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As Budget Surplus Declines, White House Calls on Congress to Restrain Spending; Bush Administration Scales Back Plans for Drilling in Gulf

Aired July 2, 2001 - 17:00   ET

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


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

President Bush, by the numbers: Is he taxed by a shrinking budget surplus or by his standing in our new poll? Is the sun setting on a dispute involving Florida's coast that pits one Bush against another?

And...

(BEGIN VIDEO CLIP)

REV. ALEX HURT, HURT INNER CITY MINISTRIES: I came down here tonight to tell you that exodus is coming!

(END VIDEO CLIP)

ANNOUNCER: ... a minister with a compelling personal story shares his views on adversity, religion and politics.

(BEGIN VIDEO CLIP)

HURT: Neither party has made room for people who are returning to religion in droves. Exodus is coming.

(END VIDEO CLIP)

ANNOUNCER: Now Judy Woodruff takes you INSIDE POLITICS.

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

The White House described it today as a wake-up call for Congress, a new estimate that shows the federal budget surplus is not quite as big as previously thought. But Democrats say, if there is cause to be alarmed, the president is at least partly to blame.

Our senior White House correspondent John King has more on the dispute and its political bottom line.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A shrinking federal budget surplus means a sharper debate over tax cuts and spending priorities. Not long ago, the government was projecting a surplus of $275 billion for the budget year that ends in September, but that projection is now down to $200 billion. The White House says the reason is simple: a slowing economy means the government takes in less money in taxes, but Democrats say the big Bush tax cut is at least partly to blame and they warn the administration will have no choice but to dip into Medicare funds to pay other government expenses this year.

ROBERT REISCHAUER, URBAN INSTITUTE: What the Democrats have is a good point, that we probably decided on this tax cut in hasty fashion, that we should have waited to see how the economy was going to unfold over the course of this year and what other demands were going to be placed on the budget.

KING: The White House says all Medicare money will go to Medicare, and that there will be no budget crisis if Congress shows discipline.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: So this is a wake-up call to the Congress not to spend tax dollars, because if they spend and go back on their spending spree, the Congress risks tapping Social Security's money and Congress should take no step that will put Social Security within reach.

KING: There already are plans for spending most, if not all of the surplus. Taking the Bush tax cut into account and if all Social Security and Medicare receipts are set aside, there still is a projected surplus of $1 trillion in the next decade, but the administration is looking to spend at least $250 billion more on defense. A Medicare prescription drug benefit could cost at least $300 billion. And an education bill before Congress has $150 billion in new spending over the next decade.

Those three plans alone would account for $7 of every $10 of the projected surplus, and that doesn't take into account billions more in additional tax cuts and spending initiatives before Congress, and emergency needs for things like farm aid and disaster relief.

(END VIDEOTAPE)

KING: And this debate will only intensify as the Congress considers all those individual appropriations bills over the summer and into the fall. By then, even as the president tries to hold the line on spending, the administration is hoping for at least just a little evidence that that tax cut is giving the economy a bit of a jolt and bringing more money into the Treasury -- Judy.

WOODRUFF: Well, John, as we hear the president and people in the White House appealing to the Congress to hold that spending down, are the members of their own party inclined to agree with them?

KING: Well, that of course will be one of this president's challenges. It already was the case that they tried to get the budget resolutions through the Congress. Part of this is the history. In the last few years of the Clinton administration, the surpluses kept growing and growing because the economy was booming. President Clinton wanted spending on some things. Republicans wanted spending on others. The compromise all those years was "Let's do both."

This time around, President Bush says the government can't afford it. Conservatives are a little happy about this. They believe that tax cut will force the discipline to keep spending down, but the appropriations process is just beginning.

WOODRUFF: All right, John, and turning to another topic, the president had a visitor today, the Republican nominee for governor in New Jersey?

JOHN KING: That is right. Jersey City Mayor Bret Schundler in for a little pep talk from the president and the vice president today. This, one of the increasing signs of the president's activity first in the two off-year gubernatorial elections in New Jersey and in Virginia. The White House also beginning to plan for the 2002 midterm elections.

Now the Democrats believe they have the advantage, if you will, in the New Jersey race. Their candidate is Jim McGreevey, who almost upset Christie Whitman the last time around, but Mr. Bush drawing a parallel with his guest today. He says the Democrats shouldn't be so confident.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We look forward to helping you become the governor of New Jersey. I think you and I share something in common: We're always underestimated, and a lot of people didn't think I'd be sitting here. Of course, a lot of people didn't think you would be sitting here either.

(END VIDEO CLIP)

KING: Now after that meeting, the president took off the jacket and the tie. He and the first lady, Laura Bush, traveling across town to the Jefferson Memorial, the White House saying the president wanted an opportunity simply to get outside of the White House, shake some hands of some tourists, wish them a happy 4th of July holiday, the president saying he's always proud to travel the world and brag about the values of the United States. He says he likes to look out the White House window every day over across to the Jefferson Memorial -- Judy.

WOODRUFF: All right, John King, at the White House. While the president was out taking a walk, Florida Governor Jeb Bush is commending his brother's administration today for reducing the scope of proposed oil drilling leases in the Gulf of Mexico. Governor Bush told reporters, "It's a win for the people of Florida," and he seemed to suggest that his relationship with President Bush was a factor in the administration's decision.

CNN's environmental correspondent Natalie Pawelski has more on the revised proposal that had put the Bush brothers at odds.

(BEGIN VIDEOTAPE) NATALIE PAWELSKI, CNN CORRESPONDENT (voice-over): As most people in the Sunshine State see it, Florida's popular Gulf coast is not the place to drill for oil and gas, but the Bush administration says you can tap into the energy reserves below this ocean and have clean beaches, too.

GALE NORTON, SECRETARY OF THE INTERIOR: You'll be able to stand in any beach in the state of Florida, and from it you will see no development from this proposed sale.

PAWELSKI: The interior secretary announced plans to open a 1.5 million acre offshore area to drilling. That's scaled down from a proposal inherited from the Clinton administration, which would have opened up 6 million acres and come within 17 miles of Gulf coast beaches. The new, smaller lease area would keep all drilling at least 100 miles offshore, an attempt to answer objections from Floridians in general, and from the governor in particular, the president's brother, Jeb Bush.

NORTON: I think this is a compromise that reflects all of the views that I heard.

PAWELSKI: Environmentalists say even a scaled-down plan is still a bad idea.

MELANIE GRIFFIN, SIERRA CLUB: Drilling off the Florida coast is drilling off the Florida coast. And it doesn't matter whether you're 130 miles or 100 miles. Oil spills are going to happen and this new proposal will be bad for Florida's fisheries and its economy and coastlines.

PAWELSKI: Still, Norton's announcement is the latest in a series of efforts by the Bush administration to appear more environmentally friendly. Just last week, for example, in a visit to the Energy Department, the president made a pitch for energy conservation. The politics are clear. Polls are showing public disapproval with the president's environmental policies. And last week, the Republican- controlled House of Representatives voted to block the offshore drilling plan entirely.

Natalie Pawelski, CNN, Atlanta.

(END VIDEOTAPE)

WOODRUFF: Now, we turn to Vice President Cheney's first day back on the job since he had, not a pacemaker, but a pacemaker plus, as he calls it, implanted over the weekend.

As CNN's Major Garrett explains, it was business as usual for Cheney, at least when he wasn't answering the most often-asked question, "How are you feeling?"

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): The vice president returned to work and plowed right into politics, joining President Bush in the Oval Office and offering this health update.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Very good. A little tender in the shoulder. It'll pass.

GARRETT: Aides say Mr. Cheney's taking Tylenol and nothing stronger for the pain. For his part, Mr. Bush offered a dose of humor.

BUSH: We were going to do some jumping jacks in here before you came in, but...

GARRETT: The vice president arrived at the White House shortly before 8:00 a.m. and spent the entire morning with President Bush and then promoted the president's energy plan in three talk radio interviews, like this one with WWVA in Wheeling, West Virginia.

CALLER: How's the ticker?

CHENEY: Well, it seems to be working pretty good. I'm sitting here at my desk, working away. So everything's fine.

GARRETT: Doctors installed the defibrillator Saturday, a low- risk outpatient procedure. But if Mr. Cheney had died or had become incapacitated, Mr. Bush would have had to select a new vice president and submit the candidate to the House and Senate, just as Richard Nixon did with Gerald Ford and Mr. Ford did with Nelson Rockefeller.

With the procedure a success, Mr. Cheney remains second in succession, followed by the speaker of the House, Dennis Hastert, and the Senate pro tem, Robert Bryd of West Virginia. Overall, analysts say Mr. Cheney's role in the Bush White House, while still vital, is evolving and the day may come when Mr. Bush doesn't lean on him as much as he once did.

THOMAS MANN, BROOKINGS INSTITUTION: I think it was more of a political issue potentially four or five months ago when the Bush administration was just coming out of the gate. Now they've had some time in office, some experience. Frankly, they're a little less dependent on Dick Cheney now.

(END VIDEOTAPE)

GARRETT: Dependent or not, Mr. Bush still relies heavily on Mr. Cheney's advice. but's he's not too demanding. After all, he OK'd a long 4th of July vacation for Mr. Cheney that begins Thursday in Jackson Hole, Wyoming -- Judy.

WOODRUFF: All right, Major Garrett.

He's not the only American taking a long vacation this week. The president and the latest polls, next on INSIDE POLITICS. Our Bill Schneider breaks down the new numbers and analyzes public opinion on the patients' bill of rights.

Also ahead, Senator John McCain and his critics. New criticism coming from within his own party. And later, a man on a mission and the people he says the politicians have ignored. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: The new CNN/"USA today:/Gallup poll has a fresh look at where Americans stand on the patients' bill of rights, the Vice President's health, and how President Bush is handling his duties in office. And for more, we are joined by CNN's senior political analyst, Bill Schneider.

First of all, Bill, what has been the trend in the President's job rating?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Judy, what we've seen is a gradual erosion in the president's support since he was at a 63 percent high back in March. Now his rating now is right at 52 percent. The fact it's hovering around 50 percent is being seen by some as a sudden crisis, but that's really not the case.

Remember, President Bush won the election with just under 50 percent of the vote. So really his support has been returning to his base level, which is, of course, not good news for the White House because the president needs to build on his base and not return to it.

The biggest problem for the White House? Bush has become an intensely partisan president. More like Bill Clinton than like Ronald Reagan. Republicans and conservatives are solidly behind him. Democrats and liberals are against him. He's been losing support among independents and moderates, the nonpartisan sector.

The president needs a unity initiative to reach out beyond his base. So far the movement has been in the opposite direction.

WOODRUFF: OK, Bill, we've been reporting on Vice President Cheney's health. We know there were some questions in the poll about that. What are you showing?

SCHNEIDER: Well, we're showing that people are not -- there's not mounting concern about the vice president's health. In fact, it's just the opposite. Concern over whether Cheney's health problems prevent him from serving effectively as Vice President had gone up to nearly 40 percent in March after his second hospitalization. And now the level of concern has dropped to 34 percent. This appears to have been a precautionary procedure, and there's no evidence that it's interfered with the vice president's ability to do his job.

Now who are the most concerned? Seniors. 42 percent of seniors express concern. Not surprising, seniors are the most sensitive to health issues, but the level of concern is even higher, highest of all among Democrats. 49 percent expressed concern, which means that partisanship has invaded an issue which should really not be partisan, whether the vice president is healthy enough to serve. That's further evidence that a kind of partisan poison is contaminating everything in American politics.

WOODRUFF: Well, speaking of being partisan, what are you finding whether the patients' bill of rights is viewed as something partisan?

SCHNEIDER: Interestingly, that's not a particularly partisan issue. And it -- because of that it could be a problem for President Bush. The public really does want a patients' bill of rights. 58 percent say they want Congress to pass it. Only 11 percent are opposed.

Now keep in mind that President Bush favors a patients' bill of rights, but a different version from the one that passed the Democratic Senate.

We asked people whether they trusted the Democrats or the Republicans more on the patients' bill of rights issue, and the Democrats had a slight edge 44 to 34 percent. To the public, this is not nearly as partisan an issue as it is in Congress. If Congress does end up passing something close to the Senate bill, President Bush would be under very strong pressure to sign it. A veto would be seen as a highly partisan act and politically damaging, which is why the president is relying on the House of Representatives to pass something that's more to his liking.

WOODRUFF: Because he said he would veto something close to what came out of Senate?

SCHNEIDER: That's right and that would be a dangerous thing, politically.

WOODRUFF: All right, Bill Schneider, thanks very much. Well, now for some more perspective on those new poll numbers and the political forces driving them, we're joined by columnist Ron Brownstein of "The Los Angeles Times."

Ron, how worried should the president, should the White House be about these new poll numbers?

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, they're not catastrophic, not a complete collapse, but they are, as Bill suggested, a reversion to his base. Everything we see in the polls suggested that really almost nothing has happened since last November. The people who voted for Bush by and large are satisfied with the job he's doing. His approval rating among Republicans in most polls have stayed up right around 90 percent, an incredible number, but he's not bringing over the people who didn't vote for him. He's not convincing those who were skeptical they ought to give him a second look.

Other than Bill Clinton, Bush is the only president to have majority disapproval this early in his presidency from rank and file voters in the opposition party. Consistently now we're seeing 60 percent or more of Democrats, and as Bill said, a rising percentage of independents saying they disapprove. And at that level of polarization in the country, there is a lid on your overall approval rating, which in turn limits leverage with Congress.

WOODRUFF: Can you look inside these numbers, Ron, and tell what exactly is hurting the president? I know Bill referred to that. BROWNSTEIN: Yeah, well, I think there are two separate -- I mean, I think the analysis is there are two separate anchors that are dragging him down. One is that he is president, and as president, he is sort of the inheritor of the conditions in the country. The sense of optimism about the way things are going in America is down. The "right track" number, which is the one most closely watched, is down from where it was a year ago. It's down in the low 40s. And inevitably that pulls down on the incumbent.

The other is that Bush I think is being seen as more partisan and to some extent a more special interest president than he portrayed during the election. Two separate numbers, the percentage of people who see him as conservative is probably higher than it was a year ago, but the Democrats believe that even more damaging to Bush is that -- partially because of the energy debate, partially because of the environment debate -- he is seen as a president who's concerned more about special interests than average citizens.

This, Judy, I think is the overlay for some of these debates. Patients' bill of rights, minimum wage, campaign finance reform are all coming up. If Bush is forced into the position of having to veto those, there are Republicans who fear that he cements that imagery that is pulling him down and exacerbates the problem that already exists.

WOODRUFF: Ron, what about the news now that the weak economy is pulling down the revenues for the federal government, therefore pulling down the size of the budget surplus? What is this going to do to the president's agenda?

BROWNSTEIN: Well, you know, they are really being squeezed from three sides at once on the budget. First of all, as you say, revenues are down because the economy is down. Secondly, the tax cut was accelerated and front-loaded from what he originally proposed. The whole idea of putting in a rebate to spur the economy increased the short run cost of this when the big, big surplus numbers are toward the second half of the decade -- toward, the second half, 2006 and beyond.

Third, spending, you know, spending is going up both because appropriators are not entirely living within the budget constraints. The White House is asking for more on defense. There's a prescription drug plan that's coming forward. So all of the forces push you toward squeezing the deficit.

And as John King's report said, Democrats are already raising a cry that he is going to spend into the Medicare surplus. Republicans are saying, Democrats are saying the real risk, Judy, though, is not that. That is the first firewall.

The second firewall is the Social Security surplus. And if we go into a deficit into the unified federal budget and drawing on a Social Security surplus, that could be a heavy burden for Republicans to run on 2002, much less push 2004. It took us 30 years to get out of deficit. And to have it go back in a matter of months would not be a good record to run on. WOODRUFF: Just quickly, the Bush tax cut in jeopardy?

BROWNSTEIN: Well, you know, look, it is phased in slowly. You know, we cut the rates now, cut them again in 2004, we cut them again in 2006. If the surplus goes down, you can bet that there will be Democrats out there arguing for preventing, maybe not rolling back what's already been done, but preventing the future cuts from going into effect. And I would not be surprised to see that in the 2004 campaign, 2002 campaign, especially if the surplus numbers shrank.

WOODRUFF: Just finally, Ron, John McCain out there lobbying Republican House members to support his pet cause, campaign finance reform. Now he's being criticized by the Republican speaker of the House, calling him -- saying he's bullying House numbers. What's going on?

BROWNSTEIN: We found a moment of unanimity between House, Senate and White House Republicans -- are all mad at John McCain. Look, McCain is pushing for this. They had a big margin to pass this bill in the House twice before. The White House and the congressional leadership, especially, are leaning on Republicans who voted for it to move away from it. McCain wants to keep the pressure on. He's going out and holding rallies next week with the House sponsors of the bill in Boston and New York, almost like a president or presidential candidate would do. It is a sign of what his national stature allows him to do, but the cost it imposes on him, which is more alienation from his party.

And we might see the same thing, Judy, on the patients' bill of rights, which he supports. And it'll be the same kind of effect. It passed the House once before. The leadership and the White House will be trying to peel them away, and McCain may be working to keep them with them.

WOODRUFF: Never dull when John McCain is around.

BROWNSTEIN: No, no, and it'll probably get more interesting before it goes in the other direction.

WOODRUFF: Ron Brownstein, thanks very much.

Well, meantime, talking about Senator McCain, he has been out front on several high-profile issues in this Congress, but his positions on those issues have often been at odds with the White House agenda, as Ron was just saying. Senator McCain's public role has kept his priorities at center stage, but some congressional Republicans are not happy with his move to win -- I feel like I'm repeating what I just said to you, Ron. As we've been saying, Republicans not happy.

And now for the very latest on that, let's turn to our CNN congressional correspondent, Kate Snow. She's on Capitol Hill -- Kate.

KATE SNOW, CNN CORRESPONDENT: Judy, let's talk a little bit more about those letters. As Ron mentioned, there were 24 letters that Senator McCain recently sent out, all to House Republicans, all to members who his staff feel are open to reform, and all to people that he campaigned with last fall. McCain political adviser, John Weaver, tells me that the letters were meant to build support simply for campaign finance reform, for a version of campaign finance reform that would look like what the Senate recently passed. The letter was essentially a form letter with some parts filled in about what event -- what particular event Senator McCain attended with that congressman and what place they were in when he attended that event.

But beyond that, here's how the letter reads. He says: "I remember our personal conversations about our shared passion for reform." And then he goes onto say. "Now you have the opportunity to fulfill the campaign promise you and I made together."

Senator McCain also making phone calls on this front this week to both Republicans and Democrats. Weaver, McCain's adviser, says that in his opinion, if reform is killed in the House, that would not bode well. He says Senator McCain may not be "as enthusiastic about supporting the 90 to 100 members that he says he supported and helped elect in 2000." All of this, as you mentioned, Judy, has rubbed some Republicans the wrong way. One Republican aide tells me they found the letter surprising. The Republican -- National Republican Congressional Committee chairman, Tom Davis, says that he finds it improper. He says: "House members should not be blackmailed into supporting campaign finance reform."

And then finally, House Speaker Dennis Hastert, as you mentioned, said that a senator -- as a senator, can't infringe on the rights of the House.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: I think Senator McCain shouldn't bully members of the House of Representatives. I don't care what party they're in. And they ought to be able to make up their mind on what piece of legislation they're going to pass based on the merits.

(END VIDEO CLIP)

SNOW: Now spokespeople for John McCain say that he is certainly not trying to bully anyone, but one House Republican who knows John McCain well tells CNN that this is typical vintage McCain, that he expects loyalty. He is a tough guy. Other Republicans, Judy, privately snickering about this a little bit. I'm told by senior Republican aide that they find it amusing that John Weaver said that he had supported or helped elect 90 to 100 members. This aide that I was talking to said that that remark is being seen as "delusional."

Back to you, Judy.

WOODRUFF: Kate, as John McCain travels around the country and promotes the causes that are near and dear to him, what sort of poll numbers is he looking at about himself?

SNOW: The most recent poll that CNN conducted, CNN/"USA Today" poll back in June, Judy, shows that he's actually doing quite well. In fact, he's doing slightly better among Democrats and Democratic voters than he is among Republicans. The numbers of Democrats, 65 percent have a favorable opinion of John McCain. Of Republicans, just 58 percent have a favorable view, but that's still a rather high number -- Judy.

WOODRUFF: All right, Kate Snow. See you later. The new twist in the search for the missing intern, Chandra Levy, is coming up on INSIDE POLITICS. And in the news headlines, ways to keep children safe around water during the 4th of July holiday.

(COMMERCIAL BREAK)

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

Hi, Bill.

BILL HEMMER, CNN ANCHOR: Judy, hello to you and thanks.

Police in Okinawa, Japan have issued an arrest warrant for a U.S. serviceman accused of rape, the Air Force sergeant suspected of attacking a Japanese woman in a parking lot. Some are concerned now the charges could renew anger over the presence of 26,000 troops on the Japanese island.

Negotiators for Hollywood actors and producers still talking to each other, trying to avert a costly strike. The Actors Guild contract expired Saturday night and marathon bargaining sessions have been under way ever since. Both sides say they are committed to reaching an agreement. The issues in question do affect the pay of actors earning less than $70,000 per year.

The July 4th holiday can mean fun at the pool or beach, but it can also mean an increase in the number of drownings. And now for the first time, researchers have national data to show where most swimming accidents occur.

With more on that, here's medical correspondent Rea Blakey.

(BEGIN VIDEOTAPE)

REA BLAKEY, CNN CORRESPONDENT (voice-over): A frantic call to 911. According to the National Institute of Child Health, drowning kills 1,500 U.S. children every year. The Lee family was fortunate. Thanks to 911, 8 month-old Andrew survived. Joseph Nelson was less fortunate. His 8 year-old daughter, Kendall, drowned in a neighbor's pool.

JOSEPH NELSON, FATHER OF DROWING VICTIM: I explained to both mother and the father, they had a -- again Kendall needed supervision. And she went on inside and basically that was the last time I saw her alive.

BLAKELY: National child experts now know where children of different ages are most likely to drown. DR. RUTH BRENNER, NATIONAL INSTITUTE OF CHILD AND HUMAN DEVELOPMENT: Infants are most likely to drown in domestic sites, such as bath tubs and buckets. Toddlers are most likely to drown in swimming pools, but about 25 percent of them drowned in other bodies of freshwater, like ponds and lakes. And older children were most likely to drown in freshwater sites, primarily lakes and rivers.

BLAKEY: How to keep kids safe? The American Academy of Pediatrics recommends children 5 and older be taught to swim. Adults should constantly supervise children in or around water. Install fencing to enclose pools. Teach kids never swim alone. Educate them about the dangers of drug and alcohol use during water activities. And parents should learn CPR. Also, rely only on U.S. Coast Guard- approved flotation devices. Anything else is just a toy.

CONNIE HARVEY, AMERICAN RED CROSS: If you seeing them relying on those toys a lot, are they taking chances that they may not have taken if they did not have those water aids on? And if they are, bring them back in and put them in a U.S. Coast Guard-approved life jacket that is the appropriate size for their size and weight.

BLAKEY: The drowning study found after age 5, African-American males had significantly higher rates of drowning than white males, 12 to 15 times higher at swimming pools. Researchers don't know why, but they say overcrowding at public pools or lack of a lifeguard may be to blame.

HARVEY: Parents should always have supervisions around their children whenever they are in, on, or around the water, including the backyard swimming pool, when they're fishing on the lake, or in the bathtub.

BLAKEY: Researchers hope the new information on where children drown will better focus warnings, which until now had been primarily targeted toward pool safety.

Rea Blakey, CNN, Washington.

(END VIDEOTAPE)

HEMMER: And a reminder: Stay with us. Coming up in a half hour, CNN's newest program, the "FIRST EVENING NEWS" comes your way. A wrap of all the day's news today, including a live report with Christiane Amanpour from The Hague, where Slobodan Milosevic is only hours away from his first court appearance before the U.N. War Crimes Tribunal. "FIRST EVENING NEWS," at 6:00 p.m. Eastern, 3:00 p.m. Pacific only on CNN.

Judy, about 27 minutes, we will see you then again, OK?

WOODRUFF: That's right. We'll be watching. Bill Hemmer, thanks.

And now let's go up to New York to Lou Dobbs, who has a look ahead on what's ahead on "MONEYLINE."

Hi, Lou.

LOU DOBBS, CNN ANCHOR: Hi, Judy.

Coming up on "MONEYLINE" tonight, United Airlines billion dollar deal -- $4 billion deal, in fact -- with U.S. Airways is dead. We will have the details for you on the breakdown of that deal.

And Prime Media buying EMAP's magazine unit, making it the second largest U.S. magazine publisher. We'll be talking with the company's chairman and CEO Tom Rogers.

And a top research scientist joins us tonight to talk about stem cell research, that controversial research and the possible benefits, such as the cure for cancer. And the potential risks of its research.

Also tonight, we'll be looking at CEOs on the edge, tonight focusing on Mark Hoffman of Commerce One. That stock is currently trading at more than 90 percent below its 52-week high. That's coming up at 6:30 Eastern right here on CNN.

WOODRUFF: Thank you, Lou. And we'll be watching you as well.

Here in Washington, police are taking their search for missing intern Chandra Levy to a new realm. That story, when INSIDE POLITICS returns.

And later, a minister who knows a thing or two about hard times shares his views on faith-based politics.

(COMMERCIAL BREAK)

WOODRUFF: Two months after Chandra Levy vanished, Washington police looking for clues about the missing government intern have added landfills and trash bins to their list of search sites. Our Bob Franken has more on the status of the investigation, and the latest on how Congressman Gary Condit figures in.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN CORRESPONDENT (voice-over): Washington police insist there is no new evidence of foul play involving Chandra Levy. They say their decision to search nearby landfills and dumpsters with cadaver-sniffing dogs is just to explore all possibilities, in what they say remains a missing persons investigation.

They are also trying to broaden the investigation by seeking an interview with Carolyn Condit, the wife of Congressman Gary Condit. FBI agents want to ask her about the contention Mrs. Condit was in Washington during the week Chandra Levy disappeared. Condit attorneys promise they will cooperate in making Mrs. Condit available.

Questions about the exact nature of the Congressman's relationship with the 24-year-old missing intern have fueled much of the attention on this case. Condit's office repeatedly denies the relationship was romantic. CNN has learned that police commanders complained to Chief Charles Ramsey that the media questions were so incessant they were distracted from their work. So Ramsey has ordered no more public comment unless there is a substantial break in the case.

CHIEF CHARLES RAMSEY, METROPOLITAN D.C. POLICE: There's nothing new to report. We don't know where Chandra Levy is. And we don't know what's happened to Chandra Levy. And we will continue to explore all possibilities and leads to see what we can come up with.

FRANKEN: Even so, detectives tell CNN they now have evidence Chandra Levy was last in her Washington apartment on May 1, a day later than the originally believed April 30. They have retrieved e- mail sent May 1 from the laptop computer they discovered in her apartment.

(on camera): Detectives say they attach little significance to the added day, but that they are looking closely at everything because, it now has been almost nine weeks since Chandra Levy disappeared.

Bob Franken, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: When INSIDE POLITICS returns, we head west. The new man in charge in Los Angeles. And his promises for the future.

(COMMERCIAL BREAK)

WOODRUFF: The new mayor of Los Angeles pledged today to unite the city after what many observers have called a nasty campaign. Democrat James Hahn was sworn in as the 40th mayor of L.A., succeeding term-limited Republican Richard Riordan.

In his inaugural address, that included a line in Spanish, Hahn reached out to the city's Hispanic population. And he promised to work closely with other city officials.

(BEGIN VIDEO CLIP)

MAYOR JAMES HAHN (D), LOS ANGELES: We will make the great city of Los Angeles strong by making the people of this city understand that we're stronger together, than if we go our separate ways. And we're going to do this, not by scaring or threatening our fellow citizens, but the old-fashioned way. By earning the trust of every single community.

And I won't do it alone. As mayor, I'm not going to head an isolated separate branch government. The mayor, the city attorney, the city controller, and the city council are all part of the same team. The Los Angeles team.

(END VIDEO CLIP)

WOODRUFF: In a runoff last month, Hahn defeated fellow Democrat Antonio Villaraigosa, who was seeking to be the first Hispanic mayor of Los Angeles.

All the way across the country of New York, outgoing-Mayor Rudy Giuliani's divorce saga may be getting more media attention than the race to replace him.

In the Republican primary contest, billionaire Michael Bloomberg has managed to grab a few headlines but the Democratic candidates seem to be having a hard time getting ink, even in that largely Democratic city. CNN's Jason Carroll has more on the Democratic field and their battle in the Big Apple.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): In a city, that is synonymous with drama and excitement, you may think that the next race for New York City's next mayor might be filled with a lot of both.

UNIDENTIFIED MALE: This city also has to keep its eye on the diversifying its local economy.

CARROLL: Not so. At a recent mayoral forum, the audience yawned and dosed through each candidate's speech. In the way of what happened in one room, is symbolic of what political analysts say, is going on city-wide.

DR. LEE MIRINGOFF, MARIST COLLEGE POLL: New Yorkers right now probably more concerned about the New York Yankees starting rotation than they are about who's going take the oath of office of mayor next January.

CARROLL: Why, look at the leading Democrats who are running and what they are saying.

Problem number one, they all pretty much sound the same.

Fernando Ferrer launched his campaign on Wednesday and talked about a familiar theme, education.

FERNANDO FERRER (D), N.Y. MAYORAL CANDIDATE: The New York where 1.1 million children, most of them black and Latino and Asian, poor and working class, attend public schools that are underfunded.

CARROLL: And then you have city (UNINTELLIGIBLE) Alan Hevesi.

ALAN HEVESI (D), N.Y. MAYORAL CANDIDATE: Number one, the greatest amount of energy and focus should be on school reform.

CARROLL: Next on the list of candidates, Democratic front-runner and public advocate Mark Green.

MARK GREEN (D), N.Y. MAYORAL CANDIDATE: On educating children, we haven't done well enough.

CARROLL: If what you are hearing is sounding familiar. Listen to the final Democratic candidates, city council speaker, Peter Vallone.

PETE VALLONE (D), N.Y. MAYORAL CANDIDATE: You have to really make this public education system work.

JOEL SIEGEL, POLITICAL CONSULTANT, "DAILY NEWS": Right now they are having a problem of distinguishing themselves. I think that most New Yorkers view them as four guys who have been around a while, who really don't disagree all that much on the issues.

CARROLL (on camera): It's not just that the candidates have a problem distinguishing themselves, they have a problem just getting voters to pay attention, partly because things are relatively good right now in New York City.

Crime is down and tourism is up, and incumbent Mayor Rudy Giuliani keeps capturing the headlines.

(voice-over): Although it's not for his crime-fighting efforts. Instead, it's for his nasty public divorce dispute with his estranged wife Donna Hanover.

DR. LEE MIRINGOFF, MARIST COLLEGE POLL: So in the middle of all that, you have these Democratic and Republican candidates trying to become mayor and they are competing for all of the other stories in the Big Apple.

CARROLL: Polls show, of them all, Green is leading them all, with Ferrer just behind. So the race could be a close one.

MAURICE CARROLL, QUINNIPIAC COLLEGE: I will bet my paycheck on it that there will be a run-off.

CARROLL: A run-off! Maybe New Yorkers will finally get the political excitement in this race that they have been looking for.

Jason Carroll, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: Back in California, Gray Davis has canceled a public relations deal with two high-profile political strategists. Davis announced Friday the state will no longer employ former Clinton White House Spokesman Mark Fabiani.

The governor also announced former Gore campaign spokesman Chris Lehane will remain on the state payroll, but at a reduced salary. Fabiani and Lehane were supposed to receive $30,000 a month for six months as communications strategists for the governor. The original deal was criticized by state Republicans and Lehane will now receive $9,900 a month.

WOODRUFF: Beyond the usual recipe of mixing politics and religion, next on INSIDE POLITICS, a Boston minister with an inspiring story. And a political message for lawmakers.

(COMMERCIAL BREAK) WOODRUFF: At first glance, today's political debates are easy to classify according to a standard formula, a stereotype that pits religious conservatives against more secular political liberals. The usual formula, however, is not always accurate.

CNN Boston bureau chief Bill Delaney introduces us to a young minister determined to make a difference and whose views defy conventional wisdom.

(BEGIN VIDEOTAPE)

BILL DELANEY, CNN CORRESPONDENT (voice-over): For some reason, despite everything that's still not right, everything that still wounds our inner cities, some decide to just go ahead and praise God anyway.

And like the Reverend Alex Hurt, compose a new vision of change and political clout.

REV. ALEX HURT, HURT INNER CITY MINISTRIES: There is a spiritual revival that is at foot, that is transforming the way that people think about religion, and indirectly, transforming the way that people think about social and political issues. And that tidal wave is just below the radar.

DELANEY: Just 30 years old, associate pastor of Boston's State Temple, Church of God in Christ, Hurt started out with a good shot at a bad end.

HURT: Violence, to me, was a way of life. It was the way people got things. Because of that, my world was just saturated with violence.

DELANEY: The world of the projects, Chicago's Henry Horner Homes.

HURT: Henry Horner was a throwaway place. I had to fight the demons that I picked up there. I had to fight the sense that I was a throwaway way person. And it was a stamp of helplessness that I carried with me for a very, very long time.

DELANEY: Orphaned by age 8. Homeless, sleeping in an abandoned slaughterhouse by age 16. Alex Hurt ended up here, Harvard University.

QUESTION: Why did Alex Hurt somehow make it out, and some don't make it out?

HURT: The thing that saved me, more than anything else, was my ego. And my ego is my friend. Irrespective of where I was from, I was not going to be like the mainstream because God didn't make me that way.

DELANEY: Hurt arrived broke in Boston in 1989. At age 18, he slept in the Boston Common. And for years, on and off, at a shelter. Studying into the night at the Boston Public Library, surviving on odd jobs, until he graduated from college. And then, his Holy Grail -- Harvard, the university's divinity school.

HURT: I was a kid in a candy store, taking 5 classes for credit, and probably auditing three others, and I was everywhere. It forced me to read everything in liberal theology, and read everything in conservative theology to really know what I believed, and to know what they believed.

The complex roots of Hurt's particular political vision of a new breed of passionate Christians, the sort usually associated with deep conservatism who are, in fact, like him. Well, liberal.

HURT: They are theological conservatives and political progressives. That has the theology of the sort of right-wing religious crowd, but has the politics of the secular moderate crowd.

DELANEY: Hurt says there are tens of millions, black and white, with six million in his relatively small denomination alone.

HURT: In the congregational church, in the episcopal church, all across the country, there are the Lutheran charismatics. Neither political party has made room for what I think is the sort of the hiccup, from the baby boom generation, people who are returning to religion in droves. The party that pays attention to this group will be the dominant party for the next generation.

DELANEY: But what he calls Pentecostal progressives, Reverend Hurt says, are up for grabs. Voters devoted to the Bible who don't take it literally, men and women who oppose abortion but also strongly support government programs for children.

HURT: Will the Democrats begin to understand religion? Will the Republicans begin to understand the social agenda of this group?

DELANEY: Right now, hurt's most immediate project's being built in Boston's inner city -- a shopping mall wholly funded with money from black churches. Just under the radar.

HURT: To borrow a line from a rap song, "the movement will not be televised." The real movement that's happening in the black community, and I think that is in the country. It's happening in the hearts of people, in communities all around this country.

DELANEY: And in the heart of an interesting young man walking that old fine line: Faith with your feet on the ground.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE)

WOODRUFF: Who may be trying to make money on the Clinton pardon flap? When we return, is Denise Rich selling her story for a song?

(COMMERCIAL BREAK)

WOODRUFF: Finally, Denise Rich's representatives say that she will not tell all, but the songwriter and leading figure in the Clinton pardon controversy has signed a contract to write a quote, "candid book" about her life and a song as well.

Capital Books would not reveal of what the firm is paying the ex- wife of financier Marc Rich, who was pardoned on the final day of Clinton's presidency. The book and the CD will share the same title, "Pardon Me."

And that's all for this edition of INSIDE POLITICS, but, of course, you can go online all the time at CNN's allpolitics.com, AOL key word CNN.

Our e-mail address is insidepolitics@cnn.com.

This programming note: At 7:30 Eastern, the surgeon general's new recommendations on sex education in the CROSSFIRE. Former Surgeon General Joycelyn Elders.

I'm Judy Woodruff. Something new coming up next. The very first edition of "FIRST EVENING NEWS." Here's Bill Hemmer.

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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