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President Bush Outlines Plans to Develop Missile Defense System; Louis Freeh to Step Down From FBI

Aired May 1, 2001 - 17:00   ET



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must seek security based on more that the grim premise that we can destroy those who seek to destroy us.


ANNOUNCER: President Bush begins to write the sequel to what was once dubbed "Star Wars" despite the fall-out.

We'll open the background on Louis Freeh as we cover the case of the resigning FBI chief.

Plus, Vice President Cheney's hints about future energy policy fuel controversy.


UNIDENTIFIED MALE: This administration has said in clearest terms imaginable, "California, go to hell."


ANNOUNCER: Now Judy Woodruff takes you INSIDE POLITICS.

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

Some defense experts contend that President Bush's speech today may have been as much about politics as it was about national security. Even Mr. Bush acknowledges that he has, quote, "a lot of explaining to do" as he pushes for development a controversial missile defense shield.

But as our John King reports, all that the president offered today was a defense framework for the future.


JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president's speech was short on specifics, but he hinted at taking interim steps toward his long-term goal of a high-tech missile defense shield. BUSH: The preliminary work has produced some promising options for advanced sensors and interceptors that may provide this capability. If based at sea or on aircraft, such approaches can provide limited but effective defense.

KING: Mr. Bush promised consultations with allies and the Congress, and said he was committed to a major shift in national security policy: away from the big nuclear arsenal of the Cold War world in favor of a missile defense.

Mr. Bush did not name names, but had North Korea, Iran and Iraq in mind as he made his case.

BUSH: Unlike the Cold War, today's most urgent threats come from the thousands of ballistic missiles in the Soviet hands but from a small number of missiles in the hands of these states. States for whom terror and blackmail are a way of life.

KING: There were few specifics: No budget, no timetable for deployment, and no decisions on what the system would look like. Mr. Bush called the Russian President Vladimir Putin before the speech and said he was willing to work with Moscow. But he also made clear he was prepared to abandon the 1972 Anti-Ballistic Missile Treaty if an accommodation with Russia can not be reached.

BUSH: No treaty that prevents us from addressing today's threats, that prohibits us from pursuing promising technology to defend ourselves, our friends and our allies. It is in our interests, or the interests of world peace.

KING: Mr. Bush also promised to push for major cuts in U.S. nuclear stockpiles but again, no numbers. The United States has about 7,200 nuclear weapons now, and has committed to bring that number down to 3,500.

President Clinton had hoped to reach agreement with Russia on reducing the number to 2,500, and some Bush Advisers believe 1,500 is enough to maintain a credible nuclear deterrence.

Administration teams will soon head to Europe and Asia to make the case to skeptical allies, and Mr. Bush began the lobbying with calls to the leaders of Japan, Great Britain, France, Germany, Canada, and NATO.


A tough sell abroad, also at a tough sell here for the president at home. The House Democratic leader Dick Gephardt issuing a statement saying he is worried the president may be hurting the nation's security, not in enhancing it. Also among the early critics of the president's plan for national missile defense, the Senate Democratic leader, Tom Daschle.


SEN. THOMAS DASCHLE (D-SD), MINORITY LEADER: We feel that the president may be buying a lemon here. I don't know how you support the deployment of a program that doesn't work. We've got to ask some very tough questions: First, about whether or not this system will ever work. Secondly, whether or not it's worth abrogating a treaty that has been long-standing, one supported by our allies and adversaries alike. And third, what kind of a relationship will we have with our allies if we violate the ABM Treaty and move ahead without adequate consultation without them?


KING: Now, here at White House, a short time ago, the president described his conversation with President Putin of Russia as quite positive. He said he hopes again to reach such an accommodation with Moscow. Intensive consultations now with the allies, with Russia, with the Congress as well. The president hoping to have more of the details by the time that he makes two trips to Europe in June and July -- Judy.

WOODRUFF: All right, John King reporting at the White House. Meanwhile over at the Pentagon, Mr. Bush's evolving defense policy is a sore subject among some senior officers as our military affairs correspondent Jamie Mcintyre reports, some of the brass complain they are being left out of the loop.


JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): During the Campaign George W. Bush surrounded himself with retired generals and admirals, and promised to be the president who would rebuild the U.S. military and restore morale. But Defense Secretary Donald Rumsfeld is drawing fire from senior military officers who privately complain they are being cut out of the strategy reviews that will determine how much the Pentagon spends and on what.

LOREN THOMPSON, LEXINGTON INSTITUTE: They've excluded all the key players, including the military, and as a consequence there's going to be a lot of alienated people when they have to go out and sell this plan.

MCINTYRE: Rumsfeld insists he's kept the joint chiefs and the top military commanders, known as the "CINCs," in the loop even if they are not represented on any of his review panels.

DONALD RUMSFELD, DEFENSE SECRETARY: There's no question with a big department, that not everybody is involved in everything that goes on, but the cincs and chiefs have had repeated opportunities to participate as has the joint staff.

MCINTYRE: Rumsfeld does meet daily with Joint Chiefs Chairman General Hugh Shelton or his deputy. But military sources say while the generals offer their guidance, they rarely get any idea of what Rumsfeld is thinking. The military services complain they are in the dark about basic plans, such as whether they will get money needed for pilot training in the coming months. Other officers fear the administration is rushing to spend billions of dollars on a missile defense system that they would argue, if they could, might be better used on other weapons.

Its creating concern among uniformed leaders that, some say, is a byproduct of Rumsfeld's close-to-the-vest style, and his penchant for asserting civilian control over the military.

THOMPSON: He's very disciplined, he's very intelligent, and he's also a little autocratic.


MCINTYRE: Sources say when Joint Chiefs Chairman General Hugh Shelton was informed last week about the President Bush's big defense speech, he quipped that he hoped he'd also be informed about what the president would say. The irony here is that the administration that ran on the idea of respect for the military, appears to have left the top military officers feeling a little disrespected -- Judy.

WOODRUFF: Jamie, all of that is fascinating. I know you listen very carefully to what the president had to say today. What did you hear new in there that hadn't really already been telegraphed by the administration?

MCINTYRE: Well, a lot of what we heard was things that we had heard before. But I was focused on what the president said about some near-term options for a very limited missile defense. You heard some of those comments in John King's pieces.

What he seems to be talking about there, and what sources say he's talking about, is that the Pentagon is going to feel a freer to test some of these missile defense systems that have been confined to theater missile defense now that the U.S. has made a clear commitment to either amend or walk away from the ABM Treaty. And the Pentagon seems to have an idea, at least Secretary Rumsfeld does, that they may have some technology that they might be able to deploy in as little as four years, rather than the six to eight years it was talk about in the Clinton Administration.

Now, critics call this a "scarecrow defense" in the sense that it won't -- will do little but just perhaps scare adversaries into not attacking the United States but will provide little real protection, but Defense Secretary Rumsfeld indicated today that he doesn't really have a problem with that. He said that whatever they do has to be a deterrent and if something with a limited capability deters somebody from attacking the United States, it may serve a purpose even if it needs to be enhanced down the road.

WOODRUFF: All right. Jamie McIntyre. Thank you.

Now, let's bring in our senior political analyst Bill Schneider. Bill, does the public support a missile defense system?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Judy, in virtually every poll that we've looked at over the past year, support for missile defense system has outweighed opposition. Take this pair of questions asked by the Pew Research Center in February of this year. Half of the sample was asked, simply, "Do you favor or oppose the development of a national missile defense system?" And the answer was 54 to 32 percent in favor.

Now, the other half sample was asked a more elaborate question: "Should the U.S. try to develop a system to protect the U.S. from missile attack, even though critics say it would be costly and might violate existing arms treaties?" When people take those criticisms into account, support does diminishes a bit. It's now 49 to 40.

But the public is still inclined to support a missile defense system. Support is never overwhelming, but it is consistent. People sort of like the idea of a missile shield, especially men. They're much more likely to favor missile defense than women are. Men like big toys.

WOODRUFF: We won't get into that discussion right now. Over the long-term has there been a shift in the public's view of these kinds of things -- nuclear missiles?

SCHNEIDER: Nuclear weapons -- there has been, really. I think the generation of Americans and Europeans who fought World War II accepted nuclear deterrence as the best way to avoid the horror of another conventional war. But later generations became more concerned about nuclear war than conventional war. Nuclear deterrence had lost public support even though it worked. It kept the Cold War from becoming a Hot War.

But Americans never approved of mutually assured destruction as the best way to prevent war. They'd rather do it some other way. How? Well, nuclear disarmament is one way. That is what the nuclear freeze movement was about. Strategic defense is the other way. That's what President Ronald Reagan hit on in the '80s.

WOODRUFF: Well, is it going to be any easier for President Bush to sale missile defense than it was for President Reagan to sell "Star Wars"?

SCHNEIDER: You know, it could be. When President Reagan was promoting Star Wars, the U.S. had a huge budget deficit. The Cold War was raging, the Soviet Union was a serious threat. Now there's no deficit. No Soviet Union. No Cold War. What there is, is a different kind of threat from terrorists and rogue nations. What president Bush called the "grim premise" of mutually assured destruction worked for over 40 years, but it may not work now, when we are dealing with irrational adversaries.

What President Bush is doing is packaging missile defense alongside a reduction in nuclear weapons. "My goal," he said today, "is to move quickly to reduce nuclear forces." So with missile defense you also get nuclear disarmament. What is not to like?

Well, critics claim that strategic defense could lead to a new arms race. Other countries are going to feel fee to build up their arsenals and try to figure out ways to get around the missile shield. Deterrence has the advantage that it's worked. Even if the public has never been comfortable with it -- Judy.

WOODRUFF: All right, Bill Schneider, thank you very much. We're joined now by Leon Fuerth, the former national security adviser to Vice President Al Gore; he's now teaching at George Washington University. And Senator Jeff Sessions, Republican of Alabama, a member of the Senate of the Armed Services Committee.

Leon Fuerth, to you first, does the United States need a missile defense system to protect it from so-called rogue states like Iraq and North Korea?

LEON FUERTH, FORMER NATIONAL SECURITY ADVISER: If they eventually deploy systems, there could be a case for having a like capability to deal with that kind of threat. The last administration was working on such a system. It was called National Missile Defense and it was designed to do just that.

But we had lots of difficulty with it. The technology was not proven. The costs were not fixed. And there was always the possibility that while we settle those issues, the nature of the threat could change also.

WOODRUFF: Given that, Senator Sessions, what is the wisdom of going ahead with this now, as the president is?

SEN. JEFF SESSIONS (R), ALABAMA: Well, I think that it's time for that because we do have a growing capability around the world in rogue nations to have this kind of missile technology that could leave our president in jeopardy if he were to act strongly in a given situation. I do not want the president to feel that, if he acted strongly that American cities might be subjected to attack by some small nation.

As he said earlier, Mr. Fuerth, that President Clinton did go along with this program, and it was passed by the Congress the year before last, actually, as I recall. And it is the established policy of this Congress to go forward with a missile defense program and it was signed by President Clinton. He did drag his feet a bit. And I think that our President Bush is simply saying, I do agree, and it's time to go on and move forward as best we can.

WOODRUFF: Leon Fuerth, is it realistic to do, the president is now introducing the idea of now getting something done quicker by the year 2004, a more limited system? We heard Jamie McIntyre describing the so-called Scare Crow system, that at least would provide a deterrent. Does that make sense to you?

FUERTH: What worries me is that the president is talking about in a very vague sort of way about connecting system A to system B, and hoping they will work. In the meantime, in order to do those things, he might very well have to break the ABM Treaty, abrogate it, announce our withdrawal with it. And so we incur very real consequences.

And the construction of arms control is the framework for reducing controlling nuclear weapons, in return for something that might be not work and might be far in excess of our real needs.

WOODRUFF: How do you respond to that, Senator Sessions? SESSIONS: Well, you know, Russia still has a capability to overwhelm any missile defense program we have in the plans today. But that treaty should not keep us from protecting ourselves from some rogue nation who might attack us with smaller numbers of missiles that we could defend against effectively, and I think that the president has got to be firm about it.

He's got to tell our allies that he intends to go forward, and that he will -- and explain to them, how it will lead him to greater capability in acting in the defense of our allies and in the United States in the case of a crisis. We just do not need him to be blackmailed by some small nation.

WOODRUFF: Well, Leon Fuerth, I want to go back to the question I originally posed to you. Is there enough of a threat out there from these so-called rogue nations, whether we are talking about Iraq or North Korea or whatever, for the U.S. to go ahead with this?

FUERTH: There is not enough threat of existence from these states to justify our moving rapidly and that in an artificially accelerated pace to deploy these systems and to announce that, if the Russians don't like it, we will abrogate the ABM Treaty, which is what the president did, albeit in a nice tone of voice. That is nevertheless what he said to them.

And I think that we should proceed in a very measured way, I think we should be extremely cautious about disturbing the treaty. And I believe the technologies that make it impossible to adjust the treaty are things that we should debate and avoid.

WOODRUFF: Let me follow-up on that: you say artificially accelerated pace. What are you saying the president is doing?

FUERTH: I think that he is talking about a process in which the Department of Defense is casting about for ways to "collage" together, as they say, different systems that were never designed for the role of ballistic missile defense, in order to have something that they can say is out there ahead of schedule.

WOODRUFF: Senator Sessions, is that what is going on?

SESSION: Well, I think that the president is wise to say that he will examine all possibilities that could help make this system more effective. But we will proceed with the implementation of a system as the Congress voted to do over a year ago. And if there gets to be a problem that's not effective, we will slow down and make sure that problem is dealt with before the system is implemented. That's what grown-up people do.

But my best judgment and the best judgment of the best minds that we've heard at the Arms Services Committee is, that we are on schedule, that we can meet these deadlines and that we should go forward.

WOODRUFF: And -- and Senator Sessions, are you troubled by the notion that we don't know the cost, the price tag of this yet? SESSIONS: The cost is not too great. I believe the president will be asking for an additional 8 billion over five years, I believe, for this program. It is not as great as a lot of people would say. It's certainly not nearly as great and as significant as when -- as being discussed by President Reagan, when he was discussing defending against a Soviet attack. I mean, that would be a big, big deal and we have a much smaller system than that.

WOODRUFF: Leon Fuerth, does that sound about right to you, that we can come up with the system that works for 8 billion?


SESSIONS: I didn't say that figure. He asked for an increase, I believe, and 8 billion for the national missile defense programs. I think it was about 3, maybe 4 billion a year over the life of the project, it would cost.

FUERTH: There are two things that are really surprising about all of this. One of this is that apparently if the senator has a right, the president is endorsing President Clinton's architecture for a missile defense. I am not sure if that is actually what he is describing.

In fact, I think what we just heard is the opening move towards a much more robust defense and one which couldn't possibly be accommodated in the ABM Treaty.

I'd also add that there's real programs about unilaterally reducing strategic nuclear weapons that need to be thought through carefully.

WOODRUFF: Well, gentleman, we will have to leave it there. But I want to thank both of you -- Senator Jeff Sessions and Leon Fuerth, thank you both for joining us.

SESSIONS: Thank you.

WOODRUFF: There is much more ahead on INSIDE POLITICS.

Up next: the FBI director says he's stepping down. We will explore the reasons behind Louis Freeh's decision, and consider some potential replacements.

Also ahead: a tax cut deal at the Capitol. We will have the latest from both ends of Pennsylvania Avenue. And later:


UNIDENTIFIED MALE: In 2000, George Bush invested somewhere between 10-15 million dollars in the state and the succeeded in narrowing the Democratic margin error from 13 points to 12 points.


WOODRUFF: The shifting political fortunes for Republicans in California: Ron Brownstein finds the numbers are working against the GOP.



WOODRUFF: FBI director Louis Freeh today told President Bush he will retire next month. Freeh has held the top job for eight years, but he said now is the time to end his 27 years in government service. CNN's Patty Davis has more on Freeh's sometimes stormy tenure as FBI director.


PATTY DAVIS, CNN CORRESPONDENT (voice-over): Louis Freeh's resignation came as a surprise to the White House. Freeh met with President Bush Monday to give him the news.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It did catch me by surprise. And I'm disappointed. I would hope -- I was hoping that he would stay on.

DAVIS: Freeh says he's retiring in June, two years before his 10-year-term ends, and plans to spend the summer with his wife and six sons. Freeh's departure comes a few months after the embarrassing arrest of Robert Hanssen, an FBI agent accused of spying for Russia for the past 15 years.

Freeh, a former FBI agent, federal prosecutor and judge, was appointed in 1993 by President Clinton. Their relationship grew strained. Freeh called for an independent counsel to investigate the 1996 Clinton-Gore campaign fund raising. Just last year, President Clinton said he wasn't happy with how Freeh's FBI handled the Wen Ho Lee case.


WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: The whole thing was quite troubling to me.


DAVIS: Freeh's tenure also included troubles with the FBI's crime lab and the bombing in Atlanta's Olympic Park, in which an innocent man, Richard Jewell, was implicated.

SEN. CHARLES GRASSLEY (R), IOWA: If there was a shortcoming, it was his inability to be self-critical about the FBI. There's kind of a culture within the FBI of publicity over substance.

DAVIS: But Freeh also had successes. A peaceful resolution in the Freeman standoff in Montana, Freeh emphasizing negotiations instead of confrontation, the tactic used by his predecessors at Waco and the deadly standoff at Ruby Ridge.

LOUIS FREEH, FBI DIRECTOR: For problems that have occurred during my watch and the problems which have developed prior to my watch, I take full responsibility.

DAVIS (on camera): Freeh made a point of saying he hasn't been negotiating for another job and doesn't have one lined up. As to who will take his job, the White House says its search is just beginning.

Patty Davis, CNN, Washington.


WOODRUFF: The process of replacing Freeh may be in the preliminary stage, but a man mentioned for the job in the past is Oklahoma's Republican Governor Frank Keating. The governor is a former FBI agent. Today, his spokesman told CNN, there has been no contact, quote: "from the White House, the Justice Department, from anyone," end quote.

On Capitol Hill today, House and Senate Republicans reached an agreement on the size and scope of the president's proposed tax cut. With the very latest, CNN's congressional correspondent Jonathan Karl.


BUSH: This is a great day for the American people and the American taxpayer.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): His tax cut has been scaled back by congressional negotiators, but the president is declaring victory.

BUSH: Today we have accomplished significant tax relief, and showing we can work together in a constructive way to get things done for the people of this country.

KARL: The deal, which makes room in the budget for tax cuts of $1.35 over 11 years is a significant step toward enacting the biggest tax cut in a generation. It would allow for a tax cut of $1.25 trillion over 10 years, and an additional $100 billion in so-called stimulus tax cuts this year and next year to spur the economy.

On Capitol Hill, key moderate Democrats said it sounded like a deal they could support.

SEN. MAX BAUCUS (D-MT), FINANCE COMMITTEE: It's in the ballpark, and my guess is that a significant number of Democrats will support it.

KARL: The deal makes possible a tax cut of about $500 billion larger than Democratic leaders wanted, but the Senate's top Democrat praised the deal, even as he said he would vote against it.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: This represents a 22 percent reduction in the president's initial proposal, so we are moving in the right direction.

KARL: But Senate's Republican leaders cautioned the deal announced today won't leave enough room for everything the president wants.

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: I don't believe that's enough funding to do all that the president has asked for in his core packages.

KARL: The specifics of $1.7 trillion tax package that the president had proposed included across-the-board cuts in income tax rates, an elimination of the so-called marriage penalty, elimination of the estate tax and a doubling of the child tax credit.


KARL: And once this deal is finally inked, Congress will have to get down to the harder work of actually figuring out the specifics of the tax cut, the scaled-back tax cut.

The Republicans here in the Senate are evenly divided on this issue. Some would like to simply do away with one of the major components of the president's tax cuts, other would like to keep all those components, but simply scale them back, each a little bit. That's the process that will go on over the next several weeks here on Capitol Hill.

And also, as far as that budget outline goes, they still have not come to an agreement on spending levels. Right now as we speak, congressional negotiators are in speaker of the House Dennis Hastert's office trying to bang out the details of how much spending will increase in next year's budget.

Of course, the president wanted to keep it to just 4 percent. The Senate passed the budget that had an increase of over 8 percent. That process now going under way. They expect to have a deal perhaps by the end of the day -- Judy.

WOODRUFF: Wish we had a camera in that room.

Jon, let me change the subject a little bit. We learned that the president tomorrow is going to introduce a commission to look at overhauling Social Security. What has been the early reaction to that on the Hill?

KARL: Well, I have learned a little bit more about that commission, the specifics of that commission. It is going to be a 14- member commission. It's going to be chaired -- co-chaired by Daniel Patrick Moynihan, of course the former senator, Democratic senator from New York, and also Richard Parsons, who is, of course, with AOL Time Warner, the parent company of CNN.

The members of that commission also will include Robert Johnson of BET and Tim Penny, a former Democratic senator from Minnesota. The early reaction, and this has not been formally announced by the White House -- the early reaction from Democrats up here has been universally, at least from Democratic leaders, negative, quite harshly negative. Here is what Tom Daschle had to say just a little while ago.


DASCHLE: People will see this for what it is. This is a stacked deck. This is not an objective review of our options under Social Security. These are becoming -- these will quickly become advocates, not thoughtful and judicious evaluators of options.

We don't need another lobbyists group. There are plenty of those. That is, in essence, what this will be.


KARL: And essentially, what the Democrats are complaining about is that this bipartisan commission, which will be appointed by the president, including seven Democrats and seven Republicans -- well, they say those seven Democrats are largely people who have already come out and supported the kind of privatization -- partial privatization that George Bush advocated in the campaign.

Of course, Daniel Patrick Moynihan has been an advocate of that, and so has Tim Penny. So, they are saying this is a stacked deck, designed to produce exactly the result the president wants.

Meanwhile, Trent Lott came out, the Republican Senate leader, and praised the idea of a commission, and said he looks forward to seeing what this commission comes up with. Here is what Lott had to say.


LOTT: I think to allow people to have an opportunity to invest some of their own money for their own retirement is a very positive thing, it has a lot of appeal to my children's generation. So, we will have to look at this proposal, and we will have to look at what the commission comes back with before we make the final decision.


KARL: Now, notice, Judy, there was a slight cautionary tone to Lott's remarks there. That's because some Republicans up here are a little bit nervous about this, because the commission will be expected to report out findings by the fall, and then Congress will be expected to act on some kind of a partial privatization of Social Security next year, a critical election year.

And Republicans know this could be potentially an explosive issue that could cost them, if Democrats can convince voters that what the Republicans are doing is dismantling perhaps the most popular program, domestic program, in U.S. history, Social Security.

WOODRUFF: On the other hand, it took a Social Security commission the last go-around to come up with suggestions that made a difference.

Jonathan, let me just quickly change the subject. One more time, please tell us where the Hill stands with regard to the president's education reform proposals? KARL: Well, they're in a bit a mired mess here right now, as far as education goes. We've been talking now, Judy, for about a week and a half about how the Senate wanted to proceed on education, that the Senate negotiators -- Democrats up here on Capitol Hill had been working with the president on a deal for education. They've been long saying that they are close to a deal.

But right now -- the Senate was expected tonight to begin formal debate on the education plan, and right now, they're going nowhere. That's because Democrats, right now, say that they do not have a sufficient agreement from the White House or from Republicans up here on Capitol Hill as to what exactly that education plan will be.

They're still complaining that there's not enough money in there, in terms of spending increases for education. And they're also complaining about some of the specifics in terms of accountability and testing, which is really central to the president's plan.

So right now, Congress, which we were expecting to be in the middle of an education debate, is delayed. They're even talking about maybe moving on, debating another issue, and holding off on education. But of course, you need to get some kind of an agreement, and these threats are often the last thing you hear before you get to an agreement. So we may be back to education tomorrow. But right now, no guarantee of that.

WOODRUFF: All right. Jon Karl at the Capitol. Thanks.

Democrats are also turning up the heat in the debate over energy policy. Up next: new criticism of administration plans to emphasize exploration over conservation.


WOODRUFF: Vice President Dick Cheney met today with House members -- Republican House members from California to talk about the administration's energy policy task force. Cheney made no public comments after the meeting, but several House Democrats made it clear today that they disagree with recent comments by Cheney and by President Bush. They say they expected the White House decision to promote increased energy supplies instead of energy conservation, and they think that will hurt consumers.


REP. BOB FILNER (D), CALIFORNIA: He was implying that, you know, you have to get the supply and demand curves. I mean, Economics 101 may be what he took at Yale, but it is not what is going on here. There is no market. There is no supply and demand curve. There is a cartel that controls the prices.



REP. ROSA DELAURO (D), CONNECTICUT: I thought I was watching a Exxon commercial. I think his remarks were very, very troubling. They create grave concerns about the direction of energy policy in the Bush administration. Supply-side energy policies worked about as well as supply-side economics. The people on the bottom end up footing the bill.


WOODRUFF: The lone Democrat in President Bush's Cabinet is Transportation Secretary Norm Mineta. As a former congressman from California's Silicon Valley, Mineta has a keen interest in the energy problems facing nation and his home state. He's also on Vice President Cheney's task force on energy.

Earlier today, I asked Secretary Mineta about some of proposed White House energy policies.

NORMAN MINETA, TRANSPORTATION SECRETARY: First of all, I think, given our experience in California, which is a shortfall of supply, I can understand why the vice president would take that approach. And when you think about, probably, in terms of all the production that you would need, I would imagine that conservation would be harder to pick up large amounts of new supply. But I think that the report will handle not only new production, but it will also deal with conservation. And it will also deal with environmental issues.

WOODRUFF: But vice president saying emphasis is going to be on production. Let me cite to you from something called the American Council for an Energy Efficiency Economy, estimating in a report this week that raising the fuel efficiency of cars and trucks -- light trucks, by what it describes as just a modest amount -- I know this is something you're very interested in -- "could do far more to reduce our national reliance on imported oil than drilling in the Arctic National Wildlife Refuge." That doesn't seem to support what the administration is doing.

MINETA: First of all, the Congress has imposed a moratorium on the Department of Transportation to even deal with the CAFE standard. So it seems to me...

WOODRUFF: These are fuel efficiency standards.

MINETA: Fuel efficiency standards -- and so until they lift that, I can't even look at the issue. So...

WOODRUFF: Are you trying to get them to lift it?

MINETA: In this energy task force, I have recommended that the administration get Congress to lift the prohibition.

WOODRUFF: And do you think that's going to be part of what is done?

MINETA: I'm hoping it will be, so I'm looking forward to the final report getting put together.

WOODRUFF: So you don't know what's in the final report yet. MINETA: Not right now, no.

WOODRUFF: OK. I just want to -- you mentioned California. That's your home state, of course, Mr. Secretary. The vice president yesterday talked about Americans one day will be going through -- he said very well could go through what California is going through.

There are some who are saying the administration, the president and the vice president with their background in the oil and gas industry, are using California to come up with an oil industry- friendly policy. Is that part of what's going on here?

MINETA: I wouldn't say that it was strictly based on, let's say, an oil-friendly practice. I think what they do look at is: What are our major sources of energy? And without a doubt, it is petroleum. And the question about -- our machines are already petroleum-based to the extent that we don't -- when you're looking at long-range, you can talk about alternative energy sources.

But when we're trying to deal with keeping something like what's happening in California from happening across the country -- and they're already talking about brown-outs in New York, so the short- term is to look at production source.

WOODRUFF: Your Department of Transportation, in your discretionary budget put forward by the administration, cut by more than 11 percent. Given everything your department is doing in the discretionary area, whether it's resolving disputes with the airlines, dealing with congestion on the roads and in the skies, how can you do this with this significant a cut?

MINETA: Well, first of all, the budget for the Department of Transportation has gone up 6 percent. What's happening is that when you take the amount of money that was in there for one-time projects in '01, then it gives it a distorted picture. So when you take a look at what we're going to get in '02, as compared to '01, it is up 6 percent. And so from road funding, airport funding, all those things that are really necessary for infrastructure, it's increased.

WOODRUFF: Just quickly, many Americans will be traveling in the skies this smear to go on vacation to visit family. What do they have to look forward to in terms of air traffic?

MINETA: Well, I think given the command center that is now set up in Herndon and the collaborative decision making between our FAA and the airlines, I'm hoping that the traffic system will be seamless, and that it will -- there'll be more congestion at the airports and in the air, but I'm hoping that this new collaborative decision-making will make it a smoother trip for everyone.

WOODRUFF: Last, but not least, what's it like being a Democrat in a Republican administration? How is this different from the Clinton administration?

MINETA: Well, I'm enjoying it thoroughly, and I can't say that I feel that much different in this administration as I did in the last administration. As I indicated, I'm chided more for being a Californian among a lot Texans than I am about being a Democrat.

WOODRUFF: All right, many more questions we'll save them for the next interview.

MINETA: Thanks, Judy.

WOODRUFF: Secretary Norm Mineta, good to see you. Thanks very much.


WOODRUFF: Mineta was, of course, commerce secretary under President Clinton.

INSIDE POLITICS returns in a moment with a political challenge for Republicans. Is California a lost cause? Ron Brownstein has a field report on election trends in the Golden State.


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

The new president of the Philippines today declared a state of rebellion, that after thousands of former President Estrada's supporters tried to storm the presidential palace. At least four people were killed, and more than 100 injured before security forces were able to push the crowd back. President Gloria Arroyo, currently in office, vows anyone plotting to overthrow her government will be, and we quote, "beaten to a pulp."

Around the world, leftist groups mark May Day as the international day of the worker. In European countries, clashes broke out between police and leftists opponents of globalization. In Cuba, it was a day to fill the streets in support of President Castro, who led the annual march that ended today at the U.S. government mission.

In Birmingham, Alabama, a jury of 11 women and one man, four blacks and eight whites, is deliberating the fate of an accused church bomber from the civil rights era. If convicted of first degree murder, 62-year-old Thomas Blanton could spend the rest of his life in prison. Blanton is one of four men tied to the 1963 bombing of the Sixteenth Street Baptist Church, a bombing that killed four young girls.

A new report says U.S. air pollution is getting worse. In cities where it is a problem, the number of ozone alert days is up sharply, and more Americans are living in the most severely polluted areas.

CNN's environment correspondent Natalie Pawelski has details.


NATALIE PAWELSKI, CNN ENVIRONMENT CORRESPONDENT (voice-over): Most Americans live in places where smog is a serious problem. That's according to a new report from the American Lung Association. JOHN GARRISON, AMERICAN LUNG ASSOCIATION: The problem with smog is that it gets into our lungs, it sears our lungs. It's like having sunburn inside our lungs, a very, very dangerous health problem.

PAWELSKI: The report, "The State of the Air 2001," says Los Angeles has the worst problem with ozone pollution or smog. Joining L.A. at the bottom of the barrel, three other California cities: Bakersfield, Fresno and the Visalia area. The Houston, Texas area is the fifth worst, followed by Atlanta; Washington-Baltimore; the Charlotte, North Carolina area; Knoxville, Tennessee; and the Philadelphia area, including Wilmington, Delaware, and Atlantic City, New Jersey.

(on camera): Smog season for much of the country officially starts today, and if you or anyone in your family has asthma or other respiratory problems, that person should stay inside on high ozone days. Children and the elderly are at a particular risk, and the lung association says people who exercise outdoors also need to be careful.

GARRISON: If you get an ozone alert, first of all, stay inside to the degree that you can. You certainly don't exercise. You certainly don't run. You stay inside and keep that smog from being inhaled into your lungs.

PAWELSKI (voice-over): Smog starts with pollution, mainly from tailpipes and smokestacks. Nitrogen oxides and hydrocarbons in those emissions react to sunlight and form ozone, the main component of smog. The lung association estimates 141 million Americans live in counties that get an "F" for ozone pollution, places where a hot summer's day can be hazardous to your health.

Natalie Pawelski, CNN.


WOODRUFF: Something to pay close attention to.

When INSIDE POLITICS continues, demographics and the Democratic advantage. Political analyst Ron Brownstein sizes up the electoral landscape of California.


WOODRUFF: As we noted earlier, California Democrats are criticizing the Bush administration's energy policy: this as Californians face the prospect of summer power shortages and $3 a gallon gasoline. But even if Mr. Bush does end up taking a hit in California as a result of the state's energy problems, it's not clear it would matter much in 2004, because Mr. Bush's prospects of stealing California from the Democrats are already pretty dim.

In this field report from Los Angeles, CNN's political analyst Ron Brownstein of "The L.A. Times" takes a closer look at the president's challenge.

(BEGIN VIDEOTAPE) RON BROWNSTEIN, CNN POLITICAL ANALYST: It's easy to forget that during the 1970s and 1980s, when the Republicans dominated the White House, California was the cornerstone of the GOP lock on the electoral college. From 1968 to 1988, the Republican presidential candidate carried California six for six, averaging over 52 percent of the vote along the way. Didn't hurt that they had Californians on the ballot for four of those six elections: Ronald Reagan twice, Richard Nixon twice. But the GOP had a firm hold on the big suburban counties all over the state.

Now the current has totally reversed. Democrats have carried the state three straight times, and along the way, the Republican presidential candidates have averaged just 37 1/2 percent of the vote. That's their weakest showing over a three-election cycle since the founding of the New Deal.

In 2000, George Bush invested somewhere between $10 and $15 million in the state and succeeded in narrowing the Democratic margin here from 13 points to 12 points, which is not much of a return on the investment.

What's changed? One key is the growth in the minority vote. When Ronald Reagan won here in '84, 84 percent of the California vote was white. By last year, that was down to about 70 percent.

The big growth has been among Hispanics. Just in the last 12 years, Hispanics have doubled their share of the California vote, from 7 percent to 14 percent. And even with all that growth, there's more growth coming.

The census found that almost 30 percent of California adults are now Hispanic, and as more of those Hispanics become citizens and register, they're going to be an even bigger presence on election day. That creates a real challenge for the Republicans.

Ever since proposition 187 in 1984, which tried to cut off public service to illegal immigrants, Republicans have been getting hammered by Hispanics at the voting booth here in California. In 2000, Bush put a lot of effort into reaching out to Hispanics, put out a lot of media, and he still lost anywhere from between two-thirds and three- quarters of Hispanic voters in California.

The strong tilt of Hispanics toward the Democrats have put the Republicans here in a real numbers crunch. When you combine that Hispanic vote with the overwhelming support for Democrats among African-Americans, it means that to win in California a Republican now has to run up almost as big a majority among white voters as Republicans do in Alabama or Mississippi. The problem is, politically speaking, California whites aren't Alabama whites.

In the 1980s, Republicans used a powerful complex of wedge issues -- taxes, crime, welfare -- to dominate among white voters. But as Democrats like Bill Clinton and Gray Davis and Al Gore have moved to the center, those issues have largely been neutralized. Now the most powerful wedge issues in California are social issues that work for the Democrats: guns, abortion, the environment, education. Those issues have been especially effective in moving upscale voters away from the GOP and toward the Democrats. Big affluent counties like Santa Clara and Marin that once tilted Republican now are providing lopsided margins for the Democrats.

When you take that vote, combine it with the minority vote and the continuing Democratic strength among white union members, you can see why the state has gotten so tough for the GOP.

The long-term question is whether Republicans can compete here again. The only real positive sign for Bush in 2000 was that he ran better in inland and rural areas, just as he did all over the country. But almost everywhere where you could see and smell the ocean, where the most socially cosmopolitan voters cluster, Al Gore still dominated.

But the last few elections here raise the question of whether Republicans can really regain the ground they need in the affluent suburbs with a nominee for governor or president who opposes abortion and gun control. It may be that the party has to change its positions on those issues before it can realistically change the dynamic in California.


WOODRUFF: And Ron Brownstein with a field report from Los Angeles. You can look for his next report in the coming weeks from the crucial battleground state of Pennsylvania.

Still ahead: What was on the videotape at the center of this last year's "Debategate" scandal? And was it worth the political uproar? Details when INSIDE POLITICS continues.


WOODRUFF: Now, the latest on the so-called "Debategate" scandal of the 2000 campaign. Next month, Yvette Lozano, a former employee of the Bush campaign's media firm, will face trial for allegedly mailing a videotape of debate preparations to supporter of Al Gore. The tape reportedly included the campaign staff prepping then candidate Bush for his encounters with Gore.

GOP media adviser Stuart Stevens, who participated in the debate preparation, has told "Talk Magazine" that press spokesman Karen Hughes during the campaign halted that particular session because it was -- quote -- "getting hot." But Stevens toned down his assessment, telling CNN that the tape was an ordinary debate prep session with nothing of particular note.

While Stevens says any tape of this nature could have been useful to the Gore campaign, he told CNN, quote, "You would just yawn if you saw this." Stuart Stevens.

Well, there's still more INSIDE POLITICS ahead. In the next half hour, echoes of Reagan. Jeff Greenfield on why President Bush hits familiar notes despite the many changes since the 1980s. That and much more ahead on INSIDE POLITICS.



Many critics of a proposed missile defense system say they still have questions and serious doubts about the president's plan, even after his speech on that topic today. Mr. Bush called for a new framework for national defense that he said would allow development of a missile shield. He steered clear of specifics on the possible cost, a timetable for deployment, or what the system might look like.

Mr. Bush did make it clear that he is prepared to abandon the 1972 anti-ballistic missile treaty with Moscow if it stands in the way of his defense goals.

WOODRUFF: Before his speech, Mr. Bush spoke by telephone with Russian Prime Minister Vladimir Putin who opposes U.S. development of a missile defense shield. Mr. Bush says that he assured Mr. Putin that his proposal is in the best interest of both their countries.

Mr. Bush announced today that he is sending high-level delegations to Europe, Asia, Australia and Canada -- to address criticism about his missile defense plan. CNN's Chris Burns reports now on the concerns on Europe and Mr. Bush's efforts to ease them.


CHRIS BURNS, CNN CORRESPONDENT (voice-over): President Bush began lobbying the Europeans even before he made his speech, making telephone calls to the leaders of Britain, France and Germany. And a charm offensive begins next week with high-level U.S. delegations visiting various capitals ahead of an early June summit with the Europeans in Sweden.

Mr. Bush will likely run into some of the same criticism his predecessor did, trying to sway the Europeans last year on missile defense. Back then, President Bill Clinton sought to calm European concerns a missile defense would mean the end of the antiballistic missile treaty that helped guarantee stability for three decades.

Europeans fear the collapse of the ABM Treaty would hurt ties with Moscow. Europeans also say it could encourage both the Russians and Chinese to build up their arsenals and spark, or reinflame, arms races in various regions, between India and Pakistan, for example. Europeans fear a U.S. missile shield could hurt trans-Atlantic ties.

With a fortress America immune to nuclear attack, U.S.-European defense interests could decouple. That, the Europeans say, could jeopardize NATO.

France is concerned missile defense could make its nuclear force de frappe obsolete. President Bush has offered to share missile defense technology, but European armies are already struggling to cut costs. Meanwhile, Mr. Bush will need at least tacit European support. U.S. radar facilities in Britain and on Greenland would need to be modified for missile defense.

President Bush says he wants to consult with his allies and with the Russians before acting. While some Europeans welcome that efforts, others fear they'll be presented with a feta compli.

Chris Burns, CNN, Frankfurt.


WOODRUFF: For more on the politics of missile defense, let's turn to our senior analyst Jeff Greenfield in New York -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Hi, Judy. As obvious already, the president's speech today will launch a debate across many fronts. Can a missile defense system work? How much will it cost? Will it lead to international cooperation or to conflict? Can we, should we, walk away from the ABM Treaty?

But there's no debate at all about one thing: the world today is a vastly different place from the way that it was the last time an American president proposed the idea of missile defense.


RONALD REAGAN, 40TH PRESIDENT OF THE UNITED STATES: The subject I want to discuss with you, peace and national security, as both timely and important.

GREENFIELD (voice-over): March, 1983: President Reagan speaks to rally support behind his defense budget and strategy. The focus on the world's only other superpower.

REAGAN: For 20 years, the Soviet Union has been accumulating enormous military might. They didn't stop when their forces exceeded all requirements of a legitimate defensive capacity. And they haven't stopped now.

GREENFIELD: It was the Soviet Union, with its thousands of bombs and missiles that was the threat. Now listen to the way President Bush describes the threat today.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Iron Curtain no longer exists. Poland, Hungary, and the Czech Republic are free nations and they are now our allies with NATO, together with a reunited Germany.

Yet, this is still a dangerous world. A less certain, a less predictable one.

GREENFIELD: For Bush, the foe is not a superstate hungry for world domination, but a collection of nations animated by emotion.

BUSH: They hate our friends. They hate our values. They hate democracy and freedom. And individual liberty. Many care little for the lives of their own people. In such a world, Cold War deterrence is no longer enough. GREENFIELD: In 1983, Reagan was also arguing that deterrence was not enough and made his case for a strategic defense initiative with a sweeping picture of potential security:

REAGAN: What if free people could live secure in the knowledge that their security did not rest upon the threat of instant U.S. retaliation to deter a Soviet Attack, that we could intercept and destroy strategic ballistic missiles before they reached our own soil or that of our allies?

GREENFIELD: The Bush vision reflects the premise that today there is no conceivable threat of a massive missile attack. It is, by definition, more modest:

BUSH: The secretary has identified near-term options that could allow us to deploy an initial capability against limited threats.


GREENFIELD: Now, two decades ago, we were told that we needed to defend ourselves against a nation with the capacity quite literally to wipe our civilization off the face of the earth.

Today, we are told that we and our allies need to defend ourselves against any number of nations whose capabilities we do not even know. It's hard to imagine anyone in the early 1980's could possibly have imagined that the terrain of 2001 would look anything like this -- Judy.

WOODRUFF: Jeff, and in a political question, how is the president -- how are the political constituencies that this president needs to keep close to him to keep on his side going to react to this?

GREENFIELD: Well, this, I believe that in part, if you simply want to look at the politics of it, you would note that the missile defense system, in whatever form, has been part of the conservative cannon ever since Ronald Reagan, going back 20 years.

He promised this during the campaign, he mentioned it during the inaugural. I think that politically this is another example of President Bush making sure that the conservatives believe that he is fulfilling his pledges particularly to them.

What it does is that it does in one sense rekindle a kind of 1980s debate about cost and capability. Back then, not only Democrats, but some Republicans, were saying of President Reagan's plan, this is literally beyond our capability and even now, in a more modest plan, the president today was in pains to say, look, we will find out what works, find out what doesn't work, because the threat of spending a lot of money on something that may not work is never a politically potent position to be in.

WOODRUFF: All right, Jeff Greenfield in New York. Thanks.

Missile defense is just one of many issues that are helping to define President Bush's global view. Our senior White House correspondent John King looks at the international challenges that emerged during his first 100 days of the Bush presidency.


KING (voice-over): Day 26: Wheels down Mexico, carefully choreographed first steps on the world stage. But just hours later, air strikes against Iraqi air defense facilities. This president, like so many before him, quickly tested in an arena in which he had little or no experience.

This is one lasting image of the first 100 days, an introduction for Mr. Bush to the raw emotions of the global trade debate. And once again, violent reminders from the Middle East that peace remains but a dream.

This, the biggest international challenge so far: a U.S. surveillance plane on the ground in china after a midair collision, its crew held against its will: a new president and a new team caught off-guard by China's hard line.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: We were very surprised, I think, because from our point of view, this was an emergency landing of an aircraft that had been rammed over international airspace, and so what we really expected was that the Chinese would probably look at the plane and return the crew.

KING: Instead, the standoff lasted 11 days, and not long after the crew came home, the president had a surprise of his own.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I will do what it takes to help Taiwan defend herself, and the Chinese must understand that.

KING: The Bush team called it no big deal, but it was a break from the deliberately vague language of U.S. presidents dating back more than 20 years.

LEE HAMILTON, WOODROW WILSON CENTER: The benign interpretation, the charitable interpretation, is that it was a rookie mistake by a president responding to a question that he perhaps did not anticipate in a news interview and giving only a partial answer to a very complex policy question.

KING: The message here was continuity in a relationship both Washington and London term special, but European allies are skeptical of Bush plans for a new missile defense and upset he opposes the Kyoto treaty on global warming. South Korea's president walked away disappointed, told this White House was stepping back from the Clinton administration's approach to North Korea.

HAMILTON: I think you are seeing now in Europe and in Asia a certain unease with the president's foreign policy. It's not something that has gotten out of hand, it's not unmanageable, but I do think it is serious.

KING: The president's team say Mr. Bush should not be criticized for candor. RICE: I think that our allies understand that we are an administration that is realistic, that's straightforward, and that really gives others the respect to tell them what we think and to listen to what they think. We're not always going to agree.

KING: There are more tests just ahead: Selling missile defense to skeptical allies, trade with China to a skeptical Congress, and two trips to Europe before his administration hits the 200-day mark.

John King, CNN, the White House.


WOODRUFF: Still ahead on INSIDE POLITICS, suspense on the sets of America's television shows as writers negotiate for a new contract. The latest from Tinseltown just ahead.


WOODRUFF: In Los Angeles today, negotiators are working overtime to avert a strike by the Writers Guild of America. With just hours until the contract with television and film writers expires, Mayor Richard Riordan is calling for an agreement to protect the economy of the city. So far, the union has not authorized a strike, but the mere prospect of a work stoppage has rattled the nerves of many in Hollywood.

CNN's Lauren Hunter reports.


ROBERT EISELE, WRITER: How did the script go? Did you guys get it out?

LAUREN HUNTER, CNN CORRESPONDENT: Robert Eisele is the executive producer and writer on Showtime's "Resurrection Boulevard." He's been a member of the Writers Guild since 1980. He weathered the strike in 1988. And though he hopes a strike will be averted this year, is willing to walk the picket line if necessary.

EISELE: Although I respect a lot of executives, they would do not -- be nothing, do nothing, have nothing were it not for us. It's ultimately the artists -- actors, writers, directors, and others, who create this product.

UNIDENTIFIED MALE: Pictures up. Here we go.

HUNTER: On hundred and eighty-five thousand people in Los Angeles work directly in film and TV production. Thousands more provide support services from caterers to make-up artists to prop houses. And it seems everyone is worried about the economic impact of a strike.

DOUGLAS WICK, PRODUCER: You feel the anxiety all around you. Every time you get a ride from the airport from any one of the companies, the car companies, they're nervous. The florists are nervous. The restaurants in the middle of L.A. (UNINTELLIGIBLE). They are all nervous. The trickle down will be devastating.

HUNTER: The mayor of Los Angeles estimates a prolonged strike could cost the city $4.4 billion in revenue and more than 81,000 jobs.

MAYOR RICHARD RIORDAN, LOS ANGELES: Time is running out. Once again, I call on the producers and writers to work together in a spirit of compromise and save tens of thousands of Los Angeles jobs from the cutting room floor.

HUNTER: As writers and producers continue to meet behind closed doors under a news blackout, it's unlikely that audiences would see an immediate change if a strike is called. TV networks and movie studios have worked for months to stockpile material.

MARTIN GROVE, "THE HOLLYWOOD REPORTER": Bottom line: Hollywood is worried. Nobody wants to see this very healthy industry, you know, just put flat on its back.

HUNTER: And though the writers contract officially expires at midnight, union leaders have not called for a strike authorization vote. And as long as talks progress, writers can continue working without a contract. So it could be a while before Hollywood productions fade to black.

Lauren Hunter, CNN Entertainment News, Hollywood.


WOODRUFF: For the latest on the talks and the issues in the negotiations, let's turn to CNN's Thelma Gutierrez in Los Angeles.

Thelma, where do things stand at this hour?

THELMA GUTIERREZ, CNN CORRESPONDENT: Well, Judy, as you know, there has been a news blackout since April 17th, which is when both parties came back to the bargaining table. Now, talks began this morning about 10:00 a.m., but so far, neither side has given us any indication whatsoever whether any progress has been made.

But one thing that we can report is that an area in the WGA headquarter, right behind me, has been set up for a news conference, and so many people here are speculating that maybe this may be some kind of an indication that both sides are finally ready to break silence and tell us, number one, whether the Writers Guild and the Alliance of Producers have finally reached some kind of settlement. No. 2, that the industry's best, last and final offer is not good enough and that the writers will have a vote to strike. Or No. 3, that simply talks are progressing in the right direction, that they are still talking and that the talks will extend beyond the 12:01 deadline tonight and resume into tomorrow.

Now, again, if that happens, the WGA contract automatically extends and the writers continue to work. And that's the latest from WGA headquarters.

I'm Thelma Gutierrez. Back to you, Judy. WOODRUFF: Thelma, can you just clarify for us, is this all about money and nothing but money or what?

GUTIERREZ: Well, Judy, one of the main issues has been money. It's a question of the residuals that the writers will be paid. The writers are hoping that they will get a fair share, they say, of the quote, "new market," the DVD sales, the videocassette sales, the foreign and cable distribution and reruns of their programs that they write.

There are creative issues as well, but the main issue has been the residuals that the writers are paid.

WOODRUFF: All right, Thelma Gutierrez in Los Angeles. Thanks very much.

And ahead on INSIDE POLITICS: The politics of money. From Wall Street to towns across America, it is no longer simple to predict which party appeals to the rich and the poor.


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

WILLOW BAY, CNN ANCHOR: Hello, Judy. Just ahead on "MONEYLINE": as you know, congressional Republicans make a deal, a tax cut number they can live with. We'll go live to Capitol Hill for the details. Now, President Bush has called this "a great day for the American taxpayer," but what does House Majority Leader Dick Armey has to say? He'll be our guest.

And on Wall Street, a powerful rally, both the Dow and the Nasdaq were ahead. Those stories and more next on "MONEYLINE." INSIDE POLITICS continues right after this.


WOODRUFF: Florida Governor Jeb Bush today signed a law that prevents local governments from suing gun manufacturers. The measure protects gun makers from taxpayer-funded lawsuits that are linked to gun-related injuries and deaths. Individual citizens, however, will still be allowed to sue the gun makers. The new law makes Florida the 26th state to restrict lawsuits against firearms manufacturers.

As the nation focused on the overtime ending to the 2000 presidential election, an interesting change in the nation's electorate went largely unnoticed. Certain voters who traditionally have voted for the same party year in and year out, appear to be changing their allegiances. CNN's national correspondent Bruce Morton takes a look at the trend and what it means to party politics.


BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): One of the oldest, truest rules in politics used to be: rich folks vote Republican, poorer people vote Democratic. Not in the 2000 election, though. Poor blacks stayed Democratic, but...

KEATING HOLLAND, CNN POLLING DIRECTOR: Poor whites also used to vote Democratic. In the 2000 election, we didn't find that to be the case, particularly in a couple of key states like West Virginia, Tennessee, Arkansas, all of which should have been in the Democratic column, and weren't.

MORTON: Why? Probably because the economy had been so good for so long, voters felt free to worry about other issues. Guns and gun control, for instance, a regional issue: 40 percent of Southern households own guns, less than 20 percent in the North.

JOE LENSKI, EDISON MEDIA RESEARCH: So, you'll see the suburbs that Democrats did well in, the suburbs like Montgomery County in Philadelphia, or suburbs of Cleveland, which may have low gun ownership, ended up being more Democratic, while the suburbs of Atlanta, or Dallas, or Houston, that would be higher gun ownership, ended up being more Republican.

MORTON: And polling data also suggests the gap may be more education than economic status.

HOLLAND: The most reliably liberal group of white voters in this country are those with the highest educational attainment. People with postgraduate degrees are very liberal and very reliably Democratic.

MORTON: Another social issue which mattered in some races: abortion. And that's linked to a marriage gap. Married people are more Republican; singles more Democratic.

LENSKI: Single women and single men are much more interested in the abortion issue, and are much more likely to be pro-choice than married men and married women.

MORTON: Abortion may relate to another gap. People who say they're regular churchgoers are more Republican than people who say they aren't. And that relates to still another gap. Urban whites tend to be Democratic; rural whites, Republican.

HOLLAND: Urban people have a tendency to be less churched, less religious. Rural people, the church, their religion, is in many ways the center of their community, the center of their sense of personal self.

MORTON (on camera): What does this mean for elections to come? If the economy stays strong, the parties will have to take account of these other divisions, recruiting socially conservative candidates, say, to run in Southern areas, or rural districts.

If they economy turns sour, if a recession looms, that will almost certainly be the number one worry once again. You can just get out all those "it's the economy, stupid" signs from the 1992 campaign, and concentrate on that. Bruce Morton, CNN, Washington.


WOODRUFF: And that's all for this edition of INSIDE POLITICS. But, of course, you can go online all the time at CNN's, AOL keyword: "CNN."

Also on, you can find an in-depth look at President Bush's missile defense plan. And this programming note: Defense Secretary Donald Rumsfeld discusses the president's missile defense strategy tonight on "WOLF BLITZER REPORTS," that's starting at 8:00 Eastern.

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



4:30pm ET, 4/16

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