed. Pentagon sources say that that account comes from conversations with the detained crew, as well as other intelligence sources. But it's not something the U.S. is willing to say publicly.

(BEGIN VIDEO CLIP)

REAR ADMIRAL CRAIG QUIGLEY, PENTAGON SPOKESMAN: We do this the right way, and the right way is to have a very methodical talk with the air crew, those in the best position to understand and observe first hand, of course, what happened, after they are released.

(END VIDEO CLIP)

MCINTYRE: In many respects, the U.S. version of events matches the account given by the surviving Chinese pilot, except that China insists that its planes were flying straight and leveled, and that the U.S. plane made a sudden and unexpected turn, and that the collision was caused by the plane veering at a wide angle, making it impossible for the Chinese plane to avoid it.

While not ruling out that the EP-3 could have begun a slow turn, U.S. officials doubt it, especially since sources say that the U.S. plane was on autopilot until the moment of the collision.

Meanwhile, a new commercial satellite photograph taken Tuesday morning in China shows the plane still flanked by seven trucks, which experts believes means that Chinese are planning to haul away the high-tech equipment. An earlier photograph was slightly distorted, and seemed to indicate that the Chinese might be dismantling the plane. But Pentagon sources say that the U.S. -- the Pentagon has clear intelligence photographs that show the plane is clearly intact, and that the Chinese are not taking it apart, at least not yet -- Judy.

WOODRUFF: Jamie McIntyre at the Pentagon.

Over the past three decades, the back and forth between the United States and China has been as erratic at times as, say, a game of ping-pong. CNN's Mike Chinoy explains.

(BEGIN VIDEOTAPE)

MIKE CHINOY, CNN SENIOR ASIA CORRESPONDENT (voice-over): It was 30 years ago that a team of American ping-pong players arrived in Beijing and put an end to decades of Cold War estrangement between China and the United States.

"This is the beginning again of our friendship," Chinese premier Zhou Enlai told the American visitors, "this will meet the support of our two peoples." Today, amidst the continuing spy plane standoff, Sino-American friendship is very much in question. In fact though, George W. Bush is hardly the first U.S. president to confront a crisis with China soon after taking office.

WINSTON LORD, FORMER U.S. AMBASSADOR TO CHINA: There is a theme that keeps coming up, and that is those who are campaigning for office often sound more hawkish than the incumbent in the Oval Office. Then, when they get in the Oval Office, they recognize that this was a very complex relationship, that it had pluses as well as minuses, that it had to be very carefully handled, and that some adjustment in rhetoric and approach were necessary.

CHINOY: Ronald Reagan, for example, campaigned for the presidency promising to re-establish diplomatic ties with Taiwan and sell the island more weapons. Although Reagan eventually visited China, relations with Beijing were poisoned for the first two years of his administration until the signing of a new Sino-American communique, regulating U.S. arms sales.

George Bush inherited a stable U.S.-China relationship, but six months after Bush took office, Chinese hard-liners crushed pro- democracy student demonstrators in Tiananmen Square. The crackdown shattered the U.S. domestic consensus on engaging with China. For the rest of his term, George Bush struggled to maintain a workable Sino- American relationship.

(BEGIN VIDEO CLIP, JULY 16, 1992)

BILL CLINTON, PRESIDENTIAL CANDIDATE: An America that will not coddle tyrants from Baghdad to Beijing.

(END VIDEO CLIP)

CHINOY: Candidate Bill Clinton denounced that approach and linked trade concessions for China to progress on human rights. It took nearly four years of constant friction with the Chinese before Clinton switched approaches by advocating a strategic partnership with Beijing.

Now, George W. Bush has assumed power, promising to replace engagement with competition. For the Chinese government, it's a familiar story.

ROBERT ROSS, BOSTON COLLEGE: The problem for China is that's what every administration has done since Jimmy Carter. And they have to come back and say: "No, we do matter."

CHINOY (on camera): The history of recent decades has shown that after each confrontation, the U.S. and China have moved to stabilize their relationship. The question now is, with the spy plane crisis, whether that same pattern will prevail, or whether this will be seen as a turning point for the hope of long-term Sino-American friendship disappeared.

Mike Chinoy, CNN, Hong Kong.

(END VIDEOTAPE)

WOODRUFF: Here in the United States, the California power crisis gets some attention from Congress. We will go live to the state capital for the first of three days of hearings by a congressional subcommittee on the state's energy crunch.

And later, the unique challenges ahead for the new governor of Massachusetts. Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: Several members of Congress held a hearing today in Sacramento, California, to hear a complaints and proposed solutions to that state's power crunch. CNN's Rusty Dornin was there, and she joins us now with some details. Hi, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Judy, we are in Sacramento, California, which, aside from being the state capital, is also in the heart of the state central's valley. That's where 40 percent of the state's fruits and vegetables were grown. Congressional committee members were able to hear a little bit about the woes of the food processing industry here that processes 16 million tons of fruits and vegetables every year. They depend on a consistent source of energy. They told committee members how devastating it can be when the lights go out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It may take, due to a one or two hour outage, 24 to 36 hours to bring the plant back on-line. That represents as high as 24,000 tons of food that either gets thrown away or does not get processed. We have no protection, currently, from rolling blackouts.

(END VIDEO CLIP)

DORNIN: The ongoing debate, of course, has been about skyrocketing prices of energy, and who and what is responsible? Committee members did grill federal and state regulators for about two hours longer than scheduled about who is responsible for those prices.

The committee chair, Congressman Doug Ose became very frustrated when he was told that to find out about the -- how much the state of California is paying for energy, is confidential.

(BEGIN VIDEO CLIP)

REP. DOUG OSE (R), CALIFORNIA: When I asked the question, and when my constituents asked me, why can't we find out what commitments the governor is making to the state of California's treasury, I am told I am not qualified to hear that. Now, who is it that I have to ask to get that information? Does anybody know? Do I have to issue a subpoena from this committee to get that information?

(END VIDEO CLIP) DORNIN: Now, the hearings are ongoing, and one interesting point is that the only committee members who are here are Republicans. Apparently, the Democratic members were invited, but declined to show up for scheduling or other reasons. Now, there will be another hearing tomorrow in San Jose. We are told that there are some Democratic representatives, Zoe Lofgren and Mike Honda who plan to attend the hearings tomorrow. They will be held tomorrow in San Jose, and another hearing on Thursday in San Diego -- Judy.

WOODRUFF: All right. Rusty Dornin, reporting from Sacramento. Thanks.

A little while ago, CNN senior political correspondent Candy Crowley interviewed California Governor Gray Davis and asked him about his state's power problems, specifically if state's residents will soon face an enormous rate increase.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Governor, thank you very much joining us on INSIDE POLITICS. We appreciate it.

In the past couple of weeks, you have agreed to a rate increase. You've asked customers to conserve, and you just recently announced the agreement with Southern California Edison, which will keep them out of bankruptcy. What more do you need to do, or do you think you have a handle on this now?

GOV. GRAY DAVIS (D), CALIFORNIA: Well, we are definitely making progress. I believe we will also successfully negotiate an arrangement with the other utilities, Sempra that serves the San Diego area. Hopefully, we can get the bankruptcy judge to adopt some version of what we have worked out with the two southern California utilities, with PG&E.

That then takes care of the financing/price issue, and then we have to work on the conservation, and the generation piece for the summer. I am pleased that we have set the world's record in California -- I've approved 12 plants after none were built in the 10 years before I became governor. Seven are under construction. Four will be up this summer, three next summer, but you can't make up for 12 years of inaction overnight, and so we need a little conservation to get us through this summer and next.

CROWLEY: Do you think a little conservation will -- do you feel that you have a grip on the problem?

DAVIS: No question about it. We with a billion dollar program that I will sign tomorrow which awards both businesses and individuals for conserving this summer.

If you want to buy a new refrigerator or a new air conditioner, we will pay half of the cost. You if you are a corporation, we will pay you substantial moneys if you introduce electricity-efficient lighting, demand management programs. Reducing demand is our best weapon against price gouging and blackouts, so we are pushing conservation big time this summer.

CROWLEY: Let me read to you what one of your critics had to say, consumer advocate. "This deal -- referring to the Southern California Edison deal -- by our panic-stricken governor is going to raise rates enormously." Are you a panic-stricken governor? Are the rates going to be raised enormously beyond what you have already proposed?

DAVIS: No, the entire structure is within the rate increase that I proposed last Thursday. There will be no more impact in rates whatsoever.

From the very beginning, my first and highest priority has been to reduce the impact on California consumers who did not ask for deregulation, but everyone just wants me to double or triple the rates. I am not doing that. I am spreading this out over a long period of time, so that there is no sticker-shock, which triggers a recession in California, or which -- works a hardship, particularly on the low-income people.

CROWLEY: You did agree to -- and there are some estimates I have seen that say some people could see their bills go up 37 percent, 40 percent, in that range. What does that do to you politically, do you think?

DAVIS: None of these choices are good. But I inherited a massively flawed system, and I came into my governorship after 12 years of the state not building a single power plant, not one. We've made great progress in building plants, and we are doing our best to clean up the financial mess that was put in place by the people that preceded me.

And I -- the bottom line is, I think people just want this problem solved. They know I didn't create it. And they will judge me by how I solved it. I think I have done it fairly. I've done it in a way that protects people who used the least amount of energy, rewards those who have conserved, and motivates those who are the biggest consumers to cut back.

CROWLEY: Now, you have taken some flack, and I have seen it said publicly -- I've talked to Democrats who privately say, the genesis of this problem does not belong to the governor. He didn't start it. But the scope of this problem now does fall into his bailer, that there were things you could've done earlier, the criticism that you are an incremental thinker. You have heard all of that. Have you paid a price, do you think, for the way you have handled this?

DAVIS: I think in the end, people will see that I solved this problem, which is the biggest financial transaction that the state has ever undertaken in the last 50 years of the 20th century, and obviously in the 21st century, in a fair and reasonable fashion.

The generators -- they want every dime that they charge us, and that was about 1,000 percent over last year. The utilities want to recover every dime that they were charged, and that means massive increase to the consumers. I will not let that happen. And the deal we worked out with Southern California Edison is fair to them, and fair to the rate payers in the state. I believe that the San Diego utility would do the same thing, and I believe that there is a good chance that the bankruptcy judge will order PG&E to do essentially the same thing.

(END VIDEOTAPE)

WOODRUFF: That was part of Candy Crowley's interview with California Governor Gray Davis, conducted just a short while ago.

In addition to voting for mayor, voters in parts of Los Angeles today will choose a new representative in Congress. Three Democratic lawmakers are the front-runners for the 32nd congressional district seat, which covers part of the city.

If no candidate gets 50 percent of the vote, a runoff will be held on June 5th. The post was left vacant after the death of Democratic Congressman Julian Dixon in December.

Ahead on INSIDE POLITICS: a new governor for state of Massachusetts. Bill Delaney on why Jane Swift begins her term with the deck seemingly stacked against her.

(COMMERCIAL BREAK)

WOODRUFF: We'll have more INSIDE POLITICS coming up, but first, let's go to Willow Bay for a preview of what's ahead at bottom of the hour on "MONEYLINE."

Hi, Willow.

WILLOW BAY, CNN ANCHOR: Hello, Judy.

Coming up tonight on "MONEYLINE," a buying frenzy on Wall Street sends blue chips stocks bulging back above 10,000.

Motorola reporting disappointing quarterly results after the bell; we'll break down those numbers.

And leather prices spike as the foot-and-mouth scare devastates the supply of leather. We will take a closer look.

All of that coming up on "MONEYLINE." INSIDE POLITICS continues right after this.

(COMMERCIAL BREAK)

WOODRUFF: .. Swift. And as Swift moves up to the top job, our Bill Delaney reports, the criticism follows.

(BEGIN VIDEOTAPE)

BILL DELANEY, CNN CORRESPONDENT (voice-over): In the venerable halls of the Statehouse of the Commonwealth of Massachusetts, 36-year- old Jane Swift, profoundly pregnant with twins, stepped, less than lightly, into history; the state's lieutenant governor, until the state's governor, Paul Cellucci, resigned to become U.S. ambassador to Canada.

GOV. PAUL CELLUCCI (R), MASSACHUSETTS: Lieutenant Governor, there's a few things you'll be needing when you go to the governor's office. One of the first things you'll need is the key.

JANE SWIFT, ACTING GOVERNOR OF MASSACHUSETTS: Thank you.

DELANEY: Not all the new acting governor will need in the minds of most in Massachusetts.

(on camera): Swift will need most quickly credibility. As a Republican in one of the country's most genetically Democratic states, Swift, in the usually rather anonymous position of lieutenant governor, watched her approval ratings sink to the 20 percent range.

(voice-over): Pregnant with her first child when she ran with Cellucci in 1998, all seemed politically correct then for Swift. Until postpartum, she was accused of having her staff babysit. Then, of flying a state helicopter home for Thanksgiving, and of only grudgingly apologizing.

UNIDENTIFIED FEMALE: The good news for Jane Swift is she has nowhere to go but up. The bad news is, it's going to be a long way to get up to 51 percent, and ultimately, she is going to be judged by the voters in Massachusetts not on the kind of job she does as a mother of three children under three, but the job she does as governor of Massachusetts.

DELANEY: Swift is considered plenty smart. A lawyer, who nearly won a seat in Congress in 1996. Much of what she's come up with, though, as lieutenant governor has come off to many as naive, like her idea to enlist more than 100,000 college-age volunteers to help schoolchildren pass controversial state exams. Hardly anyone signed on.

What may further alienate many, literally, Swift's plan to govern primarily in the coming months from her home in Western Massachusetts, a three-hour drive from Boston.

UNIDENTIFIED FEMALE: What Jane Swift has to learn is what most women already know, whether you're in politics or in any other profession, you're always expected to do better than your male colleagues. You have to have more credentials. You have to be better prepared. Those are the rules.

DELANEY: And there's another rule: Governors run every four years in Massachusetts. Not clear yet whether Jane Swift will try to become her state's first elected woman governor in 2002.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE)

WOODRUFF: Well, that is all for this edition of INSIDE POLITICS. But, of course, you can go online all the time at CNN's allpolitics.com; AOL key word, CNN.

These programming notes: Democratic Congressman Robert Wexler and former Reform Party presidential candidate Pat Buchanan will discuss the U.S.-China standoff tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern.

And Oklahoma Governor Frank Keating will be talking about preparations for the Timothy McVeigh execution on "THE POINT WITH GRETA VAN SUSTEREN." That's 8:30 Eastern.

I'm Judy Woodruff. "MONEYLINE" is next.

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

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