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CNN INSIDE POLITICS

Exploring Chandra Levy's Disappearance, Condit's Character; Cheney Meets Privately With Democrats; Ferraro Addresses Congress on Cancer

Aired June 21, 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)

BILLY MARTIN, ATTORNEY FOR LEVY'S PARENTS: We would ask Congressman Condit and anyone else with information to please come forward.

(END VIDEO CLIP)

ANNOUNCER: With their new lawyer, the parents of missing intern Chandra Levy search for answers in Washington, and we'll explore the question: Who is Congressman Gary Condit?

Plus: the inside story on Vice President Cheney's private meeting with Senate Democrats.

And Geraldine Ferraro on her cancer and her will to live.

(BEGIN VIDEO CLIP)

GERALDINE FERRARO, FORMER VICE PRESIDENTIAL CANDIDATE: So that I can be invited to the inauguration of the first female president of the United States, senators.

(END VIDEO CLIP)

ANNOUNCER: Now, Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Chandra Levy's parents say they had a productive meeting with the Washington, D.C. police. Now their lawyer says they would welcome a conversation with Congressman Gary Condit. The Levy's public appearance today has added to the already intense interest in their daughter's disappearance more than seven weeks ago.

And it has added to the scrutiny of Condit and his relationship with the missing intern. For the latest on this case, let's go to CNN's Bob Franken, who is outside police headquarters here in Washington -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Actually, Judy, we have moved to the Watergate office complex, because that is where the Levys are right now, where their attorney Billy Martin has his office. They are in meetings.

Several developments: First of all, as you pointed out, there was the meeting with the police before. Billy Martin, the attorney, and the Levys said they wanted this investigation upgraded from a missing persons investigation into a criminal investigation. The police said that there was no reason to do so, no signs of foul play.

Of course, we're talking about Chandra Levy, the 24-year-old former intern at the Bureau of Prisons who disappeared April 30, and we're talking about Congressman Gary Condit and all the accusations that have been made that he had a romantic relationship, something that is denied daily by his office.

Now, just a very short time ago, just a couple of minutes ago, Condit's office put out a statement saying: "I met with police officials as soon as Chandra Levy was reported missing, and I answered their questions. I have spoken with the police again and reached out to Ms. Levy's parents. If there is any new information that I can provide, I will do so without hesitation."

Of course, the interesting thing is that the police sources are telling us that the second interview with Congressman Condit has not yet occurred, so there is a little bit of puzzlement over his comments here that, in fact, he had met with police officials or spoken with police officials before. One police source said that could have been nothing more than a telephone call. So, there is a little bit of confusion about whether Congressman Condit will, in fact, meet with the police once again.

As for the meeting that both sides say that they want, between the congressman and the Levys, there is no indication yet that that is going to happen. Our last word is that the Levys would be leaving Washington this evening. As far as any relationship between the congressman and the intern, the Levy's new lawyer really was kind of vague about that.

(BEGIN VIDEO CLIP)

MARTIN: The congressman has indicated that they were friends. As a friend, we reiterate, please come forward, please meet with the police, please tell anything that you can regarding Chandra. We have no further comments.

(END VIDEO CLIP)

FRANKEN: Now, of course, there is so much speculation about Congressman Condit and his relationship with Chandra Levy, but at its core of course, this is the story of parents that are frantic about the disappearance of their daughter, so we had a frantic plea from Susan Levy.

(BEGIN VIDEO CLIP)

SUSAN LEVY, CHANDRA LEVY'S MOTHER: As you know, we as parents are very heartbroken, as we don't know where our daughter is. But I believe and I continue to hope and pray that she will come back to us alive.

(END VIDEO CLIP)

FRANKEN: Now, of course, there was tremendous media interest in all the events of today. There has been tremendous media interest, and Congressman Condit in his statement said he hoped that there could be an end to what he called "the tabloidization of these terrible circumstances" -- Judy.

WOODRUFF: Bob, just to clarify: Congressman Condit is saying he's been cooperating with police, he is prepared to cooperate more; but you are saying that police say they have been unable to get a second interview with him?

FRANKEN: Police do not say exactly that. What they say is -- the sources say that it has not yet occurred, and what Congressman Condit says is if he has any new information he can provide, he would do so without hesitation.

WOODRUFF: And Bob, on the point of this being a missing persons case at this point and the Levys wanting to move it to a criminal case, what technically is the difference between the two?

FRANKEN: Well, according to the police, what would put it over to the other side would be evidence of foul play. The police are emphatic. We had conversations with several of their top officials; they say they have no evidence of that, and of course one could argue that that would be good news for the parents of Chandra Levy.

WOODRUFF: All right, Bob Franken reporting on the very latest on the disappearance of Chandra Levy. Thanks Bob.

On Capitol Hill today, a first in the evolving relationship between the White House and the new Democratic majority in the Senate. Vice President Dick Cheney met with a Senate Democratic caucus over lunch. That's right, the Democratic caucus.

All involved seemed eager to publicize the event, allowing cameras in briefly before the private meeting. Participants say the get-together was cordial and produced no sparks. Even before it started, Majority Leader Tom Daschle said he did not expect the session to lead to any big breakthroughs. For his part, Vice President Cheney portrayed the lunch as a visit with old friends.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: I noted today as we were getting ready to come up here that out of the -- I guess, 50 Democratic senators, 17 are former colleagues from my time in the House, so it's not strange territory for me. But I'm delighted to be here, I think it's good practice and I really do appreciate the invitation.

(END VIDEO CLIP)

WOODRUFF: Vice President Cheney was invited to the lunch by the chairman of the Democratic Policy Committee, Senator Byron Dorgan. Senator Dorgan joins us now from Capitol Hill. Senator, did this turn out to be a useful meeting?

SEN. BYRON DORGAN (D), NORTH DAKOTA: I thought it was a good meeting. You know, many of us have known Dick Cheney for a long, long while. And this is a split government. You know, the president won by a whisker, the Senate is now 50-49-and-one. The House is almost evenly split. The way to get things done is to work together and get to know each other a little better, and I thought it was a really good gathering today at noon.

WOODRUFF: Did you sense any breakthroughs, any differences in the administration's position on anything, or clarifications?

DORGAN: No, but you know what was different, is people were sitting around a large square table. Almost all of the Democrats in the Senate were there, and the Republican vice president, and instead of talking at each other through the press, they were actually visiting back and forth and exchanging views. Some of the views were asked in the form of a question, but it was really a discussion about a wide range of really interesting issues, you might guess, from energy to military issues and other things.

But it was thoughtful and interesting just to hear people discuss things not so much the way they are done publicly, but privately, just talking about their view and why they hold the view they do. I think it's a very useful thing for us to be talking back and forth. That may not be strange and unusual -- it is, unfortunately, but it should not be.

WOODRUFF: Senator, our Capitol Hill producer Dana Bash spoke with a number of senators after the meeting, and they reported to her that there seemed to be some movement in the administration's plans to deploy a missile defense system. What did you read on that?

DORGAN: Well, the discussion we had was off the record, and you know, press was not there, and we had -- the ground rules were, we were going to keep it off the record.

It is safe to say that we discussed those areas, but I think it's also safe to say that we didn't have a lunch for the purpose of reaching agreement on specific issues. We did have some lengthy discussions about a number of issues, and I think it's useful to do that.

WOODRUFF: Well, let me ask you about this: to be specific, your colleague Senator Carl Levin, who is chairman of the Armed Services Committee, told our producer Dana Bash, he said "the vice president's remarks confirmed his suspicions that the administration is changing its former hard-line calls to abrogate the Anti-Ballistic Missile Treaty in order to build national missile defense." Did you come away with that sense?

DORGAN: Well, I'll let Carl characterize that. You know, we had a discussion about national missile defense, and there was a series of questions asked about, you know, would you or could you try to deploy a system that doesn't work, and the answer logically is, you know, you can't deploy a system that doesn't work. And we had that lengthy discussion back and forth.

But again, this was not a lunch gathering in which we were going to try to find answers to problems. We were trying to exchange views on some very complicated and complex issues, and I thought it was a really good opportunity to do that.

WOODRUFF: Well, I don't want to beat a dead horse, but did you get the sense now that instead of moving ahead very quickly, which was the sense we were getting just a couple of weeks ago, that there is a desire now in the party administration to perhaps slow down and move with somewhat more -- at a more thoughtful pace on this issue?

DORGAN: Well, Judy, the thing is, I don't want to -- I don't think anything occurred in this luncheon, including the responses of the vice president, that represented abrupt change or a significant change in what they've been discussing.

Once again, it's a little difficult, because we had a private luncheon today. I thought it was very well done. I appreciated the vice president coming, and -- but I think even on these issues of missile defense, it was very useful for us to have some back-and-forth discussion.

WOODRUFF: And just quickly too, senator, on the subject of energy, one of your colleagues said there seemed to be some movement there on the environmental standards for SUVs, sport utility vehicles. Did you pick any of that up?

DORGAN: We had a discussion about some of those issues, just an exchange of views between the vice president and members of our caucus.

You know, incidentally, I invited President Bush to come and visit with the Democratic caucus in January. He did that. And now, we've had the vice president. This ought not be the exception, it ought to be the rule for us to talk more.

Occasionally we'll debate and have disagreements, but that's the way democracy works. Where we can, we ought to work together.

WOODRUFF: Finally, senator, I'm told the patients bill of rights surprisingly did not come up. Why didn't it?

DORGAN: Well, we're discussing it on the floor of the Senate from morning until night every day, and there was a great deal of discussion about other things, but patients bill of rights, of course, is an issue that is front and center. But we were debating that on the floor of the Senate even as were having lunch. We had others on the floor dealing with that. That will go on until at least the end of next week, and we hope very much to pass the patient's protection act or the patients bill of rights.

WOODRUFF: And you know the president is still saying, even today, that he plans to veto it unless it is changed significantly from the current Kennedy-Edward-McCain version.

DORGAN: Well, it's already been changed three of four times. This is a compromise and, in fact, it's about the same kind of legislation that he let become law in Texas without his signature. But I hope very much we'll get this passed and I hope he'll reconsider and sign it. This is good for the American people and it's long past due. We have been debating this now for three or four years. We ought to pass a patients' protection act.

WOODRUFF: All right, Senator Byron Dorgan, thank you very much. Good to see you, Senator.

DORGAN: Thank you, Judy. Good to see you.

WOODRUFF: We appreciate it.

And now from the administration view of that private meeting, the counselor to the vice president, Mary Matalin, joins us from the White House.

Mary Matalin, do you and the vice president have the same view of this meeting as we heard from Senator Dorgan?

MARY MATALIN, COUNSELOR TO THE VICE PRESIDENT: Judy, only in Washington can two people, four hours after it happened, be talking about what happened in an off-the-record lunch.

We very much appreciate the senator inviting us. This has been long in the works to have the vice president meet with the whole Senate caucus and got canceled for a number of reasons, and it's part of the ongoing process of trying to put together relationships and coalitions for each and every issue.

Obviously, the vice president had met separately with all the energy senators, and a number of Democratic senators on a number of issues, and interestingly, of the 50 senators there, 17 of them had served with the vice president in the House. So it was a very collegial and cordial and interesting lunch.

WOODRUFF: Mary, I know you heard Senator Dorgan say he couldn't say much in the way of substance, but let me ask you directly, based on what senators told our producer, Dana Bash, among them Carl Levin, that he senses movement on the part of the administration not to move so quickly toward implementing a national missile defense system and also not moving so quickly to abrogate the ABM treaty.

MATALIN: The vice president restated the president's oft-stated policy on where we are on missile defense. We're in a post-Cold War world and he wants to establish a different framework for protecting the peace. He wants to have protection with our allies against rogue missile attacks.

And the vice president repeated that position. There wasn't news made or any positions changed, and I did overhear the senator from Michigan speaking to the press after the lunch, and suggested that we said something new, when we said we weren't going to -- weren't suggesting something that didn't work. I don't think that's news and as Senator Dorgan just said, it's kind of logical that nothing could be deployed that didn't work.

But what the vice president did say, and also is not news, is that we need flexibility to research and develop missile defense.

WOODRUFF: Well, is it accurate to say, Mary Matalin, that the administration is now moving away from a position of feeling it needs to have a crash program, if you will, to get some sort of missile defense system in place, to something that will take place over a longer period of time, over two or even three years, perhaps, and that it is going to be more careful about abrogating the ABM?

MATALIN: The vice president neither advanced nor pulled back on the president's stated position on missile defense. I don't know that anybody here has ever described it as a crash course.

WOODRUFF: Well, I'm not asking what the vice president said today, but I'm asking for your understanding of what the administration position is on this?

MATALIN: No. My understanding is, as you understand it, as the president stated it in his very successful trip to Europe.

WOODRUFF: What about, Mary, what about -- on the sense of energy and whether there was any movement -- any indication of movement now on being more willing to have stiffer environmental standards when it comes to emissions on SUVs?

MATALIN: Again, the vice president restated what we had recommended to the president in the national energy plan, which is, we have to wait for the National Academy of Sciences to come out with their read on this, and I believe they are due to do that in July.

And there is just nothing more for us to say until that happens. There is clearly a lot of overlap. When you get behind closed doors and you get removed from those opportunities for demagoguery, and you get with people who know something about energy as the vice president has before, not just in the meeting, with the Democrats on the Energy Committee, there is a huge overlap between our plan and what's in Senator Bingaman's plan and Murkowski's plan on energy.

It's very balanced, there is a lot of conservation, energy efficiency, and clean production and infrastructure. So we are all kind of on the same -- and the legislation is going to start moving through the House and through the Senate soon.

WOODRUFF: Mary Matalin, let me finally ask you about patients' bill of rights. As we know, it did not come up in today's meeting, but I know you heard Senator Dorgan say this is something he and other Democrats feel is crucial. He described this legislation that the president says he would veto if it's not significantly changed, as legislation very similar to what the president let pass or let be enacted into law when he was governor of Texas.

MATALIN: Except for some key provisions. What the president has been doing since the opening days of this administration is working very hard behind the scenes and in front of the scene he wants patient protection, he wants universal protection. He doesn't want a patients' bill of rights that is going to open up the floodgates to the courtrooms, line the pockets of trial lawyers.

He wants patients to be able to get quality care, not grease them into the courts, and that's what this legislation does. He also does not want -- and this is what this legislation still contains and the Texas legislation did not, employers need protection too or they are simply not going to provide insurance or coverage for their employees. That just won't happen, so what happens? People won't have insurance, won't have coverage, won't get care.

And the president very much wants in a bipartisan way to get down the middle here and get this done, which is patient protection and quality care.

WOODRUFF: And just quickly, the president in line with the Republican leadership in the House coming up with language that's moving away from what he has endorsed the patients' bill of rights?

MATALIN: The -- I'll say again, the president set out his principles and those are there be quality care, not courtroom access, and there is access to the courts but the key thing is people need care when they want it and everybody should be able to get it.

WOODRUFF: And finally, Mary Matalin, the meeting today between Karen Hughes, senior counselor to the president, and Senator John McCain, any word on what came out of that session?

MATALIN: Well, they are good friends and Karen's son is a great admirer of Senator McCain as many of us are. It's part of, we're just continuing on with our close relationships with everybody on the hill, of all stripes, that are going to help us pass the president's agenda for America.

WOODRUFF: Sweetness and light everywhere we look. Mary Matalin, counselor to Vice President Dick Cheney. Thank you very much.

MATALIN: Thanks, Judy.

WOODRUFF: We appreciate it. Good to see you.

And now, to the political battle over patients' rights. As formal debate got underway in the Senate today, Republicans began trying to bombard a Democratic-backed bill with a series of controversial amendments. That measure also was the target of a renewed veto threat as we just heard, by President Bush.

And, as CNN's Patty Davis explains, lobbyists on both sides of the issue also got into the act.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): As debate officially began on the patients bill of rights, a lobbying blitz. Supporters of the Democratic-backed plan parked an ambulance outside the Capitol, complete with electronic ticker, to make their point that HMO patients are being denied care.

RON POLLACK, FAMILIES USA: So far, over 7.5 million people have experienced such a denial or delay of medical care since President Bush took office.

DAVIS: The HMO's chief lobbyist worked to shore up the opposition.

KAREN IGNANI, AMERICAN ASSOCIATION OF HEALTH PLANS: We are trying to pierce through to get our message across that we need a plan that's workable, that's effective for patients.

DAVIS: The real fight was going on inside.

SEN. JOHN MCCAIN (R), ARIZONA: I find it incredible that HMOs and their employees are able to avoid responsibility for negligent or harmful medical care.

DAVIS: Both sides agree access to emergency room care and specialists needs to be guaranteed. But there is sharp disagreement over the right to sue. The Democratic-backed bill allows patients to sue in both federal and state court. In federal court, it caps punitive damages at $5 million, but places no limit on awards for pain and suffering.

SEN. JOHN EDWARDS (D), NORTH CAROLINA: It's time to give real rights to patients, and that's what this legislation is about. Its time to put the law on the side of families, patients and doctors.

DAVIS: The Republican-backed alternative would limit lawsuits to federal court, ban punitive damages and limit awards for pain and suffering to $500,000. Republicans also warn the Democratic-backed bill would open employers up to lawsuits.

SEN. DON NICKLES (R-OK), MINORITY WHIP: It's not a patients' bill of rights, it's a trial lawyers right to bill and the net result is you are going to have a lot of litigation, a lot less health care.

DAVIS: Democrats say that's not true. Meanwhile, President Bush is reiterating his threat to veto the Democratic-backed bill as both sides take to the airwaves trying to sway senators and public opinion.

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR: Contact your senator today. Tell them Kennedy-McCain doesn't help families.

UNIDENTIFIED FEMALE: It hurts.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR: There's no reason why these multi billion-dollar companies should be above the law, and it's costing people's lives.

(END VIDEO CLIP)

DAVIS (on camera): House Republican leaders are working on a compromised bill of their own that would allow patients to sue in state court, but on a limited basis. It's an effort to break a deadlock on the most contentious issue as lawmakers in both parties try to deliver on one of voters top priorities.

Patty Davis, CNN, Capitol Hill.

(END VIDEOTAPE)

WOODRUFF: The governor of California goes on the defensive once again.

(BEGIN VIDEO CLIP)

GOVERNOR GRAY DAVIS (D), CALIFORNIA: Get money back for our citizens who have been grossly overcharged.

(END VIDEO CLIP)

WOODRUFF: Ahead, why a state official refuses to pay these two men hired by Gray Davis. Plus, a presidential visit to Dixie, and a veto threat. The president's policy warning from his stop at an Alabama state park.

This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Federal energy regulators have issued a dire forecast for energy-strapped Western states this summer: Expect more blackouts. On Monday, the Federal Energy Regulatory Commission announced that it would implement a plan to help reduce price spikes for wholesale electricity.

But California Governor Gray Davis says more needs to be done to keep outside suppliers from gouging his state as it struggles with its energy crisis. Joining us now, the chairman of the Federal Regulatory Commission, Curtis Hebert. Mr. Chairman, thank you for being here.

CURTIS HEBERT, FERC CHAIRMAN: Thank you, Judy. Good to be here.

WOODRUFF: Let me ask you first of all whether you believe what your agency, your commission, has done so far is enough, or do you think there's going to be more? You've just this week implemented these price mitigation measures and expanded them to include more of the Western states. Is that going to be enough?

HEBERT: Well, I think it's enough for now. What we are doing right now is we're looking at California, we're looking at the West. What we're finding is that as we move through this process of markets it's somewhat of an evolution. But it's enough if everyone does what they need to do. You got to bring more supply into California, we've continued to say that. That has to be done.

We have to improve infrastructure. We've got constrained transmission networks both on the electric and on the gas side. So those have to be remedied. And the state can do that, the federal government can not do that. But what we have done this past Monday, what we had done a couple weeks prior to that is, in fact, put a mechanism into place that will keep rates at reasonable levels, while at the same time attracting investment for supply and infrastructure.

WOODRUFF: So you're are not ruling out something more than that this?

HEBERT: I never say never. But I believe what we've done right now certainly should get California and the West on its feet. But then again, bringing in that supply is something only the people of California can do. We can't build a generating plant, we can't require one to be there.

The numbers we're looking at as far making certain we've got adequate supply are given to us by the state of California. They released some numbers to us in April, through the governor's office saying they would have 5,000 megawatts delivered for the end of summer, now they've amended those and say they're not going to have it. They are going to have 2,300.

So we need them to bring on the supply because that's what's going to help consumers in California.

WOODRUFF: Well, they say they are building plants, they say they're stepping up conservation efforts. You are saying they are still not doing enough, is that what you are saying?

HEBERT: I'm saying that they said they would build 5,000 and bring 5,000 by August. Now they've amended that and said, we're not going to get 5,000 done, we're going to get 2,300 done. There is a big difference in saying you're going to get it done and getting it done. As you know, I come from Mississippi and we have a slogan for that: There are a lot of people talking the talk, but there are not too many walking the walk.

We need some people in California to walk the walk to keep the lights on for the people of California and their keep rates at reasonable levels.

WOODRUFF: I assume one of the people you are talking about is Governor Gray Davis who is, as you know, asking your commission to help make sure the people of California get at least a $9 billion rebate. He says this is the minimum that should be given back to the people of California, because they are having to pay $25 billion for electricity this year, $50 billion next year, that this is just a fraction of what the people deserve.

HEBERT: I'm certainly not in this for the governor or for anyone else. I'm in this specifically for the people of California, the people of the West and the people of America. That is our role, that is our job. I don't know where they come up with this $9 billion figure. They had around a $7 billion figure earlier that when the truth came out the only amounts that were jurisdictional to our agency was $1.3 billion. So they continue to throw out these funny figures. Is it real, is it not? I can't speak to that. I will tell you, we have sent this to a settlement judge, we have recommended that the settlement judge give them 15 days to settle these disputes.

If it's not reached in 15 days the settlement judge has 7 days to recommend to the full commission what needs to be done.

WOODRUFF: When they say people, somebody out there is making outrageous profits and they need to give some of the money back, do you agree with the governor's assessment there?

HEBERT: What the commission found and we found this December 15, was that rates were unjust and unreasonable at certain times and under certain conditions. That is in fact why under this administration, I became chairman January 22. We issued the first refunds after that, almost $130 million worth of refunds.

Refunds had not been established prior to that date. We are continuing to work forward. We're continuing to do what we thing is in the best interest of California and the West. That not only means talking about prices. That also means talking about bringing adequate investment in to make sure that there is enough electricity there, enough natural gas there to keep the lights on, while at the same time keeping rates reasonable.

WOODRUFF: Without getting into this blame game which everybody is talking about the last few days.

HEBERT: Yes, and I'm not interested in that.

WOODRUFF: Chairman Hebert, let me ask you about this view that the governor has put forward. We had his energy adviser, Mr. David Freeman, on this program yesterday. What they are saying is that FERC, your commission, has had the responsibility to do something about this sooner, and they say this is in the tradition of the federal government having a role in regulating electricity prices, and saying that FERC should have stepped in sooner to do something about this?

HEBERT: I don't disagree and I have said before and myself that folks should have done something sooner. One of the biggest cases we've got out there is the El Paso case. In the previous administration, under a previous chairman, before I was chairman, I'd concurred in a case on the El Paso case. We had had a lot of procedural calls, a lot of discovery calls.

I concurred -- in that last concurrence I think under the previous chairman, and it's in the record where I said, we've been out here nine months on the case. Let's make the call on the case. That's one of the major cases right now dealing with California. I agree, but I will tell you what, since I've been chairman, since we moved in this administration, we've issued over 60 orders for the state of California. We've issued refunds, we've got rates at reasonable levels and we're bringing in new supply.

We're doing all we can, but we need the help of the people of California. FERC has done its job. They can talk about the past all they want. I've taken the rearview mirror, I've thrown it out the back. We're moving forward here.

They want to talk about the past administration, they're welcome to do that.

WOODRUFF: And when David Freeman said, as he did yesterday, he said -- talking about you, he said -- was asked about this problem, talking about rebates, he says you said at one point, let -- the marketplace reigns and, quote, "let grandma die." Did you ever say something like that?

HEBERT: No, I never said that, and that is completely untrue.

WOODRUFF: All right, well I just wanted to ask you about it because he brought it up, and I asked him about it, and he didn't give us a date, but he said that he was quoting you.

HEBERT: Tell him that I would love for him to provide you with that quote, and I'd love to see it myself.

WOODRUFF: All right, well Curtis Hebert, who is the chairman of the Federal Energy Regulatory Commission, we thank you very much for joining us. We appreciate it.

HEBERT: Thank you; good to be here.

WOODRUFF: Thank you.

The president heads South and sends a warning back to Capitol Hill: the latest from Alabama just ahead.

(COMMERCIAL BREAK)

WOODRUFF: President Bush is combining policy and party business in a trip to Alabama today. In the next hour, he will attend a fund- raiser for GOP Senator Jeff Sessions. That after, earlier, touting his land and water conservation fund at a state park. But the environment wasn't the only issue on the president's mind today.

Joining us now from Birmingham, our Major Garrett -- Major.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Judy, for the first time in his presidency, President Bush today warned Congress not to exceed the budget, not to send him spending bills that go over what he sent to Congress in his first budget for the 2002 year.

The president said, and I quote him directly: "If they," meaning Congress, "try and bust the budget, there is a remedy. If they get over the budget, there is a simple remedy, and that's to put the veto pen on it and send it back to Congress until we get the budget right."

Like I said, the White House confirms this is the very first time the publicly -- the president has publicly warned Congress. He's said this many of times in private meetings with staff. Vice President Cheney has said so on some of the weekend talk shows.

But the president put down this marker, White House officials say, to warn Congress, which is right in the middle of the appropriations process right now, not to overextend themselves, not to go over the limits that the president has put forth.

I talked to some senior Republicans, both in the House and the Senate this afternoon, their reaction, well, that's good; let's hope the president actually means it.

What does that mean? Well, the Congress knows that there are going to be spending bills sent to the president that will go over his recommended allocations, specifically on defense and on education spending. What does that mean? That means the president is going to have to veto other bills to make sure the budget all fits together. Republicans will be waiting eagerly to see if that, in fact, actually happens.

But, as you said, Judy, the president came here to Pelham, Alabama to talk about the environment and conservation. Specifically the Land and Water Conservation Fund, which is one of the elements of the Bush budget dealing with the environment that gets a very, very big boost indeed. And the president said he's fully funding that Land and Water Conservation Fund to prove he really cares about the environment.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I propose to fully fund it -- the Land and Water Conservation Fund; $900 million will fully fund the fund. It's the highest request in the fund's history, and half of the money will go to the states, just like the authors of the law intended.

(END VIDEO CLIP)

GARRETT: Now, the Land and Water Conservation Fund was created in 1965. It's been sort of an also-ran in all of environmental conservation policy. Congress has never fully funded it. The president wants that $900 million on the table because he wants states to have the flexibility to do what the fund allows them to do, which is to purchase land and set it aside for recreation or conservation. That's why the president came here to Oak Mountain State Park to drive that message home -- Judy.

WOODRUFF: All right, Major Garrett traveling with the president today. Thanks, Major.

So how is the president faring in the public's opinion? For that answer, we turn to our Bill Schneider.

Bill, is the president, as you might say, riding high after he got his tax cut through, he got his education reform bill passed, and he's just come back from Europe? WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, you'd certainly think so. And, in fact, the president's job rating is in the mid-50s, which is still fairly high, and people do like him.

But there's a problem: Things are moving in the wrong direction; instead of going up, they've been going down. "The New York Times" reported this morning that President Bush's standing in both domestic and international affairs has, in their words, quote, "diminished considerably."

Why is that? Three words: "out of touch." He's done pretty well with his agenda, but his agenda is not necessarily the American people's agenda.

Here's the evidence: the "Times" and CBS News asked people in their poll: Has President Bush concentrated on the problems that matter most to you? Over 60 percent said no. He's concentrated on the problems that mattered to his supporters. Interestingly, people do believe that Bush cares about the needs and problems of ordinary Americans, but those needs and problems do not drive his agenda. Something else does.

WOODRUFF: Well, do people feel the president is too conservative?

SCHNEIDER: It's not that. We don't find many complaints in our poll, and they didn't in their poll, that President Bush is too conservative. The problem isn't ideology, it's his priorities. The public's concerns right now are Social Security, health care reform, patients bill of rights, prescription drugs -- issues that Democrats have been pressing.

So what do people think is driving President Bush's agenda? Not conservative ideology, special interests. Here's the evidence from a poll that we took back in April. By better that two to one, people say big business has too much influence in the Bush administration.

A lot of people see President Bush as kind of a front man for the big-money boys. And that's why they believe he's out of touch.

WOODRUFF: So is that a serious risk for the president?

SCHNEIDER: It is, because it's a risk that he could end up just like his father if things turn bad. What's saving President Bush right now is that things are still pretty good in the country: 70 percent say the economy is in good shape, and there is no international crisis.

But remember what happened to his dad? After the Gulf War, the elder President Bush was on top of the world. But when the economy went sour, he was seen as out of touch with ordinary Americans. That's always the risk Republicans take when they elect a president born to wealth and privilege. This guy's had it easy all his life; what does he know about what ordinary Americans are going through?

Here's the evidence: Most Americans feel that President Bush's policies favor the rich, not the middle-class, not the poor, not everybody the same.

You know, President Clinton was a striver. No one has ever called President Bush a striver. Everything in his life has been handed to him by his rich friends, including, some say, the presidency. President Bush is one step away -- one step away -- from becoming his father. If things turn bad, that could happen. When things turn bad, people want a president who can empathize, who's not out of touch. Empathy, you remember, is the quality that got Bill Clinton elected back in 1992.

WOODRUFF: All right, our poll watcher and interpreter Bill Schneider. Thanks very much.

Ahead: coping with an unimaginable loss; a Houston father speaks out on the death of his children and the charges against his wife. That story and some of the day's other top stories ahead on INSIDE POLITICS.

(COMMERCIAL BREAK)

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

The man whose wife is accused of killing their five children says he stands by her and wants her to get help. 36-year-old Andrea Yates will be arraigned tomorrow on capital murder charges for the drowning deaths yesterday, near Houston. Her husband, Russell, says she had been treated for postpartum depression, but her despair must have been more than she could handle.

(BEGIN VIDEO CLIP)

RUSSELL YATES, FATHER OF FIVE SLAIN CHILDREN: What happened was just, you know, incomprehensible. I mean, I just can't -- I, you know, looking back, you know -- I struggled with it all last night, I couldn't sleep last night. I was like, you know, is there anything I could have done, you know.

(END VIDEO CLIP)

WOODRUFF: Andrea Yates could receive the death penalty if she is convicted of the capital murder charges.

In Chandler, Arizona rescuers have been trying to reach a construction worker who was trapped when a 35-foot-deep trench at a construction site collapsed. A coworker was rescued and has been hospitalized with what may be a broken leg. About 40 firefighters from nearby departments have been helping with the rescue effort.

In Detroit, a dangerous job nearly ended in tragedy today. Two painters were on the Ambassador Bridge when a scaffolding broke. One man fell, but his plunge was stopped by his safety harness. Firefighters and other workers pulled both men to safety. The one who actually fell is in a hospital, listed in fair condition.

High above a construction site, a standoff with police continues in Atlanta. You're looking at a live picture where police and psychiatrists are talking with a man holed up on top of a 200-foot crane. Police say that he claims to be an FBI agent. They're using cell phones to try to persuade the man to come down. Earlier he threatened a few people who tried to climb up to him, but police say that he is not a threat to others.

In New York City, thousands turned out today for the funerals of two firemen killed on Father's Day. Harry Ford and Brian Fahey were among three firefighters killed in an explosion and fire that destroyed a hardware building in Queens. Both Ford and Fahey were married, and each of them had three children. Firefighters from as far away as Canada attended the funerals.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Back in California, Governor Gray Davis is feeling the heat over the hiring of two well-known consultants. It turns out the pair also worked for one of the state's utilities, raising concerns over a possible conflict of interests.

CNN's Frank Buckley reports.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): If you look closely at the California state checks churning out of a machine in Sacramento, you'll see the signature of the state official authorizing the checks: Controller Kathleen Connell.

But a check for $30,000 these two men, Mark Fabiani and Chris Lehane are expecting for a month of work as communications consultants to California Governor Gray Davis is not in the mail, is not going out under Controller Connell's signature.

KATHLEEN CONNELL, CALIFORNIA STATE CONTROLLER: I have decided to freeze payments until we have justification that the services that are being provided by these two gentlemen are, indeed, directed solely at California's benefit.

BUCKLEY: Lehane and Fabiani are perhaps best known as chief spokesmen in Al Gore's unsuccessful campaign to become president. Governor Davis has been heavily criticized for hiring them. Critics saying the well-known Democratic operatives should not be receiving taxpayer funds for what they see as political work.

"The Wall Street Journal" this week calling it "a political act that reeks of desperation." A U.S. senator chiding the governor on the issue.

SEN. ROBERT BENNETT (R), UTAH: I'm delighted to have you say that President Bush didn't cause this. I would hope you advise your political consultant of that fact.

BUCKLEY: Adding to the criticism: a taxpayer's lawsuit over their hirings, alleging conflict of interest. Lehane and Fabiani also working as consultants for one of the major utilities in the state, Southern California Edison.

LEWIS UHLER, TAX LIMITATION COMMITTEE: There is a clear conflict of interest, and I thought it was time to blow the whistle on this process.

BUCKLEY: Lehane telling CNN in a statement: "This is all old news. We told people from day one that we do work for Edison. Governor Davis and Edison are in agreement on the core energy policy issues, and both sides have stated that no conflict exists."

GOV. GRAY DAVIS (D), CALIFORNIA: These guys the Republicans are complaining about are the good guys. They're helping us fight the bad guys to get money back for our citizens who have been grossly overcharged.

BUCKLEY: But Controller Connell, a Democrat whom Davis didn't endorse in her recent run for mayor of Los Angeles, suggests the issue requires further examination.

CONNELL: We don't want to have people working for the state of California who are also working for others where there is a clear and very public conflict.

DAVIS: If she wanted to be constructive, she would direct her energy towards the people who are bilking ordinary Californians out of hard earned money.

BUCKLEY: For Davis, the flap over consultants is just the latest irritation in a crisis consuming his administration. One that isn't likely to abate as California enters its hot summer season that promises to bring more rolling blackouts.

Frank Buckley, CNN, Los Angeles.

(END VIDEOTAPE)

WOODRUFF: Lobbying old friends, Geraldine Ferraro reaches out to a Senate committee and asks for help on a new and very personal call.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Former Congresswoman and Democratic vice presidential candidate Geraldine Ferraro brought her personal battle with cancer to Capitol Hill today. Ferraro testified before her friends and former colleagues on the Senate Appropriations Committee about the diagnosis and treatment of her blood cancer and the need for more research funding.

(BEGIN VIDEO CLIP)

FERRARO: Let me start by saying I'm a very lucky woman. First of all, I have the best doctors caring for me. It's because of one of those doctors, Ronald Mckenzie, my internist, that I was diagnosed very early. I have chosen not to be public about my health until now. That's one of the benefits of losing an election.

(LAUGHTER)

FERRARO: You can keep your private life private. But I am here because I wanted to make sure that the public got to know about multiple myeloma and I wanted to point out to do you how important research dollars are in dealing with this disease.

I didn't even know what multiple myeloma was. I had never heard of it. Dr. Mckenzie explained that it was blood cancer that attacks the bones. Most people don't find out they have it until a symptom appears that needs an explanation, like aching and broken bones, and I had no symptoms.

My initial reaction was thank God it's me and not one of my children. As much as we want to believe that we are indispensable to our families, my children are all grown and quite independent. But they are also married and have little children of their own who most definitely do need them.

I have been taking thalidomide since November. It's working. Once a month I still go for the infusion and once a month I get the blood infusion tests. Then I wait for three very long days until my tests comes back to hear from Dr. Tepler (ph). Am I still doing well? Have the cancer cells found a way to fight the thalidomide. If they had, what little option do I have before I deal with the stem cell transplant?

I don't expect you to answer those questions, Senators; those I reserve for Dr. Anderson. And I have such confidence in him and the other researchers who are dealing with multiple myeloma that I know they will have the next step ready for me when I need to take it. But they need you and your colleagues in the Congress to help. They need more awareness and attention being paid to blood cancer so that people will test early and be diagnosed earlier. They need research dollars to continue to search for new treatments and a cure, and they faster approvement (sic) by the FDA of new drugs.

This is still a huge problem of this country. For if we lump together leukemia, lymphoma and multiple myeloma, last year's figures show that the mortality from blood cancer is the second only to lung cancer: 20 percent higher than colon cancer. One-third higher than breast cancer and almost twice as high as prostate cancer. Living in New York City, I am never quite sure when I run into the street to hail a cab, that I'm going to live long enough to ride in it.

(LAUGHTER)

FERRARO: But hearing that you have a disease that is incurable, with an average life span of just three years, does make one stop and notice. I expect, with my trio of medical miracle workers, with the love of my family and friends, with my mother and all of the nuns that took care of me as a little girl, praying for me, that I will be around at least until 2010, so that I can take advantage of President Bush's elimination of the inheritance tax.

(LAUGHTER)

FERRARO: And hopefully, even after that, so that I can be invited to the inauguration of the first female president of the United States, Senators.

(APPLAUSE)

(END VIDEO CLIP)

WOODRUFF: It's great to the have humor at a situation like hers. Geraldine Ferraro testifying today before a Senate committee.

Today's indictment in the Khobar Tower bombing: What role did Iran play? CNN's David Ensor examines the Islamic's states involved in the global terrorism ahead in the next 30 minutes of INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Five years after a terrorist attack on U.S. servicemen in Saudi Arabia, the United States issues indictments.

Also ahead, the political scene in the Middle East before the Bush administration holds new high level talks.

And later, the NATO secretary-general on his talks with the Bush administration, and the next move to the alliance.

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

WOODRUFF: Welcome back to INSIDE POLITICS. President Bush today remembered the 1996 bombing of the Khobar Towers in Saudi Arabia as a, quotem, "deplorable act of terrorism," and he commended U.S. and Saudi officials for the investigation that led to the indictment of 14 people.

We have more now from our justice correspondent, Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Nearly five years to the day after the deadly bombing of the Khobar Towers in Saudi Arabia, U.S. officials announced the indictment of 13 Saudis and one Lebanese man listed only as John Doe, but who is suspected of helping build the bomb that killed 19 U.S. servicemen.

But no Iranians were indicted, despite U.S. allegations that the 14 men charged all are members of the group Hezbollah, and reported to Iranian government officials they had targeted Americans at Khobar Towers.

JOHN ASHCROFT, U.S. ATTORNEY GENERAL: The indictment alleges that the charged defendants reported their surveillance activities to Iranian officials, and were supported and directed in those activities by Iranian officials.

ARENA: But intelligence sources tell CNN, in the end, the evidence just wasn't enough to indict Iranian officials. State Department and other officials were consulted, sources say, before that decision was made.

But both Attorney General Ashcroft and FBI Director Freeh say the ultimate call was based on what could be proved in court, not on U.S. efforts to improve relations with Iran.

LOUIS FREEH, FBI DIRECTOR: This was a charging decision made ultimately by the attorney general, recommended by the line prosecutors.

ARENA: The mother of Air Force Captain Chris Adams, killed in the blast, wants Iranian officials to face U.S. justice.

CATHERINE ADAMS, MOTHER OF VICTIM: If an Iranian official had anything to do with it, I believed he should be touched and brought to justice, just as the Lebanese and Saudis.

ARENA: None of those named in the indictment are in U.S. custody, but several are in Saudi hands. The trouble now: bringing the alleged terrorists to the United States for trial, not an insignificant obstacle.

ERIC DUBELIER, FORMER FEDERAL PROSECUTOR: There was a practical difficulty in finding people. It's a large world. For the people in custody in Saudi Arabia, I would imagine that it's going to come down to a decision of the Saudi Arabian government as to whether or not they're going to allow those people to be transferred to the United States for trial.

(END VIDEOTAPE)

ARENA: The indictment successfully closes a chapter for Louis Freeh, who ends his tenure as FBI director this week. He has said for years it was a top priority of his to try to bring Khobar suspects to justice --Judy.

WOODRUFF: All right, Kelly Arena, thanks very much.

In the wake of the Khobar Towers indictment, CNN's David Ensor has been looking at the nation of Iran and its alleged links to terrorism. He reports that much has changed over the years.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): Ever since it took American diplomats hostage back in 1979, Iran's government has been in the terrorism business. Hundreds of Iranian dissidents were murdered by Iranian government agents in the 1980's, say U.S. officials -- sometimes on the streets of Europe.

Iran was connected to bombing the U.S. Marine barracks in Beirut in 1983, the U.S. embassy in Lebanon twice, and the Israeli embassy in Argentina in 1992. The latest State Department report on terrorism says: "Iran remained the most active state sponsor of terrorism in 2000."

But in fact, much has changed. After a former Iranian intelligence minister, Ali Fallahian was indicted in Germany in the killing of dissidents at a restaurant in Berlin, the resulting international outrage prompted moderates around Iranian President Khatami to rein in the intelligence ministry.

Knowledgeable U.S. officials say in recent years, the evidence is that Iran bankrolls and helps terrorists, but may not be picking their targets anymore.

BRUCE HOFFMAN, RAND: The quality of their involvement has shifted from a more active, and perhaps even tacitly overt, to a much more supportive and more covert, behind-the-scenes involvement -- I think a critical involvement, nonetheless. Because terrorist groups need money. They need logistical assistance that often a state's intelligence agencies and armaments, stockpiles can provide.

ENSOR: And most Iranian support for terror now is directed against one target, Israel. At an April conference in Tehran with leaders of Lebanese Hezbollah, Palestinian Hamas and other groups accused of terrorism, Iran's supreme leader, the Ayatollah Khomeini called the Jewish state a "cancer" that must be removed, and praised the Palestinian Intifada.

U.S. officials estimate Iran spends a $100 million a year supporting terrorism, mostly against Israelis.

GEOFFREY KEMP, NIXON CENTER: There will be better relations with Iran, in my judgment, when Iranians decide that they have more to lose by supporting Hezbollah, Islamic Jihad and Hamas, and infuriating the United States -- particularly the administration and the Congress by their statements about Israel, than they have to gain.

ENSOR (on camera): Knowledgeable U.S. officials say though Iran appears to have stopped specifically directing terrorism against U.S. targets, Iranian agents continue to monitor U.S. embassies, missions and personnel -- a constant reminder, they say, that Iran retains the capability, at least, to use terror against Americans.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Now to the Middle East. As Secretary of State Colin Powell prepares to visit the region next week, Israeli settlers today offered their strongest opposition yet to a U.S.-brokered truce with Palestinians.

CNN's Mike Hanna has more on the latest protests, violence and diplomacy.

(BEGIN VIDEOTAPE) MIKE HANNA, CNN CORRESPONDENT (voice-over): The Jewish settlers say they can take no more, besieging the Israeli prime minister's office to press demands he abandon the cease-fire and exact retribution for the four Israelis killed in the past week.

Retribution, too, being sought by Palestinian crowds, burying the sixth Palestinian killed in the conflict since the shaky cease-fire came into effect eight days ago. As the cease-fire teeters, the U.S. intensifies its diplomatic efforts.

In coming hours, a U.S. assistant secretary of state will arrive in the region to pave the way for a visit in the middle of next week by his superior, Secretary of State Colin Powell. Early next week, Ariel Sharon, scheduled to meet President Bush in Washington before picking up discussions with Powell back in Israel.

Israelis and Palestinians still in confrontation on the ground, and divided as well in what they expect from the Powell visit.

MUSTAFA BARGHOUTI, PALESTINIAN POLITICAL ANALYST: Powell's visit can be very positive if it is used as an initiation of a political process, to deal with the political causes of the problem, and that is settlement and occupation.

DORE GOLD, SHARON ADVISER: Clearly, the United States is seeking to bring in a higher-level delegation to get Mr. Arafat to comply with his commitments.

BARGHOUTI: If it is used as an instrument of pressure, further pressure on Palestinians, I don't think that would be fruitful. It is important that there is an even-handed, nonbiased approach that, as again, I said, respects and deals with the causes of the problem.

GOLD: Again, we're not talking about reducing violence. We're talking about eradicating violence altogether, and that's what we hope is Secretary Powell's mission.

HANNA: Israel points to ongoing Palestinian attacks. The latest: the firing of a large mortar bomb at a collective farm inside Israel along the Gaza border. Palestinians maintain the ongoing Israeli blockade of Palestinian territory is a direct contravention of the cease-fire.

(on camera): Essentially, the U.S. secretary of state is being asked to arbitrate in this dispute. And ultimately, if he cannot get agreement, he may be forced into apportioning blame.

Mike Hanna, CNN, Jerusalem.

(END VIDEOTAPE)

WOODRUFF: The politics of peacekeeping: When we come back, why NATO's next mission may be the latest flash point in the Balkans. A conversation with the head of the military alliance when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: NATO's newest mission remains in the planning stages. The military alliance has voted to send troops to former Yugoslav province of Macedonia if there is a cease-fire, in order to help secure peace in the Balkan nation between the government and ethnic Albanian rebels. Urgent efforts to achieve a cease-fire are under way now.

A short time ago, I spoke with NATO Secretary-General Lord George Robertson, who is in Washington for talks with Bush administration officials about possible U.S. involvement.

(BEGIN VIDEOTAPE)

GEORGE ROBERTSON, NATO SECRETARY-GENERAL: The decision that was taken yesterday was a NATO decision, including the United States. Nineteen countries have to agree to send troops, and the decision was taken in principle yesterday in the North Atlantic Council, and the United States of America supports very much this mission, which is limited to helping with the peace process where the armed extremists are handing over their weapons.

So, the issue of troops has not yet come up. Who will supply the troops that will be required will be decided in what we call fourth- generation conference, which will probably take place next week. And that's the moment when countries will be asked for troops, and the proper balance between the troops will be determined.

WOODRUFF: So, when Secretary Powell said yesterday U.S. troops had not yet been committed, that's the case, you're saying. They haven't been committed.

ROBERTSON: Absolutely true. But then, they haven't been committed by other countries as well. Some of them have made offers of troops, but the deputy supreme ally commander of Europe next week at this fourth-generation conference has to decide the kind of troops he believes are appropriate. And he then takes the offers and makes some demands of countries, so that decision is yet to be made, and Secretary Rumsfeld made it clear that the participation of American troops will be a matter for the president.

WOODRUFF: Well, you have said that any troops going to Macedonia, you assumed would be new troops to the region. Secretary Powell has already said if they were sent, they would be troops already in the region. Where would these troops come from, in your sense, in your understanding?

ROBERTSON: Well, it would depend on the speed with which we were deploying the troops. They are there, after all, to go in when there is a peace agreement, when there is a cease-fire in place. So, it might be in order to speedily get troops there, that some troops from the region, already in the region, might be used. But it would have to be back filled, as we called it. The gaps would be have to be filled, because they are already doing a very vital and important job. But there are American troops...

WOODRUFF: You're saying, they came out of Kosovo or Bosnia, you're saying?

ROBERTSON: That's correct. It might be that some people would do that, but we're not at a point to say anything about that. But what Secretary Powell is saying to the Foreign Relations Committee of the Senate was that there are already between 500 and 700 American troops in Skopje at the present moment, so the issue of then having to send fresh American troops might not necessarily apply just now. But as I said, NATO has not yet asked for the forces, because we have not yet got to that point.

WOODRUFF: Senator Joe Biden, the new chair of the Senate Foreign Relations Committee, has said in effect that the United States must be part of these kinds of missions, because the U.S. has a special-type sense of authority in that part of the world. Can a mission like this work without U.S. troops?

ROBERTSON: Well, that's question that the secretary-general of NATO is not going to answer. Senator Biden is perfectly entitled to that view and he will make it, presumably, to the administration as well. He is a good friend of mine and a great friend of NATO's as well. But we will decide in due course, probably in the course of next week, what troops are required and what balance is there.

What I would say is, that it is important that there is a proper wide balance of troops that come, so that they don't all come from one country. This is a NATO mission, and NATO missions mean that the countries in NATO should be involved.

WOODRUFF: Let me turn your attention, Mr. Secretary-general, to missile defense. You have tried to play down the differences within the NATO countries over President Bush's determination to put a missile defense system together. But before this is widely accepted among the NATO countries and in Europe -- especially by France and Germany -- what are the kind of assurances that this president, this administration will have to provide, do you think?

ROBERTSON: Well, the first thing that the administration must provide -- and is providing -- is access to information about their current thinking. They have not got a proposal, there is no definitive plan yet determined by the American government in terms of missile defense. There is a decision to have missile defense, not just for the United States but European allies and for deployed forces of the alliance and of the United States.

Now, that itself, you know, is quite a big new challenge, and what I asked the president in April to do -- and what he has done -- is to share the thinking process with the allies, and that is what is happening. And that's why he got such a good response from the other 18 prime ministers and presidents at NATO headquarters last week, because they believe his offer is an open one. They have got an open mind and they want to hear what the thinking process is before the decisions are taken.

WOODRUFF: So, you are getting the information you need in your -- in there -- among the rest of the nations? ROBERTSON: Indeed. We've had some very good briefings by the American government officials and indeed by the president himself, when he sat around the NATO council table last week.

WOODRUFF: I listened to you speak yesterday, discussing national missile defense. You talk about it as if it's still in the very early stages, just now you talk about it as if there are still many decisions yet to made. However, high-ranking Defense officials, including Secretary Rumsfeld himself, are saying this is something they want to make a crash effort on, they want to get something in place no later than the end of this president's current term in office. Are we talking about the same thing here?

ROBERTSON: Well, of course even that takes four years. And at the present moment, the administration has not made a decision about what kind of system or even systems they are going to get involved in. So, with that process of thinking -- not slowing down the process, but sharing the process with the American administration to see how best we can deal with the threats and the problems that affect the people of the NATO countries and beyond and in the future.

This is an argument not about missile defense, it's about a new strategic framework that takes account of the fact that a lot of countries have now got ballistic missiles, which can deliver deadly warheads over very long distances and which can be used for blackmail purposes. Now, we have got to measure up to that. At the end of the day, if missile defense is too expensive or if it doesn't work, then we still got to have an answer to questions that President Bush is posing.

So, the thinking process about how and when missile defense will be put in place is a subject of a widespread consultation, even although the administration has taken the decision about when out of the equation, because the election in the United States determine that.

WOODRUFF: All right. Well, NATO Secretary-General Lord George Robertson, we thank you very much for joining us.

ROBERTSON: Pleasure to be with you.

(END VIDEOTAPE)

WOODRUFF: And as we reported a little earlier on INSIDE POLITICS, today Democratic senators meeting with Vice President Cheney at the Capitol, told our producer, Dana Bash, they came away with a distinct impression that the Bush administration is, in effect, baking off from the timing it had in mind on implementing a national missile defense system. In effect, the administration not as quick or as eager to abrogate the Antiballistic Missile Treaty, which is now in effect.

The case of the missing intern and the controversy now swirling around one man, Congressman Gary Condit. CNN's Candy Crowley has a profile of the congressman thrust into the spotlight, when INSIDE POLITICS continues. (COMMERCIAL BREAK)

WOODRUFF: After a meeting between Chandra Levy's parents and Washington police, California Congressman Gary Condit issued a statement about the case of the missing intern. Condit says if there is any new information he can provide about the 24-year-old Levy he will "do so without hesitation."

As the spotlight intensifies on Condit and his relationship with the young woman he has called his "good friend," our Candy Crowley takes a closer look at the Congressman.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Congressman Gary Condit is under the modern-day microscope, television cameras, which showed up at a routine meeting of the Agriculture Committee to catch the body language, to focus on the facial expressions.

And while the camera does not lie, neither can it read minds. Whatever is on Condit's mind, he will not say.

A B-team player on Capitol Hill, the Congressman from the 18th District of California is getting A-team scrutiny, and they are watching back home in the Central Valley.

UNIDENTIFIED MALE: I have supported Condit in the past and I think he needs to be forthcoming in his own words to his constituents, because it's really snowballing, getting out of hand.

CROWLEY: Gary Condit's world is a coast away from Washington's headline mystery. Modesto, the largest city in Condit's district, has grown since it was immortalized as a small town of hotrods and hamburger stands in the coming of age movie "American Graffiti."

It is largely a middle class, family kind of district where social mores are conservative and crops are king. As a right of center Democrat and fierce protector of agricultural interests, Condit seat has been considered safe.

UNIDENTIFIED MALE: He seems to be pretty well loved around here. I hear the farmers all love him, because he has done a lot for him. So, people are a little slow to bad mouth him around here, from my consensus. Until they get more evidence.

CROWLEY: An early supporter of Gray Davis, a backer of Al Gore, Condit is nonetheless a conservative on issues ranging from the budget to welfare. That's Condit at the White House for the signing ceremony of the Bush tax cut bill. His politics have often riled his leadership, but they kept him in sync with the Central Valley.

UNIDENTIFIED MALE: The whole truth hasn't come out yet, so how could that change my opinion? You know, he does a great job for the district.

CROWLEY: One of 31 House Democrats who voted for the Clinton impeachment inquiry, the California Congressman eventually voted against impeachment. Condit works easily across the aisle. He became good friends with former Congressman John Kasich. The two went to rock concerts together.

A leader in the Blue Dog Democrats -- a group of like-minded, conservatives, Condit's stature has been enhanced by the slim margin in the House. Democratic Leader Dick Gephardt put Condit on the party's Leadership Council.

Despite the drubbing Condit has taken for his silence, he still enjoys Gephardt's public support.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: As far as I know Representative Condit has cooperated with the police in everything they have asked and he is doing the appropriate and right things in this investigation and in this search.

CROWLEY: The son of a Baptist minister in Oklahoma, Condit married at 19 and moved to California. Now 52, he is the father of 2 grown children. He has a home in Washington. His wife lives in their California home. An easy-going guy with a toothy smile and television hair, Condit rides his Harley back home.

And he once agreed to appear in "Hunks On The Hill," a joke calendar put together as a going away present for former Congressman Susan Molinari. They are all merely pieces of a life under a microscope.

UNIDENTIFIED FEMALE: I think it's very difficult to be a politician because all of your life becomes part of the world.

CROWLEY: There is no way to know whether the pieces fit into the puzzle, or whether we have forced them there.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: A spokesman for former senator and Republican presidential candidate Bob Dole says Dole will have an angioplasty next week to treat an aneurysm or bulge on his aorta. The aneurysm was detected three years ago; if untreated, it could be fatal. But a spokesman says Dole's condition is "nothing critical." And that Dole continues to work at his lobbying firm in Washington. Dole turns 78 next month.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Every Friday, our Bill Schneider awards the political play of the week. Now we want your nominations for the weekly play.

You can e-mail your ideas to INSIDEPOLITICS@CNN.com.

And tune in on Fridays to see if Bill picked your pick to be his play of the week.

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 keyword: CNN.

Our e-mail address is INSIDEPOLITICS@CNN.com.

Tonight in the "CROSSFIRE" -- how is President Bush faring in the polls? Congressman Jim McDermott and Asa Hutchinson will be the guest at 7:30 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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