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President Bush Signs on to House GOP's Patients' Rights Bill

Aired June 27, 2001 - 17:00   ET


ANNOUNCER: Operation: patients' rights.

President Bush signs on to the House GOP's prescription. As Mr. Bush prepares to dine for big campaign dollars, we'll chew on the future of fund-raising reform.

And revisiting the Anita Hill-Clarence Thomas story: one author says his version was a lie.

JUDY WOODRUFF, CNN ANCHOR: Thanks for joining us.

Just days after putting his veto threat on paper, President Bush today tried to show a bit more willingness to compromise on the issue of patients' rights. He revealed his support for a patients' rights bill backed by the GOP House leadership. But the president also drew another line in the sand for Senate Democrats, and their version of health care reform. Here is our senior White House correspondent John King.


JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president called in House Republicans to talk compromise, but he also made clear there are some versions of a patients' bill of rights he would be quick to veto.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are some other alternatives that are working their way, are being debated on the House and the Senate, that will run up the cost of health insurance for American workers and could conceivably cost millions of people their health insurance. I can't accept that kind of legislation.

KING: Senate Democrats are pushing a plan Mr. Bush calls unacceptable, yet their leader came away from a phone conversation with the president feeling upbeat.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: He felt some of these negotiations have been productive and that the bill was much closer to where he might be supportive.

KING: Some 180 million Americans in health maintenance organizations and similar plans have a stake in the debate. There is broad agreement on patient protections like guaranteed access to: Emergency care, medical specialists, drug trials, and an independent medical review of decisions denying requested care.

The divide is on the issue of liability. The leading Senate proposal, the so-called Kennedy-McCain-Edwards bill, allows suits in both federal and state courts and allows punitive damage awards of up to $5 million.

The president for months has insisted that lawsuits should be restricted to federal court, but he threw his support Wednesday behind a proposed compromise that includes: A limited right to sue in state court, but only if an HMO refused to provide ordered by an independent review board. The measure would limit pain and suffering awards to $500,000, and would not allow punitive damages.

Republicans who met with the president say they are increasingly confident of compromise on an issue that has divided Congress for five years now, but Democrats say Mr. Bush hasn't moved far enough and are taking issue with his threat to veto the Kennedy-McCain measure.


ANNOUNCER: Insurance companies. HMOs. Big corporations. They've contributed $51 million to Bush and the Republicans, and now Bush says he'll veto a real patients' bill of rights that lets patients hold HMOs accountable when they make bad decisions or medical mistakes.



KING: And so the political jockeying continues, despite the fact there is more and more talk of compromise. The White House saying those ads proof that some Democrats would prefer politics to progress, that instead of making the compromises necessary to get a patients' bill of rights signed into law. They are much more interested in a presidential veto and an issue for next year's midterm elections -- Judy.

WOODRUFF: John, as you point out, the action right now is on the Senate floor. That being the case, why is the president moving to have conversations with House leaders?

KING: He's been watching what's happened on the Senate floor the past few days, two Republican amendments defeated today. More Republican amendments defeated yesterday. The White House increasingly believing, much as he did in the tax cut debate, the president needs a strong House strategy, that the bill that will emerge from the Senate probably will not be one the president can sign. So he needs to work the House very aggressively.

I was just told by my colleague, Major Garrett, one source familiar with today's meeting, says the president turned to the House Republicans in the room and says, you can only huff and puff and threaten to blow the House down so many times. Well, I'm huffing and puffing. What the president meant was, he was assuring the House Republicans if a bill like McCain-Kennedy gets to his desk, he will veto it.

WOODRUFF: All right, John King, at the White House.

President Bush and Vice President Cheney head to the Washington Convention Center tonight on a mission to raise big money for their party. For some the event is a reminder that campaign finance reform may put a crimp on such galas in the future. That is, if it becomes law. Our Congressional correspondent Kate Snow has an update on political fund-raising and the push for reform.


KATE SNOW, CNN CORRESPONDENT (voice-over): The theme: Black tie and boots, at a fund-raiser headlined by President Bush. The dinner should raise as much as $15 million for the committees that support Republican Senate and House candidates. Most of it, the currently unlimited soft money. And it's not just Republicans.

Both parties are raising soft money like it's going out of style, and it may be. The Senate has already passed a campaign finance reform bill, known as McCain-Feingold, that bans soft money and a House committee is about to take up two competing versions. The Shays-Meehan bill is similar to what passed the Senate.

It would ban soft money, and restrict political ads by outside interest groups.

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: We passed this bill in 1998, and I was very worried, but hopeful. We passed it again in 1999 and I was very worried, but hopeful, and we are dealing with it now in the year 2001, and I would have to say I am worried, but hopeful.

SNOW: But an unlikely alliance may be forming against the Shays- Meehan bill. Congressman Bob Ney has the green light from the House Republican leadership for a new bill. His campaign finance reform legislation allows limited soft money for national parties to do voter registration, and get out the vote drives. It also allows political ads by outside groups, up to the day of the election, with disclosure.

REP. BOB NEY (R), OHIO: It allows advocacy groups, whether it's NOW, Right To Life, Gun Control Incorporated or NRA. It allows those groups to have freedom of speech. That's a First Amendment right. The other bills really don't do that.

SNOW: Critics say the Ney bill would create an enormous loophole, allowing millions in soft money spending. But Ney's provisions are attractive to some Democrats, particularly members of the Congressional Black Caucus.

REP. ALBERT WYNN (D), MARYLAND: We agree there's too much money in politics, but we also feel there ought to be a small amount of money available for get out the vote activities, voter registration, voter education, mobilization and party building. That was the original intent of soft money.

SNOW: Wynn says many Black Caucus members also like Ney's idea of keeping current limits on hard money, donations made straight to a candidate. They fear an increase would give an unfair advantage to candidates from wealthy areas. Recognizing that, the authors of the Shays-Meehan bill are scrambling for a compromise meant to placate worried Democrats.

The bill would keep the $1,000 hard money donated to House candidates, but allow up to $2,000 donated to Senate candidates.


SNOW: Democratic Minority Leader Richard Gephardt saying today he feels they do still have enough support to pass what he calls a good campaign finance reform bill. Whether that bill will look exactly like what the Senate passed is the big question. Judy, they're going to be taking this up in the House Administration Committee tomorrow, and then they'll take it up in the full House, both versions of the campaign finance reform bill, when they get back from the July 4th recess -- Judy?

WOODRUFF: Kate, you've been talking about mostly what's going on in the House. Now to the Senate, where Senate Republicans are going after the new Democratic leader over there, Tom Daschle, today, for dragging his feet on the president's education reform plan. This, after criticizing him for not moving quickly enough on defense spending and on energy reform. What's going on?

SNOW: Right. It's the third major criticism in a week, Judy. They're certainly getting out the knives, if you will. In fact, one Republican aide tells us they want to make sure people notice, they want to point out the weakness, this aide said, in Senator Daschle's leadership technique. To that, a Daschle spokeswoman telling us that they feel they are being attacked on all sides, and if it's not one thing, it's another, and she said the next thing you know, in another day, they'll be blaming us for tornadoes in Kansas.

Back to you, Judy.

WOODRUFF: All right, Kate Snow. We'll find out if they are right. Kate's at the Capitol.

Turning to the New Jersey governor's race: Republicans are closing ranks around GOP nominee Bret Schundler, as he launches his battle against Democratic nominee Jim McGreevey. The man Schundler beat in yesterday's primary, Bob Franks, agreed today to serve as a chairman of Schundler's campaign. But, Schundler still faces questions, even within his party, over whether he is too conservative to win the governor's office.

In an interview that will air on CNN's "CROSSFIRE" tonight, Schundler was asked how his pro-gun, anti-abortion views will play with voters this fall.


BRET SCHUNDLER (R), NEW JERSEY GOV. CAND.: Beyond those hot- button issues, there is enormous issues where there is consensus with regard to the need to solve the problem. And where what people found in me is someone who is willing to talk about real solutions and spell out how we can get from here to there and the willingness to take on the very powerful interest groups that will resist reform. That is the thing that is lacking, the courage to actually take on some of these interest groups, that will fight some of the initiatives I've put on the table.


WOODRUFF: Schundler won the GOP nomination last night with 57 percent of the vote, to 43 percent for Bob Franks. For more on that match up, and what's ahead, here is CNN's Jason Carroll.


JASON CARROLL, CNN CORRESPONDENT (voice-over): Few predicted Bret Schundler would get this far, but he did and now the mayor of Jersey City is the Republican nominee for New Jersey governor.

BRET SCHUNDLER (R), NEW JERSEY GUBERNATORIAL CANDIDATE: If you want government to empower you not take more power over you, then you need to join us! This has to become a party!

CARROLL: Schundler beat Republican challenger and former Congressman Bob Franks in a nasty primary.


UNIDENTIFIED MALE: Schundler cheated kids out of a better future and instead promoted himself.


CARROLL: ... in which each attacked the other's integrity.


UNIDENTIFIED MALE: Bob Franks is desperate. He's attacking Bret Schundler for running these ads to help needy children get scholarships. Bob Franks is losing, so he's lying.


CARROLL: Franks had started out the odds-on favorite. He's a moderate in a state that's traditionally moderate. Franks had better name recognition. Party leaders backed him, and most papers endorsed him. Schundler is more conservative than Franks.


UNIDENTIFIED MALE: I'm asking the question...

UNIDENTIFIED MALE: Ultimately, if you proselytize...

SCHUNDLER: I believe you should make abortion illegal. (END VIDEO CLIP)

CARROLL: Schundler is antiabortion and pro-gun. He's the political outsider, Franks, the insider. So why did Schundler come from behind?

(on camera): The answer might lie in who traditionally comes out to vote in Republican primaries. They tend to be more conservative than those who show up in a general election.

(voice-over): The question now is how will this conservative candidate match up against moderate Democrat, Jim McGreevey, who barely lost to moderate Republican Christie Whitman in the last gubernatorial race.

DAVID MURRAY, REPUBLICAN CONSULTANT: People may turn to him and say, hey look, we don't like what we're seeing in Jersey. We're going to try something different, and they may turn to a Bret Schundler.

INGRID REED, EAGLETON INSTITUTE OF POLITICS: But he's on the outside too much so that he really can't capture the centrist New Jersey voter.

CARROLL: Schundler says he'll take on McGreevey the same way he took on Franks, by sticking to his take on the issues.

Jason Carroll, CNN, New Jersey.


WOODRUFF: Many conservatives believe that Schundler's primary victory has made the New Jersey governor's race even more of a showcase campaign.

Our Bill Schneider is following this Garden State drama -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Judy, there's something happening in New Jersey besides "The Sopranos." Yesterday's primary turns New Jersey into a political proving ground. Democrats hope New Jersey will prove that the Republican Party has abandoned the mainstream. Conservatives hope New Jersey will prove that they can save the GOP in a part of the country where Republicans seem to be facing extinction.


SCHNEIDER (voice-over): New Jersey and Virginia, the two states electing governors this year, have been pretty good political bellwethers in the past. In 1989 they were bellwethers on the abortion issue. When the U.S. Supreme Court threatened abortion rights, the backlash helped get Democrats elected in New Jersey and Virginia.

In 1993 both states traded Democratic governors for Republicans. New Jersey and Virginia were the leading edge of the Republican tidal wave that engulfed the country in 1994. So what's the message of Bret Schundler's impressive, come-from-behind victory over the Republican establishment candidate?

For Democrats, it's clear enough: The Republican party has gone over the edge. The premise of their argument is simple: Schundler is unelectable. New Jersey voters might be willing to set those issues aside if they were really angry about taxes. But it's not 1993, when the backlash against Democratic Governor Jim Florio's tax hike swept all other issues aside.

Bill Clinton was president that year and Republicans were angry. Now Bush is president and it's Democrats who want to make a statement. After a bitter primary campaign...


UNIDENTIFIED FEMALE: The truth: Bob Franks offers only lies and attacks.


SCHNEIDER: Schundler could have problems uniting the Republican party. Acting Republican Governor Donald DiFrancesco describes himself as "very neutral" in the race. But the man Schundler defeated seems willing to let bygones be bygones.

BOB FRANKS (R), FORMER U.S. REPRESENTATIVE: We must come together and rally behind Bret Schundler. He deserves the opportunity to have a united party at his side. I intend to help lead that effort.

SCHNEIDER: Schundler does have some things going for him. Like his mentor, Jack Kemp, Schundler knows how to survive in hostile territory. He can bring new voters into the GOP.

SCHUNDLER: The Republican Party of this country is going to become increasingly white and black and Hispanic and Asian.

SCHNEIDER: Schundler is running, not just as a conservative, but also as an outsider, a man of plain-spoken convictions who takes on the political establishment, like John McCain, a conservative John McCain.


Democrats believe Schundler will frighten the voters. But you know Schundler's not a hater. He's a happy warrior.

WOODRUFF: But, Bill, what issue does he have to run on in this campaign?

SCHNEIDER: Well, he's looking for an issue that's going to propel him to victory and get voters to overlook his positions on abortion and guns. Well, taxes could be it if the economy continues to get worse. Voters put education at the top of their agenda this year. And Schundler is a very strong advocate of school choice which could be a good issue in a state with a lot of catholic voters.

But get this: Schundler wants to ban tolls on the Garden State Parkway. Now that could be a sleeper issue in a state where people are traditionally asked, "You from New Jersey, what exit?"

WOODRUFF: And in a state which is having some budget tightening problems right now.

SCHNEIDER: That's also true.

WOODRUFF: That's also true.

WOODRUFF: Bill Schneider, thank you very much. And this reminder: You can hear the rest of that "CROSSFIRE" discussion with Bret Schundler tonight here on CNN. CROSSFIRE airs at 7:30 p.m. Eastern.

How are states coping with the sluggish economy? Next on INSIDE POLITICS we will talk with two governors about the challenge of meeting budgets when the economy starts to cool.

Also ahead: Nearly a decade after the Clarence Thomas confirmation hearings, a new twist on the PR battle surrounding the nominee and his accuser.

And later, can Fed Chairman Alan Greenspan still move markets? We gauge the impact of another cut in short-term interest rates. This is INSIDE POLITICS.


WOODRUFF: The reality of a slowing economy has hit home this year in many state capitals. Governors and state legislatures around the country are struggling to meet their budget as smaller tax revenues and slower economic growth put a pinch on state balance sheets.

Two governors join me now to discuss the money matters facing state officials and other issues. In Toronto, Republican Governor Tom Ridge of Pennsylvania. He's the chairman of the Republican Governors Association. And from Jackson, Mississippi, Democratic Governor Ronnie Musgrove.

Gentlemen, I want to ask you first about the economy overall, and the move by the Federal Reserve today to lower the federal funds rate by a quarter of a point. To you first, Governor Musgrove, was that the right move?

GOV. RONNIE MUSGROVE (D), MISSISSIPPI: Judy, yes, it's the right move. It could certainly have been greater. However, there is a point that you have to reach that may not really be enough to turn this economy around. It is much more than simply a consumer-oriented economy, certainly it goes much deeper than that. And it will help. I don't know at what point in time Chairman Greenspan and the Federal Reserve will say, I don't know how much more this will help.

WOODRUFF: Governor Ridge, was this the right move at right time by the Fed?

GOV. TOM RIDGE (R), PENNSYLVANIA: I think the chairman continues to move in the right direction. I think at some point in time I think we also have to recognize that there was an inevitable shakeout, particularly in the technology community. You couldn't -- Nasdaq couldn't continue to exist on hope and aspirations and expectations at the end of the line.

There are some old rules that apply to the new economy and one of them happens to be profitability. So, I think we will see signs of the economy turning around. It certainly has put my fellow governors in some challenging positions dealing with budgets. Fortunately in Pennsylvania we still had a surplus. But I think the economy will move around slowly and I congratulate and thank the chairman. I'd like to see another 25 basis points or so.

But it's not just those raises. We had to have a shakeout. We have to endure it, but the economy is strong, it's diversified and we'll be moving ahead again soon.

WOODRUFF: Governor Ridge, you mentioned the states and it is true that at least half of the states have had to face a drop in their revenue projections. As you say, Pennsylvania has had a surplus. But at the same time it is down from the surplus that you had projected.

RIDGE: Correct.

WOODRUFF: You've also had to adjust your spending priorities. As you look at the state of Pennsylvania, who is getting hurt by all this? RIDGE: Actually, outside of Washington when you increase spending it is still some growth, and we are able to increase spending dramatically in the areas that are important to Pennsylvania, primarily education. We are just not going to grow some of those programs although we had an unprecedented boost in public education by about 4 1/2 percent this year.

But frankly we have controlled the growth of spending in Pennsylvania so for the 7th year in a row even though the surplus wasn't as great we were able to continue to cut taxes. So, we have managed our fiscal affairs the past seven years so it gave us a chance to absorb the sluggish economy and still establish priorities and fund them to the extent that the taxpayers wanted.

WOODRUFF: Governor Musgrove, what about in Mississippi. Where has your state had to cut back?

MUSGROVE: Well, Judy, who gets hurt when this happens are people. Those things that we do from a state standpoint are there to help our people. If you want the child to be educated then we need to make sure we have good teachers with the appropriate pay raises in place. We need to make sure we have technology in our schools. We need to make sure that our teachers have what they need to give a good education to our children which in turn will strengthen our entire state. So, it's our people who get hurt when we have a sluggish economy or when the spending is not in the party segment. Certainly our economy is down, but we have some spending caps and some safety nets in place. We only spend 98 percent of our budget and we have a 7 1/2 percent surplus as far as a savings account for when times like this come about.

So as a result, we're prioritizing our spending, focusing it on education, making sure that we continue to develop good incentives to strengthen our economy, solid health care and making sure that we keep a solid savings account in place to make sure that we are able to weather this downturn in the economy.

WOODRUFF: In somewhat of a connection I think you could say, with the economic issue, Governor Ridge in your neighboring state of New Jersey as you are very well aware, they had a Republican gubernatorial primary yesterday, the more conservative candidate, Mayor Bret Schundler won that primary.

His main issue has been economic-related but given his strong views, he is pro life, he is pro gun rights. Is this someone who can win in the populous suburbs of New Jersey, which is so similar to the suburbs in your state?

RIDGE: I will tell you that Mayor Schundler is probably one of the most exciting, dynamic young leaders within the Republican Party and he's got a proven track record. And I've got to believe that the Democratic State Party in New Jersey is a little anxious these days.

Here's a man who's been reelected twice in a predominantly Democratic city, Jersey City, and one of the reelections he got I think 45 percent of the African-American vote, he got 70 percent of the Hispanic vote. His message is cut taxes, empower power kids and parents and children through education reform, urban renewal, economic development. He's got a strong environmental message and a proven track record.

So I think it sets up, Judy, for a exciting race, a winnable race and I think the Republicans need to take the lead from the wonderful public servant, Bob Franks, who said last night and today at luncheon, we will unite behind our candidate.

WOODRUFF: Quickly, Governor, what about my question, and that is, can someone with his views on guns and abortion win in the suburbs of New Jersey?

RIDGE: I believe they can. I think that the key is if you look -- and I know the abortion issue is sometimes used by the other side to polarize Republicans, but the fact of the matter is in Pennsylvania, take a look at our two United States senators, both of them Republican, both have different views, there will be a united party in New Jersey to achieve that victory, we believe, is within our grasp in November.

WOODRUFF: And Governor Musgrove, a quick question to you about education reform. We know that president's -- the bill the president favors includes federal testing requirements, that critics are saying are going to raise the failure rate of students and are going to put more of the blame on the states. Is this the right way to move when it comes to education reform?

MUSGROVE: Judy, I believe that when we're talking about education the ultimate form of accountability is when a child walks out of the 12th grade does he or she have the tools to be successful. The only way we can measure that is through testing. Mississippi is already doing the testing that the president has proposed in his education bill.

We're not scared of the testing. We believe that it is the way in which that we are able to be accountable to the taxpayers and to the citizens. So we think it's the right thing to do. It's the direction to head, and we believe that our schools will be better but more importantly, our children will learn more as a result of better teaching, better teachers in the classroom, and a better way in which to learn it.

WOODRUFF: And finally, Governor Ridge, standards better set at the federal level than at the state level?

RIDGE: I think much better set at the state level. I think the president's proposal recognizing that historically public education is the primary responsibility of state governments, and local duly elected school boards has given us a broad range to use some of the national tests that are used by individual states.

But there are also some individual state tests. And through a combination of tests that the states are already using, we get that notion of accountability, performance evaluation, test our kids and help them where they are weak on the curriculum. So it's a great program.

WOODRUFF: So you disagree with President Bush on that? On this question of national testing?

RIDGE: No, the president has said, and I think appropriately so, as I've read the legislation, there are some national tests that a lot of the states use, but as I've read the Senate version we have the opportunity to use some of the state's tests. In Pennsylvania we call it PSSA It's a Pennsylvania Scholastic Achievement Test. We use it and we can integrate those tests along with the Iowa test, the Stanford test.

So there is plenty of flexibility to provide the kind of accountability that the president wants and I think our kids and parents need and deserve.

WOODRUFF: Gentlemen, we are going to have to leave it there. Governor Tom Ridge of Pennsylvania, Governor Ronnie Musgrove of Mississippi. Thank you both very much. We appreciate it. Good to see both of you.

The Clarence Thomas confirmation hearings and the battle for public opinion when we return. A writer made famous by his attacks on Anita Hill now says he's changing his story.


WOODRUFF: Washington journalist David Brock made his name as a crusading conservative writer, known for his defense of Clarence Thomas and his attacks on Bill Clinton. More recently, however, Brock has criticized his former allies on the right, and in the latest twist, Brock says he crossed the line in his effort to protect the reputation of Justice Thomas.

CNN national correspondent Bruce Morton has the story.


UNIDENTIFIED MALE: Do you swear to tell the truth, the whole truth and nothing but the truth, so help you God?


BRUCE MORTON, CNN CORRESPONDENT (voice-over): Remember the Clarence Thomas hearings? They featured Supreme Court nominee Clarence Thomas, saying he faced a lynching after statements from witness and former Thomas colleague Anita Hill, that he rented X-rated videos and subjected her to sexual harassment.

ANITA HILL, LAW PROFESSOR: He got up from the table at which we were working, went over to his desk to get the Coke, looked at the can and asked, "Who has put pubic hair on my Coke"?

MORTON: After a memorably ugly hearing, Thomas won confirmation to the high court. But the fight never really ended.

Now David Brock, who wrote a book calling Hill "a little bit nutty and a little bit slutty," has written a new book called "Blinded by the Right." In it, he says he demonized people connected to Anita Hill without ever interviewing them, and that in reviewing another book about the Thomas hearings, the award-winning "Strange Justice," he knowingly lied when he refuted evidence presented in the book that Thomas had rented pornographic videos.

"When I wrote those words, I knew they were false. I trashed professional reputation of two journalists for reporting something I knew was correct. I knowingly published a lie and I falsified the record."

JANE MAYER, JOURNALIST/AUTHOR: I'm glad he's finally telling the truth. I'm sorry he took so long to do it, but it's better that he correct the record, I guess.

MORTON: Others disagree. Brock declined to be interviewed for this report, but one man he quotes as passing information to him from Justice Thomas says no, that never happened.

Orrin Hatch was the ranking Republican on the Judiciary Committee during the hearings. SEN. ORRIN HATCH (R), UTAH: There is some indication by journalists in the profession that he is lately making a number of statements that seem to be made for purposes that are really questionable.

MORTON: Radio talk show host Armstrong Williams knows Brock, once worked for Thomas.

ARMSTRONG WILLIAMS, RADIO TALK SHOW HOST: I just don't think that David Brock knows what the truth is anymore. I think he's lost all perspective, and who can believe him now?

MORTON: Brock has gone confessional before. In 1998, he apologized for an article digging into then-President Bill Clinton's sex life, and said he thought his sources had exaggerated. The article mentioned a "Paula" and led Paula Jones to file her lawsuit against Clinton.


DAVID BROCK, JOURNALIST: I wrote an open letter to the president apologizing for the piece, saying that I think it was actually a bad idea, both journalistically and politically, to ransack somebody's personal life.


MORTON: Politics in Washington is a hardball game. The Clarence Thomas hearings were harder than most.

MAYER: I've never seen anything in my 20-some-odd years as a reporter that was quite as dirty as this fight, and quite as dirty as that piece that he wrote. I hope that it's an exception to the rule -- not the rule.

MORTON: Bruce Morton, CNN, Washington.


WOODRUFF: For more on these latest claims by David Brock, and their take on some other big stories here in Washington, I'm joined by Tucker Carlson, co-host of CNN's "CROSSFIRE," and Margaret Carlson of "TIME" magazine.

Margaret, what are we to make of what David Brock is now saying?

MARGARET CARLSON, "TIME": We don't know what to make because when somebody recants what they originally said, you have to draw their credibility into question. Which -- which one is true?

On the other hand, he was calling into question the reporting of some very good journalists like Jane Mayer, who was just on there, and Jill Abramson, who's now the Washington bureau of "The New York Times." And it's actually easy to figure out, if Senator Hatch wanted to. He and Senator Leahy could call David Brock in. This is the majority/minority on the Judiciary Committee, ask him, and they could call in Mark Paoletta, who is the one who said that...

WOODRUFF: Who was working for Clarence.

M. CARLSON: Who -- who...

WOODRUFF: He was the go-between.

M. CARLSON: He was the go-between, and it was said that he passed along this derogatory information about a witness, which intimidated her from coming forward. Well, ask him under oath. It's not that hard to do, and the denial that the go-between gave was that Clarence Thomas did not ask him to do it. It wasn't that Clarence Thomas didn't pass along the information. So I think that could be cleared up, and then we'd know.

WOODRUFF: Tucker Carlson, is that the way to go here?

TUCKER CARLSON, CO-HOST, CNN'S "CROSSFIRE": The confessions keep coming from David Brock. I mean, I keep waiting for him to cop to the Kennedy assassination. Look, this is apology as marketing tool. He's flogging a book. You know, he's apologized over the course of, say, three years for his various misdeeds, but they're not really apologies.

I think he's got a lot to apologize for. He had a hand in wrecking a great magazine, "The American Spectator," which is now not even really a political magazine. It's a business magazine, sort of a joke now, and that's partly thanks to David Brock.

I think he did practice shoddy journalism, and that admission alone calls into question everything that he says.

I must say, looking back, it is remarkable that real journalists, Jill Abramson and Jane Mayer among them, were writing long stories about whether Clarence Thomas rented porno movies or not. I mean, I do think when people beat up on journalism and say it's always in the gutter, we can look back 10 years and say actually we have moved forward. Stories like that would be considered too embarrassing to write now. And who cares?

WOODRUFF: Well, we just -- I mean, what do we do? Do we just sort of move on from here, or does this have any real effect on what we think about what happened 10 years ago?

M. CARLSON: Well, as Jane Mayer said in that interview, everyone was playing by dirty rules in that. It was so ideological, it was so inflamed, and people tended to believe what they were saying, I think, at the time. That's how inflamed it was. It's one of those that's not going to go away, I don't think. And it wouldn't hurt -- I don't think we need to rely on David Brock. We don't know what his motivations are, and as I said, we don't know which one is true. But it can be sorted out, and it's a very simple matter for the Judiciary Committee.

T. CARLSON: Well, I think we do know what David Brock's motivations are, and I don't think that he's ever full -- I mean, look, this is partly ideological, but I think it's mostly a marketing matter. I mean, if David Brock...

WOODRUFF: So you're saying he's just making this up?

T. CARLSON: No, I'm not saying he's necessarily making it up, but I'm saying that this is timed in a way to sell the book that he's attempting to sell. Look, if these are conclusions that he came to, say, three years ago, this was 10 years ago, this took place. We're learning about it now because the excerpt of the book has come out, and it's a matter of marketing. And I just think David Brock has discredited himself so completely by this point that this doesn't add anything to the story at all.

WOODRUFF: All right. Let's move from the Senate in 1991 to the Senate in 2001 and patients' bill of rights, our favorite subject this week.

Margaret, we have a number of defeats now for Republican amendments to the Kennedy-Edwards-McCain patients' bill of rights -- their version of patients' bill of rights. Does that mean this bill is now home free in terms of Senate approval?

M. CARLSON: It may not be home free, but it's been a train rolling down the track with a lot of force behind it. And when Bush said yesterday, or let it be known, that he was flexible on the details, I think that was -- you can translate that and say he's not going to veto it. He does not want to veto a Patients' Bill of Rights.

And it's the Kennedy-McCain that has the force behind it, and I think that will prevail.

T. CARLSON: I don't think there's any question. I mean, I they've got him in a complete armlock here, and this is...

WOODRUFF: Even though he said he wouldn't veto a bill like this, with this language.

T. CARLSON: Right. I mean, well, look, that admission right there gives you a sense of where this is going. We are going to get a patients' bill of rights, and when Daschle says, first upon coming the majority leader, says, look, this is the key issue, he's not just saying this is the key issue as a matter of legislation, but this is going to be the key issue in 2002.

M. CARLSON: Republicans can't go out in '02 and explain a veto in an ad that's run against them. I think that's a big part of it. The bad thing is that both parties should really be ashamed of this bill, because it doesn't do that much in the end. It gets people who already have insurance out of 1-800 voice-mail hell. That's what it does. It puts the person on the other end of the line wanting to help you, as opposed to limit your care, because there might be a lawsuit down the road.

T. CARLSON: Well, I think it does a ton, a ton, for trial lawyers. I think that in the end -- no, really, you don't think that this will enrich tons of personal injury attorneys. You know it is! M. CARLSON: No. Every place that it has been tried, the flood gates have not been opened to...

T. CARLSON: You're talking about...

M. CARLSON: No, five states.

WOODRUFF: Well, we are enriched every time. Tucker Carlson and Margaret Carlson, thank you both.

M. CARLSON: Thanks, Judy.

WOODRUFF: Great to see you. See you next week, if not sooner.

Grief and anguish in Texas today, as a community says goodbye to five children who police say were killed by their mother.

When we come back, a live report from Houston, and a look at some other top stories.


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

In Houston, the five Yates children were buried today after tearful eulogies by their father. The children's mother remains under suicide watch. Police say she has admitted drowning the children in the family's home. CNN's Ed Lavandera reports on today's chapter in a horrible family tragedy -- Ed?

ED LAVANDERA, CNN CORRESPONDENT: Judy, we're near in the end of what has been a long, emotional day for Russell Yates, as you mentioned. He had to deliver the eulogies for his five children, who were allegedly murdered by their own mothers at the Clear Lake Church of Christ church, which is just a few block away from where the family lived.

This afternoon, memorial -- after the memorial services ended, the final services were held at a brief cemetery, about five miles away from here, brief ceremony there, and a very emotional Russell Yates this afternoon. As he walked way from that service, he put his hand on each of the caskets, saying good-bye one final time.

During his eulogies he talked about each child and offering very personal anecdotes about each individual child, saying, he was thankful to get to know each and every one of them. He called them my friends and at one point in the service he put a baby blanket each of the child's caskets and said that, I love you, my friend, I will miss you, my friend.

And obviously, as you mentioned, Andrea Yates not allowed to be here today. But she did not go unmentioned. The programs that were handed out to visitors and families who attended the services today, said that the child -- the children were survived by their parents, Rusty and Andrea Yates, a mention there. And there were also pictures -- a collage of pictures at each child to the entrance of the sanctuary, so that all the visitors and families could see them and a number of pictures included a smiling Andrea Yates.

As you mentioned, Judy, she is in the Harris County Jail tonight under a 24-hour supervision by medical doctors, and that is where she is tonight. Not able to share at this moment. And as we mentioned, a long and sorrowful, tearful day for Russell Yates -- Judy?

WOODRUFF: All right. Ed Lavandera reporting from Houston. Thank you.

Gruesome testimony on Capitol Hill. A former Chinese army physician said reports are true that China harvests the organs of executed prisoners for profit. The doctor is now seeking asylum in the U.S. CNN's Eileen O'Connor reports.


EILEEN O'CONNOR, CNN CORRESPONDENT (voice-over): Wang Guooi told congressional hearings as a doctor, he worked in the execution grounds like this one in China, helping others to operate in nearby ambulances, harvesting the organs of prisoners and later carving off their skin for use on burned victims.

WANG GUOOI, FORMER CHINESE MILITARY DOCTOR (through translator): Inside the ambulance, the best neurologist surgeons removed both kidneys and rushed to the waiting recipient at a hospital. Meanwhile our burned department waited for the execution of the following three prisoners and followed their corpses to the crematorium, where we remove the skin in a small room next to the furnaces.

O'CONNOR: The final straw came when he helped take kidneys and the skin from a prisoner who wasn't even dead yet.

WANG (through translator): The prisoner had not yet died, but instead, laid convulsing on the ground. We were ordered to take him to the ambulance anywhere where neurologist (UNINTELLIGIBLE), extracted his kidneys quickly and precisely. When they finished, the prisoner was still breathing and his heart continued to beat.

O'CONNOR: Wang is speaking political asylum in the United States. According to human rights activist Harry Wu, Chinese government documents show Beijing is actively helping military hospitals make big money, selling the skin, corneas, kidneys and livers of executed prisoners. Money, he says, sometimes comes from Americans.

HARRY WU, HUMAN RIGHTS ACTIVIST: Some brokers happening in New York, Los Angeles, OK. You can go to China, stay in a hospital, have a surgery -- a kidney for a foreign patient probably costs $30,000.

O'CONNOR: The Chinese Embassy did not return calls, asking for the response to the allegations, but has denied involvement in the sale of organs for the profit, saying, it's against Chinese law. Still, the U.S. State Department continues to press the issue in meetings with the Chinese as recently as this week. MICHAEL PARMLEY, DEPUTY SECRETARY OF STATE: Anecdotal and circumstantial evidence regarding the practice of removing organs from executed prisoners for sale to foreigners and wealthy Chinese is substantial, credible, and growing. It cannot be ignored.

O'CONNOR: Republican Congresswoman Eliana Ross Leighton and other members of Congress have introduced a resolution, to prohibit visas for any Chinese physician seeking transplant-related trading in the United States. One U.S. doctor says that patients who bypass waiting lists and purchase black market organs are also guilty.

DR. THOMAS DIFLO, NYU MEDICAL CENTER: Four or five patients whom I have not seen before came to our office for follow-up care. They were all young Chinese Americans, with new transplant, recently returned from China.

O'CONNOR (on camera): The business of organs for sale occurs in other countries. But human rights activists saying that alleged practice of coercing or not even getting consent from condemned prisoners in China and then timing their executions for the benefit of organ recipients is, they insist, even more morally despicable.

Eileen O'Connor, CNN, Washington


WOODRUFF: The Fed takes action again in hopes of boosting the nation's flagging economy. We'll have more on the move and what it means to you when INSIDE POLITICS returns.


WOODRUFF: In another attempt to steer the economy away from possible recession, the Federal Reserve today cut a key interest rate for the sixth time this year. The cut was only a quarter of a point after cuts of a half-point earlier this year.

We are joined now by CNN "MONEYLINE's" Lou Dobbs.

Lou, hello there, and first of all, we know that a number of analysts were predicting that the Fed would make a more aggressive cut. Why do you think that they went with just a quarter point?

LOU DOBBS, CNN ANCHOR: Well, Judy, as you say, not only many analysts, but nearly every investor was hoping for a full half-point cut. The reason the Fed probably took the half measure, if you will, was we're seeing some evidence that this economy is beginning to stabilize, and this gives the Fed the opportunity to tweak a bit, if you will, over the course of the next 6 weeks, about 6 weeks, before their next meeting.

So, the quarter point prudent, but a half measure, certainly, at least in the eyes of most investors.

WOODRUFF: Lou, we saw what the -- at least the reaction of the Dow Jones Industrials were today. What do you think the markets are going to do from here on out, and what about the effect on the economy overall?

DOBBS: Well, in terms of the economy, we're starting to see some positive things. About $38 billion in tax cuts will be moving back into on the private sector here in the course of the next month. We're going to see, of course, the affect of this rate cut. The lag time, the first rate cut coming on January 3rd of this year. We're going to start to see some of this pulse into the economy and to give it some, hopefully, some renewed vigor.

In terms of what will happen to the markets, of course, the idea is that markets will rise. They have, over the course of the last 21 years in which the Fed has cut rates. We've seen the Dow Jones Industrials rise by at least -- at least 20 percent. And usually, usually those increases come in the second half of the year, so we have a real opportunity here to see the market move.

Now, whether that happens or not, a lot of people have lost a lot of money guessing, and at this point everyone is guessing.

WOODRUFF: All right. Well, Lou Dobbs in New York, thanks very much, and we'll see you about 6:30 Eastern time.

DOBBS: You've got a deal, Judy.

WOODRUFF: All right. For much more on the rate cut, at we're saying, including reaction from financial experts and what it could mean for investors, do stay tuned to CNN for "LOU DOBBS MONEYLINE." It will be coming up right after INSIDE POLITICS at 6:30 p.m. Eastern.

Former presidential candidate Bob Dole is in the hospital. We'll tell you why, just ahead.

And later, a possible turning point in California's energy crisis. After months of blackouts, relief is finally on the way.


WOODRUFF: Former Republican presidential candidate Bob Dole is recovering from surgery at the Cleveland Clinic. The 77-year-old former senator underwent a procedure this morning to repair an abdominal aneurysm. For an update now on his condition, we're joined by our senior political correspondent Candy Crowley -- Candy?

CANDY CROWLEY, CNN POLITICAL CORRESPONDENT: Judy, in the words of his spokesman, everything went just perfectly. And as it happens, that's pretty much what Bob Dole's doctors say.


DR. KENNETH OURIEL, CLEVELAND CLINIC: A stent graft was placed through two small incisions at the top of the senator's thighs. This avoided the traditional method of repairing the aneurysm through an open-surgical technique. The senator tolerated the procedure very well and is in excellent condition at this time.

(END VIDEO CLIP) CROWLEY: Doctors say Senator Dole is not in ICU but is, rather, in a regular hospital room. They expect that he will stay recuperating in Cleveland until the end of this week, about Saturday. His office believes he will be home Saturday, and say that he told them that he'd be back at work on Monday.

Now, his doctors say it may take 10 days or so for him to be up and about. Judy, you know Senator Dole. I'm kind of betting on him.

WOODRUFF: Well, you know, he found out about this condition some time ago, and they told him all along that he should do something eventually, but there wasn't an urgency to get this done, was there? .

CROWLEY: There wasn't. I mean -- he had a routine physical about five and a half weeks ago and they said, you've got to do this now, but they'd been watching it for a couple of years. And one of the things I think you'll see is that -- his spokesman says, look, this is a guy that sort of runs against type, as a male. He really does go and get a physical regularly, and they say why, you know, he's going to be 78 next month, he is, according to a spokesman, "ridiculously healthy."


WOODRUFF: Remarkably strong.

Well, Senator Dole, we hope you heal fast. We'll look forward to seeing you back in town.

Candy Crowley, thanks very much.

CROWLEY: Absolutely.

WOODRUFF: More political fallout over President Bush's decision to halt Navy training on the Puerto Rican island of Vieques. Details ahead.

And later, shocking evidence that doctors are being taught how to milk, and sometimes bilk, Medicare and Medicaid at the expense of taxpayers.


WOODRUFF: A bombshell in the Pentagon budget: Many B-1s may be headed for mothballs.

As Israel's prime minister makes the rounds in Washington, our Bill Schneider offers an inside view of his talking points.

And later: A switch in California's energy crunch.

Welcome back to INSIDE POLITICS.

After Presidential Candidate George W. Bush promised the military that "help is on the way," there apparently are some grumblings today at the Pentagon about the administration's proposed defense budget for next year. CNN's David Ensor has been reviewing what is in the $329 billion spending plan and what has been notably left out.


DAVID ENSOR, CNN CORRESPONDENT (voice-over): The budget proposal raises defense spending by $18 billion, with billions more for research and development of missile defense systems, including sea- based systems, and billions more for military pay, housing and medical care.

DONALD RUMSFELD, DEFENSE SECRETARY: The people of this institution are central to its success, and that means we have to take steps to see that the facilities are improved. You can't ask people to live and work in the kinds of facilities we have in too many places.

ENSOR: But the surprise proposal to cut a third of the B-1 bomber fleet, closing B-1 programs in three states, including Georgia, for a savings of $165 million next year, is getting attention and causing dismay on Capitol Hill.

SEN. MAX CLELAND (D), GEORGIA: It was very disjointed, very uncoordinated, and we were completely left out of the process, completely shocked and completely surprised. That's not the way you do a downsizing of a major weapons system.

DOV ZAKHEIM, UNDERSECRETARY OF DEFENSE: There was certainly no deliberate attempt to blindside anyone.

ENSOR: Congressional cynics noted that the two states that keep B-1 bombers under the plan happen to be Texas and South Dakota, homes of the president and the Senate majority leader. The proposed budget also retires all 50 peacekeeper MX long-range nuclear missiles.

Some senior military brass are disappointed with the budget, they say they had been told the increase would be more than $30 billion, not less than 20, and makes relatively few changes in weapons procurements, given President Bush's promise to update the nation's military for the post-Cold War world. Secretary Rumsfeld said they would come after the study in next year's budget.

RUMSFELD: You can simply not do everything in a single year. There is no way it can be done.

ENSOR: And there still is the question, experts say, of where the money will come from for the kind of 21st century military weaponry Rumsfeld and the president have talked about. Given the $1.35 trillion dollar tax cut.

UNIDENTIFIED MALE: The only answer, apart from gutting domestic programs or resetting the tax cut, are to give Mr. Rumsfeld the very hard job of cutting some weapons, cutting some forces, things Rumsfeld so far has not shown any interest in doing.

(END VIDEOTAPE) ENSOR: For instance, administration officials said they believe some 25 percent of military bases may be unnecessary, but to cut some of those would have produced even more anger on Capitol Hill. It was not done -- Judy.

WOODRUFF: David, the Pentagon bracing for criticism from the Hill?

ENSOR: Well, certainly on the question of the B-1 bomber, and we understand that Senator Cleland and others are going to try to stop this change. They're saying that in fact in subsequent budgets, they will have to cut military bases and some other major weapons programs to make room for the kind of post-Cold War military that the Bush administration wants to have -- Judy.

WOODRUFF: All right, David Ensor at Pentagon. And just to add a little bit to what David was referring to, there we do have a news release put out by the office of Senator Max Cleland of Georgia, concerned as he states here what he calls $100 million investment in new infrastructure at Warner Robbins Air Force Base in Georgia. Senator Cleland asking whether the cut in the B-1 is necessary, is it cost effective? Where is the data to support it? And going on to say, he will propose an amendment to disallow the Pentagon to stipulate the 2001 funds not be used to advance this Pentagon budget unless he gets satisfactory answers from Secretary Donald Rumsfeld.

Secretary of State Colin Powell arrived in Israel today to try to bolster the U.S.-brokered truce in the region. Powell said it would be up to Israel to decide when the level of violence had eased enough to take another step in the peace process, as outlined by the United States' Mitchell Plan.


COLIN POWELL, SECRETARY OF STATE: We hope that progress continues, it keeps moving in the right direction, and that all parties will do everything they can to keep them moving in the right direction, and then we will have enough elapsed time under circumstances of quiet where the parties together believe they can move into a cooling-off period. And we will be monitoring that, of course, and encouraging the right kinds of action to move in that direction.


WOODRUFF: Powell spoke about his expectations during a stop in Egypt after meeting President Hosni Mubarak.

Israeli Prime Minister Ariel Sharon, meantime, has been wrapping up his visit to the United States. Mr. Sharon met with Congressional leaders, a day after he and President Bush discussed their different outlooks for peace during a one-on-one at the White House. Prime Minister Sharon also met with a number of Washington journalists today including our own Bill Schneider.

Bill, what about those differences with the United States? What emerged in your conversations with the prime minister today in terms of what they don't agree on?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: About what they don't agree on is essentially what the next step is. Mr. Sharon says the United States insists on 100 percent of effort by the Palestinians to end the violence. He insists on 100 percent of results. He does not want to move forward to the cooling-off period until there is no violence for at least 10 days in the Middle East. And the White House believes that may be unrealistic. So far, he says they do have an understanding of what each side wants.

WOODRUFF: So he's holding the Palestinians to a higher standard than is the Bush administration?

SCHNEIDER: Absolutely. He said he will not negotiate under the threat of terrorism. That's the core principle of what Sharon believes. He says if you negotiate under the threat of terrorism, then terrorism is essentially legitimized as part of the bargaining process, and he would betray his mandate to the Israeli voters if that were to happen.

WOODRUFF: What is his view, Bill, after listening to him, of the U.S. role? Is the U.S. doing enough in his view to advance the process of peace?

SCHNEIDER: He believes the U.S. role and the Israeli role, basically are the same. They have the same interest, namely, stability in the Middle East. But there is a big difference insofar as tactics, how do you get there and timing. He says Israel is patient, Israel can wait, its waited 50 years so far for Arabs to recognize Israel's legitimate right to exist and they haven't done that yet.

He argues that Israel will wait longer, it wants interim agreements and is looking for nonbelligerency right now, and put off talk of a final peace deal for some time. The administration wants stability, but it wants it faster. It does not believe time is on its side, and wants to see progress more immediately. Same interests, different timetable.

WOODRUFF: Finally, Bill, he had some very interesting comments about Yasser Arafat. Tell us about that.

SCHNEIDER: He certainly did. He said Arafat can only be trusted when he is under pressure, when he is isolated, then he can make a deal for peace. In fact, he pointed out after Arafat was isolated, because he embraced Saddam Hussein in the Gulf War, then he took steps against the hamas terrorist organization.

This year, after the suicide after the discotheque in Tel Aviv, Arafat was once again isolated in the world and he agreed to a cease- fire. His point was, don't give our Arafat the red carpet treatment. Don't praise him. Don't treat him as a statesman or a world leader. In fact, he said Bush was in agreement with that because he kept repeating what Ronald Reagan said, trust but verify. So he thinks Bush takes the same view of Arafat than he does. One difference certainly is that Arafat does believe that the threat of violence is a bargaining chip. Because that's what his understanding of land for peace is about. You give us land, we remove the threat of violence. So there is a fundamental understanding there between the Israelis and Palestinians over what comprises a legitimate bargaining chip.

WOODRUFF: Bill, just to clarify, the president has now met with Sharon on two occasions.

SCHNEIDER: Two occasions.

WOODRUFF: He has not met with Yasser Arafat?

SCHNEIDER: He has not met with Arafat. Arafat has not been invited to the White House. So therefore, Sharon believes that the United States agrees with Israel, that when Arafat is isolated and under pressure then he can make and will make concessions.

WOODRUFF: All right, Bill Schneider thanks much. In on that meeting this morning with Israeli Prime Minister Ariel Sharon.

The Bush administration took more heat from members of Congress today for its decision to abandon bombing exercises on the Puerto Rican island of Vieques in the year 2003. But in a House Armed Services Committee hearing, Pentagon officials defended the move. In Puerto Rico the wife of the Reverend Jesse Jackson was released from a federal prison outside San Juan nine days after her arrest for protesting the Navy drills.

Jacqueline Jackson had been sentenced to 10 days behind bars, but her release was moved up. On Capitol Hill meantime, some House Democrats are investigating how Mrs. Jackson was treated.


REP. JOHN CONYERS (D), MICHIGAN: She was subjected to repeated and outrageous treatment by the Department of Justice merely so our government could send a chilling signal to other would-be protesters. In my view this is a -- this makes Jackie Jackson a modern-day political prisoner.


WOODRUFF: Representative John Conyers there. Meantime, the U.S. Justice Department says Mrs. Jackson's experience in federal prison is standard, and the same as what other inmates go through.

In another face-off between the Bush administration and Congress, the White House pledged today to try to reverse a House vote limiting Mexican truckers access to U.S. roads. The measure was sought by Democrats and the Teamsters' Union. Its passage yesterday in the GOP- controlled House was not expected.

Mr. Bush had announced plans to let Mexican trucks start making deliveries in this country beginning next January in compliance with the North American Free Trade Agreement.

California opens its first new power plant in more than a decade. Next on INSIDE POLITICS: Power politics in the Golden State and the long road ahead to achieve real relief.


WOODRUFF: The state of California's first new power plant in 13 years is officially online. The electricity generated by the new Sunrise Power Plant represents just a fraction of the state's upcoming summer power needs. But more new plants are on the way. For the latest, lets join CNN's Casey Wian in Kern County, California. Casey, where is that?

CASEY WIAN, CNN CORRESPONDENT: It's about 40 miles west of Bakersfield and it's awfully hot out here, Judy. Just about 6 months ago, if you looked behind me, you see nothing but a dirt field. But now after six months of 18-hour work days, six days a week, and a streamlined permitting process, the Sunrise Power Plant is online. Initially will produce about 300 megawatts of electricity. That's enough for about 300,000 homes.

When it gets up to full capacity in about two years, it will produce enough power for about a million homes. Now as you mentioned that is a drop in the bucket in terms of California's entire electricity shortfall this summer and California Governor Gray Davis however says it's only the beginning.


GOV. GRAY DAVIS (D), CALIFORNIA: As you well know, my administration has worked night and day to license new plants. We have licensed 16 plants. Nine are under construction, and today I'm very pleased to officiate at the opening of the first major power plant that has been built in California since 1988. The Sunrise Plant is a thing of beauty. I never thought I'd say that about a power plant but it's tremendous that we have this plant on-line 32 days early.


WIAN: Davis says this is the beginning of the end of California's electricity crisis. Enough new generation will be brought online by August to power about four million homes, or all of the homes in the city of Los Angeles. Davis, however, admits that blackouts remain likely this summer, and so far, one of the keys to his efforts to get out of the electricity crisis, a rescue plan for nearly bankrupt Southern California Edison has not received approval by state lawmakers.

And Edison officials today at this plant, they're co-owners of this plant, admitted that if that plan is not approved by the state legislature Edison is likely to follow its counterpart, Pacific Gas & Electric, into bankruptcy later this year. It's another reminder that no matter how many power plants are built in California, the solution to this electricity crisis is still a long way off -- Judy. WOODRUFF: Casey Wian from Kern County. Thanks very much, Casey.

One more note on California politics. A potential challenger to Governor Gray Davis will join us here tomorrow on INSIDE POLITICS. Outgoing Republican Mayor Richard Riordan of Los Angeles will be our guest. Mayor Riordan leaves office this weekend, and he discussed a possible run for the governor's office just yesterday at the White House.

Taped evidence of how doctors commit health care fraud. Coming up next on INSIDE POLITICS, lawmakers hear about seminars designed to teach doctors how to break the law.


WOODRUFF: On Capitol Hill today, investigators played audiotapes that revealed what were described as seminars designed to help doctors cheat on their insurance billings.

CNN medical correspondent Rea Blakey has more on the tapes and the larger issue of health care fraud.


REA BLAKEY, CNN CORRESPONDENT (voice-over): The 13-month undercover investigation by the Government Accounting Office is based on two billing seminars for doctors conducted in the Washington D.C. area. Consultants allegedly recommended practices in violation of federal Medicare and Medicaid billing guidelines.

During the seminars, doctors were told how to creatively overcharge insurance companies, including how to bill for care not provided, or provided by a non-physician assistant, reducing access to doctors for patients with lower-paying insurance, and telling doctors not to report overpayments from insurance companies: a violation of federal law.

In one example provided to the Senate Finance Committee the consultant suggests doctors restrict access for Medicaid and Medicare patients.


UNIDENTIFIED MALE: We still have a lot of Medicare and Medicaid, so here's what we do. We don't want them taking the best appointment slots. So they get scheduled only 10:00 to 11:30 in the morning and 2:00 to 3:30 in the afternoon. That's it. Now there are always exceptions, but we didn't want them getting the best appointment slots. We want the best appointment slots to go the best payers.


BLAKEY: The Coalition Against Insurance Fraud says health care fraud in the U.S. cost $54 billion in 1997. How can they get away with it? One word: Documentation. LEWIS MORRIS, HHS DEPARTMENT: If someone is intent on defrauding us, they will have -- in quotes -- built the better mousetrap. They will have the paperwork in place, so it will appear that this is a legitimate service, appropriately billed.

BLAKEY: The senator who called for the investigation is also asking for better regulation of the health care consultant industry.

SEN. CHARLES GRASSLEY (R), IOWA: There is no mandatory accreditation or certification of health care consultants. Anyone can put out a shingle and call themselves a health care consultant.

BLAKEY (on camera): Doctors who followed the advice of unscrupulous consultants could find themselves facing civil, even criminal charges.

Rea Blakey, CNN, Washington.


WOODRUFF: A Senate committee today heard testimony on the U.S. Civil Rights Commission study of Florida's presidential election results. The commission, which approved its report by a 6-2 vote, recently concluded that ballots cast by black voters were ruled invalid in disproportionate numbers.

At the hearing however, commission members who dissented from the report said that the finds were not supported by the evidence. Florida's Secretary of State Katherine Harris did not attend this hearing, but she issued a statement.

According to Harris, quote, " Instead of helping to create a blueprint for an election system that no American ever doubts whether his or her vote counts, the majority have crafted a battle plan for politicians interested in wielding the sword of racial division." End quote.

After several weeks on a working leave, Massachusetts' acting governor heads back to the office. The story, when INSIDE POLITICS returns.


WOODRUFF: That's a picture of our man, Bill.

For the first time since giving birth last month, Massachusetts Acting Governor Jane Swift is back at the state house. Swift got right down to business today, unveiling a $150 million tax cut plan for working families.

The governor has carried out her duties from home since delivering her twin girls. While on a working maternity leave, she chose not to hand over her duties prompting comments from some of her critics. No sign of the babies today. That's all for this edition of INSIDE POLITICS. But of course you can go online all the time at CNN's The AOL keyword, CNN. Our e-mail address is

And this programming reminder, the new Republican gubernatorial nominee in New Jersey, Bret Schundler, will be the guest tonight on "CROSSFIRE." That's at 7:30 p.m. Eastern. I'm Judy Woodruff. "MONEYLINE" is next.



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