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CNN INSIDE POLITICS

Jesse Helms Expected to Announce Retirement; Gary Condit Working on His Media Strategy

Aired August 21, 2001 - 17:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: This is INSIDE POLITICS. I'm Judy Woodruff in Washington. A veteran of the Senate and some of its most partisan clashes apparently is on the verge of calling it quits.

JONATHAN KARL, CNN CORRESPONDENT: I'm Jonathan Karl in Raleigh, North Carolina. I'll tell you what I've learned about what Jesse Helms will announce tomorrow night.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm Bill Schneider in Washington, where the budget debate is highlighting a political flip-flop.

BOB FRANKEN, CNN CORRESPONDENT: I'm Bob Franken in Modesto, California, where Gary Condit and his advisers continue to work in secret on his media strategy.

ANNOUNCER: Now, Judy Woodruff takes you INSIDE POLITICS.

WOODRUFF: Thank you for joining us.

In political circles, people have been speculating for some time that Senator Jesse Helms would retire. But now the conservative icon appears ready to reveal his decision. In the process, Helms seems poised to close a political era in the state of North Carolina and to spur an important new Senate battle. Our Jonathan Karl is in Raleigh, North Carolina.

Jonathan, bring us up to date.

KARL: Well, Judy, here's what we know. Jesse Helms will go tomorrow to WRAL in Raleigh, North Carolina. He will announce his plans for next year, whether or not he will run for reelection. What we are told by GOP operatives both in Washington and here in North Carolina is that Senator Helms will announce that he will not seek a sixth term in the United States Senate. Remember, he was first elected way back in 1972.

We are also told from his office, however, that they have no official statement on this. They confirm that he is going to make this announcement, but they say that Senator Helms is working himself on his announcement, actually typing away on his manual Royal typewriter working on the announcement as we speak. They will neither confirm or deny that that announcement will be that he will not run for reelection. But as I told you, we've heard from people both in Washington and here in North Carolina. They believe the end of the Helms era is at hand here.

WOODRUFF: Jonathan, Senator Helms has been such a dominant political force in the state of North Carolina and in the U.S. Senate. Where does it leave both places?

KARL: Well, you know, in terms of North Carolina, Jesse Helms is credited by many as being the person more than anybody else who built the North Carolina Republican Party. To give you an idea, Judy, it was just a couple of years ago that the Republican Party here in North Carolina gave him their Republican of the Century Award. He is the first Republican to win statewide office in North Carolina this century, and he is somebody who has really built the party, been the dominant figure in the party. As a matter of fact, one observer down here told me a couple of years ago about the Helms role here. He said that if Rip Van Winkle had come to North Carolina back in the '70s and then fallen asleep for 20 years, when he reawoke, the same two political figures would be the dominant political figures in this state: on the Republican side, Jesse Helms; on the Democratic side, Jim Hunt, who has also left the political stage here in North Carolina.

And nationally, as you well know, Jesse Helms has been both a conservative hero and enemy number one to liberals here -- you know, nationally. So he's clearly a figure that goes beyond just North Carolina even as he is the dominant Republican figure in the state.

WOODRUFF: Jonathan, assuming the senator is stepping back, we know there are a number of people who'd be interested in running for that seat. And I guess the name of Elizabeth Dole is leading all speculation.

KARL: Well, absolutely, Elizabeth Dole herself has fueled that speculation. She a couple of weeks ago put out a statement saying that if Senator Helms were to decide not to run again, and only if, she would seriously consider a run for that Senate seat. So clearly, Republican operatives, both in Washington in North Carolina, believe there is a good chance that Elizabeth Dole will decide to run for that seat. They believe that if she does, she will immediately emerge as the front runner. As a matter of fact, two weeks ago, there was a poll down here that showed her swamping her potential Republican rivals in a primary and also swamping potential Democratic rivals. So they are actively encouraging her to run here.

But there is a potentially crowded field down here. You have three other candidates here toying with a run down here, including Congressman Richard Burr of North Carolina; also Lauch Faircloth, who was a senator. He was defeated you remember in '98 by John Edwards. Former senator Faircloth weighing a run. And also, Richard Vinroot, who has twice run for governor and twice lost. So what national Republican operatives have told me is that one of the things that they want to do when Helms makes this announcement is to make sure they don't have what they call a banana republic down here in North Carolina with four different candidates slugging out in a primary. If Elizabeth Dole runs, national Republican operatives clearly would like to see this field clear, clear the way for Elizabeth Dole. But many of those down here are saying that they're going to run regardless of what Elizabeth Dole has said. Lauch Faircloth has hinted that, and so has Richard Vinroot.

WOODRUFF: All right, Jonathan Karl.

And Jonathan will be back with a profile of Jesse Helms a little later on INSIDE POLITICS.

And for more of a North Carolina take on Helms' plans, we are joined by Jim Morrill. He is political reporter for the "Charlotte Observer;" and GOP media strategist, Marc Rotterman, who is with us from Raleigh.

Marc Rotterman, to you first. What information do you have about Senator Helms' plans?

MARC ROTTERMAN, GOP MEDIA STRATEGIST: I think it's a foregone conclusion that he's going to announce that he's not going to run for his sixth term. I would find it completely impossible that he would announce that he is running again. He's made no effort at all, Judy, to contact any of his money people, any of the operatives around the state. So I think it's highly unlikely that he will run.

WOODRUFF: And Jim Morrill?

JIM MORRILL, "CHARLOTTE OBSERVER": I agree with that. I think that all the speculation is that he won't run, and there's a lot of reasons for that: his age, his health. And a lot of his friends talk about the fact that his wife doesn't want him to run anymore. I talked to her today, asked her if she would be -- how she felt about his decision. She said she was happy about it, very happy.

WOODRUFF: Marc Rotterman, where does this leave the Republican Party in the state of North Carolina?

ROTTERMAN: Well, the Republican Party in North Carolina is looking for a winner. You have two really good candidates who are coming to the front line now: Congressman Richard Burr, who represents generational change, and of course, Elizabeth Dole, who brings star power and a record of service to the country that's unparalleled in North Carolina. Her numbers in North Carolina are virtually like Mother Teresa's. I mean, she's very popular.

WOODRUFF: Jim Morrill, Mother Teresa aside, assuming Jesse Helms is stepping down, where does this leave North Carolina politics?

MORRILL: Well, I think it leaves in the most interesting situation it's been in in a while. This particular Senate seat, as you know, hasn't been opened for 30 years. The last time we had a race was a couple of years ago where an incumbent got unseated. It's wide open. It's -- like Marc said, it's a generational change opportunity for the Republican Party. And by the way, I don't think that other Republicans would necessarily lay down for the two candidates that Mark mentioned. And it, you know, gives the Democrats a good chance, the best chance they've had in years to take this particular seat.

WOODRUFF: Well, who are some of the Democrat names?

MORRILL: Well, actually the irony is that a lot more Democrats have been falling out of this race than have been getting in. The only Democrats -- Democrat in so far is Secretary of State Elaine Marshall. There's a state representative named Dan Blue, who's probably going to get in. And there's another Charlotte investor named Mark Erwin, a former ambassador who's still toying with the race. But the big news on the Democratic side are the people who've gotten out of the race so far. Erskine Bowles, the former White House chief of staff, got out a couple of months ago. State Senate president got out and other big Democrats have also taken themselves out of the running.

WOODRUFF: Marc Rotterman, comparing Elizabeth Dole to Mother Teresa, are you saying she's practically a shoo-in?

ROTTERMAN: No, I'm not saying she's practically a shoo-in, but her record service in the Bush and the Reagan administration, as well as the Red Cross. She's highly thought of. She's been in the state a lot campaigning for both Faircloth and Vinroot, by the way. The last poll I saw she had about a 75 percent favorable rating with the folks in North Carolina, Judy.

WOODRUFF: Does she have any liabilities?

ROTTERMAN: Well -- go ahead, Jim.

MORRILL: I was just going to say the fact that she hasn't really been in the state, she hasn't lived in the state for about 40 years, so a lot of people are just going to challenge her on that, I believe.

ROTTERMAN: I don't think that's the case. Her mother still lives in Salisbury. She's been here a lot. Frankly, she's campaigned for every statewide candidate and a lot of congressional candidates throughout the last 25-30 years. Let's face it. She's been serving her country. So I think it's a woman who's made good, who's left North Carolina to come back and serve her country once again if she decides to run.

WOODRUFF: You're both talking people and not issues. Are you saying, Jim Morrill, that it's going to be the personality, the person who runs and not so much what the issues are that matter here?

MORRILL: Well, I think personalities always play a role. I think North Carolinians like everybody has to be comfortable with the candidate they elect. That's one reason that Senator Helms has been able to get reelected five times. The people who voted for him were comfortable with him. As you know, a lot of Democrats, especially in eastern North Carolina, voted for him, because even if they didn't agree with him on all the issues, they felt like they could trust him, and they knew who he was.

ROTTERMAN: I agree with that. Senator Helms I think singly, other than Ronald Reagan, is the most important conservative of the last half of the 20th century. He's well respected, and the Democrats routinely put him back when the national media always counted him out.

WOODRUFF: All right, Marc Rotterman and Jim Morrill, thank you, both. We appreciate it.

MORRILL: Thanks.

ROTTERMAN: Thank you.

WOODRUFF: And now on to the economy and political clashes over the federal budget. As widely expected, Alan Greenspan's Federal Reserve cut short-term interest rates another quarter point today, the seventh rate reduction this year aimed at boosting the economy. On Wall Street, the Dow closed down 145 points. Many traders apparently were frustrated that the Fed's economic outlook was not rosier.

Meantime, in Missouri today, President Bush defended his budget plan saying that it would improve the flagging economy and produce the second largest surplus in history. Mr. Bush tried to shift the heat to congressional Democrats, who say that his tax cut has shrunk the surplus more than the White House acknowledges.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This will be an interesting test of the priorities of the leaders of Congress. It will be an interesting test to see whether or not they agree with the administration that our true priorities begin with educating our children, and a true priority is the defense of our nation. I'm confident we can work together, but it's going to require the people to help us watch the process. The people need to pay attention, and if you see the appropriations process dragging on, it looks like the old games of the past. We all need to blow the whistle.

(END VIDEO CLIP)

WOODRUFF: Mr. Bush spoke in the hometown of Democratic president Harry Truman, a fact that the Democratic National Committee is playing up in a new ad.

(BEGIN POLITICAL ADVERTISEMENT)

ANNOUNCER: Because the Bush budget violates one of Harry Truman's basic principles: protecting our seniors. The Bush budget raids the Medicare trust fund. Now he's using gimmicks to hide a raid on Social Security. Harry Truman believed in plain speaking. Now do some plain speaking...

(END OF POLITICAL ADVERTISEMENT)

WOODRUFF: That ad is running in a limited number of places this evening through tomorrow morning, including Independence, Missouri, Washington, D.C., and Waco, Texas near Mr. Bush's ranch.

Among those covering Mr. Bush's trip to Missouri today, CNN political analyst Ron Brownstein of the "Los Angeles Times." And he's joining us from Kansas City. Ron, what was the president trying to accomplish with today's remarks in Independence?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, Judy, in Washington this fall, the main event is going to be the battle of the budget, or you could put it: Who lost the surplus? And what President Bush today was trying to do in a very energetic speech was begin to frame that debate in advance of the release tomorrow of the updated figures on what we can expect in the federal budget surplus. And they're expected to show that the surplus is going to be a lot smaller than we thought earlier this year, and that almost all of it, virtually all of it will is going to be attributable to the surplus in the Social Security account that both sides have said should be off limits.

The president today was arguing that his tax cut and his economic plan is part of the solution, not the problem. And Democrats, of course, in the ad that you mentioned and in general sort of a rising chorus of criticism are arguing that in effect, what Al Gore said last year was right, that the tax cut has evaporated the surpluses that were projected out for quite some time to come before Bush took office.

WOODRUFF: Does either argument have an obvious advantage, Ron, or are they just going to slug it out this way?

BROWNSTEIN: You know, I think they're both ham strung in some ways in the short term. The Democrats want to criticize the Bush tax cut and argue that that is really to blame for the evaporation of the on budget side of the surplus. But they've been very leery and divided on whether they want to talk about either repealing or delaying or deferring future elements of the tax cuts. Very mixed signals even as late as today. On the other hand, Bush wants to focus on spending and present himself basically argue that more spending is the real risk to putting us back into deficit. But he's got a lot more spending that he wants to propose as well, particularly on defense, and to some extent on education. So I think both side at this point are quite content criticizing the other. They're a little less clear about what they want to actually do about the situation on the ground that they're facing, which is an on budget surplus that could be minimal. An some people next week when the congressional budget office comes out, they may even conclude that we are back into reaching into the Social Security press fund, which is something that both parties have pledged not do.

WOODRUFF: Well, speaking of the spending that President Bush wants, particularly with regard to defense and education, how secure is all of that, given the condition of the economy?

BROWNSTEIN: Well, you know, I think it's very dicey. Not only that, but Democratic priorities like the prescription drug plan are going to be very dicey. The chairman of the Senate Budget Committee, Ken Conrad, has already said that Bush cannot have the defense spending increase he wants without finding offsets elsewhere in the budget. And I think it's going to be hard to find the money for these education and prescription drug plans the Democrats want. Where it really kicks in in terms of the economy is that, you know, I think when we see these numbers tomorrow, we're going to see that they -- OMB estimates that we will have only small on budget surpluses for several years, and that is even with assuming a real rebound in economic growth. If the economy doesn't grow as fast as they suspect or hope or project, then you could be looking at even tighter fiscal conditions. And again, the possibility of an on budget deficit going back into 2004. And that is something that I think no one wants to run on, least of all President Bush having faced those charges in 2000. And his economic plan would produce exactly that.

WOODRUFF: Just quickly, Ron, on Social Security. The Democrats are saying the president is about to raid Social Security. He's going to be forced to do that. He's saying today that he's committed not to touch Social Security. Where does that end up?

BROWNSTEIN: Well, I think it ends up that both sides are going to do whatever they can to avoid touching Social Security. That was an important thing the president said today. His OMB director, Mitch Daniels, said earlier, but the president today committed not to go back to raiding or tapping the Social Security trust fund, which has become the accepted bipartisan definition of what a budget deficit is. And that means that both sides are going to have to come up with plans not only for this year's budget but beyond to avoid doing that. And that's probably going to mean that each side is going to have to roll back some of the things it really wants to do, both on the spending and maybe even on the tax side.

WOODRUFF: All right, Ron Brownstein, we'll see you again soon.

And we will discuss budget politics and Jesse Helms' expected retirement with the Democratic and Republican Party chairmen next. Stay with us. This is INSIDE POLITICS.

ANNOUNCER: Are you feeling dizzy from all the budget spin? Our Bill Schneider will explain where the parties are coming from. Also ahead, Congressman Gary Condit's decision to send a letter to constituents. Who will pay for the postage? Plus, Al Gore in California. Is it part of his political comeback? And a look back at Senator Jesse Helms' career and his affinity for controversy.

(BEGIN VIDEO CLIP)

SEN. JESSE HELMS (R), NORTH CAROLINA: If artists want to go in a men's room and write dirty words on the wall, don't ask the taxpayers to support it.

(END VIDEO CLIP)

ANNOUNCER: Live from Washington, Judy Woodruff brings you more of INSIDE POLITICS straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: With that new poll showing signs of increasing pessimism about the economy, we saw once again today a president, this time a Republican, invoking the memory of plain-speaking Democrat Harry Truman. Our senior political analyst Bill Schneider watched today's events with an eye on history.

And Bill, you noticed a gradual shift in economic priorities by both political parties.

SCHNEIDER: Yes, I did. And you know in Harry Truman's day, Democrats were protectors of the economy and Republicans were protectors of the budget. Now, Democrats are wringing their hands over the shrinking budget surplus, and Republicans are defending their tax cut as a way that stimulates the economy. Welcome to the great reversal.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): President Clinton committed Democrats to fiscal responsibility: "This, above all: reduce the deficit." Al Gore added a new imperative: "and guard the lockbox." Now, with the economy weak and the budget surplus diminishing, Democrats can claim their issue.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Because the tax cut was so large, we virtually have no room to do all of the other things that we need to do to run the government. We are going to be dipping into Medicare, and most likely Social Security trust funds for the first time in years. That, to me, is wrong.

SCHNEIDER: Republicans claim the real issue isn't the budget, it's the economy.

MITCH DANIELS, WHITE HOUSE BUDGET DIRECTOR: The budget of the government is in great shape. It's the economy that's not.

SCHNEIDER: Do they have a policy to stimulate the economy? Yes.

LAWRENCE LINDSEY, WHITE HOUSE ECONOMIC ADVISER: Fortunately, that tax cut is putting a floor under the economy so that we don't get into any real economic trouble.

SCHNEIDER: Democrats complain the tax cut threatens the budget, but they can't deny cutting taxes helps the economy.

REP. DICK GEPHARDT (D-MO), MINORITY LEADER: I'm glad we have this tax cut going out because it might help us get out of the slowdown that we're in.

SCHNEIDER: So there may be only one option left for Democrats.

GEPHARDT: Well, you can make cuts in defense, you can make cuts in domestic programs.

TIM RUSSERT, "MEET THE PRESS": Which ones?

GEPHARDT: You can go down the whole list: education, health care.

RUSSERT: Across the board?

GEPHARDT: You can go across the board.

SCHNEIDER: That doesn't sound like the party of Harry Truman. In Truman's day, Democrats were the party of more. Now with the budget as their cause, Democrats sound like the party of less.

(END VIDEOTAPE)

SCHNEIDER: In a weak economy, it is not good politics for Democrats to call for austerity. And if the economy does turn around, their budget issue will disappear. It's not the budget, stupid. It's the economy. Nothing personal.

WOODRUFF: All right, Bill Schneider, thanks.

Well, who better to ask about party priorities on the budget and other issues than the two party chairmen? Joining us now, or in a moment we hope from Aspen, Colorado the Democratic chairman of -- the chairman of the Democratic Party, Terry McAuliffe. But until we get to him or before we get to him, we turn here in Washington to Virginia governor Jim Gilmore, who's chairman of the Republican National Committee.

Governor Gilmore, right now, what needs to be done both to get this economy in better shape and to shore up the federal budget?

GOV. JIM GILMORE (R-VA), REPUBLICAN NATIONAL COMMITTEE: Well, Judy, there's nothing better at this point than to make sure that these tax cuts go at the working men and women across this country. This has been the president's policy, it's a promise made, it's a promise kept. He said he was going to do it. He is doing it. And working men and women across this country are getting those checks for $300 and often $600. It helps a great deal, and it's putting more money back into the economy. And that is what we really need to do, Judy. And that's going to help the economy I think a great deal.

But in the meanwhile, I can tell you this: You want some straight talk from Missouri and straight talk from Harry Truman, I'll give you some straight talk. And that is these Democrat ads that have been purchased and put on television that say the Republicans are going to invade the Social Security fund are absolutely false. They're deliberately false, and they shouldn't be telling the people of the United States things like that. They did invade the Social Security fund when Bill Clinton was president. But this president, George Bush, has made it very clear we are not invading the Social Security fund. He's holding that intact.

WOODRUFF: But governor, the question is still out there. Given shrinking revenues because of this economy, given the president's very clear priorities he wants to increase military spending by nearly $40 billion, he clearly wants to put money in education, people are asking: How can you do all of these things? Can you have your cake and eat it too? Hold down spending, but spend money on those things that matter to you? GILMORE: Judy, this is a very large federal budget. You set your priorities. This president has made it very clear his priority is education. He plans to increase the education budget around 11.5 percent. He believes very much in the men and women in uniform. He intends on increasing the defense budget by about six percent. This has all been widely discussed. But the main point is this. We need to be asking Terry McAuliffe and the Democrats: What do they really want to do? Do they want to raise taxes on the people of the United States during a time when the economy is fragile and people out there are having a hard time making ends meet and worried about their jobs and so on? Is that what the Democrats want to do? They want to raise taxes in this country? I don't know think that's good policy.

WOODRUFF: Are you saying that's what Democrats are calling for? Which Democrats are saying that?

GILMORE: I believe -- in fact, you just saw Daschle and Gephardt saying on your show that they believe that in fact that the surpluses were going down because of tax cuts. They were saying that there was going to be a risk that they were going to go -- we were going to go into the Social Security fund.

By the way, when Bill Clinton went into the Social Security fund to the amount of $893 billion between '94 and '98, they're on record as saying that was A-OK. The change right now is the president. He's the one who's made it clear that we're not invading Social Security or Medicare, and he's going to be able to put together a budget that does the priorities for working people across this country and delivers on his promise on the tax cuts.

WOODRUFF: Governor Gilmore, before we run out of time, a question closer to home from you. You are right now both from Democrats and Republicans in your state of Virginia being accused of not telling the whole story about how much a shortfall the state of Virginia faces. You had projected it at something like $50 million rather than the 500 million, which some of your critics in the state legislature are saying it will be. What do you say to them?

GILMORE: Well, that's not accurate. That was misquoted completely in the newspapers this morning. We closed the books on last year's budget and we were able, as a matter of fact, to financially manage our way through by setting priorities so that we were able to close any type of shortfall and we reported it completely accurately. Now, of course, elements in the state Senate just like in Washington are anxious to go forward and spend and spend and spend. What they're really saying in today's paper is: "We want to spend more next year. We know what you did last year, but now we want to spend more next year." I think this is a really good point. And that is that in Washington, D.C., the challenge that the president faces is holding down spending, making sure the budget priorities are right, that we put our emphasis on tax cuts and education and working men and women of this country. We're doing it in Virginia and the president is doing it successfully at the national level, Judy.

WOODRUFF: All right, governor, just quickly. We're almost out of time. Jesse Helms, assuming he does announce his retirement tomorrow, is Elizabeth Dole the candidate?

GILMORE: Well, you know, Judy, we have to leave that naturally to Senator Helms to make his announcement, to make his decision. But I would say this, that Elizabeth Dole would be a just cracker jack candidate for the state of North Carolina, just terrific. We're very deep there in candidates, but Elizabeth Dole would probably be a leading figure there. She's very well known and very well liked in North Carolina.

WOODRUFF: All right, Governor Jim Gilmore, the chairman of the Republican National Committee, thanks for joining us. Great to see you again.

GILMORE: Thank you.

WOODRUFF: And our apologies. We had hoped to have the chairman of the Democratic Party, Terry McAuliffe, joining us from Aspen, Colorado. Because of technical problems, we haven't been able to accomplish that. And we're going to keep trying and perhaps bring that to you later in the program.

The FBI says that it has cracked a scheme to defraud McDonald's. Coming up in our news update, eight people go directly to jail for what officials say was an attempt to rig the restaurant chain's Monopoly game. And later, an update on Congressman Gary Condit and his plans to break his public silence.

(COMMERCIAL BREAK)

WOODRUFF: Congressman Gary Condit is trying to rewrite his political fortunes, down to the letter. Up next, Condit's challenge as he prepares to reach out to constituents and talk to the media. And later Jonathan Karl returns with a report on Jesse Helms' political legacy on the eve of the senator's expected announcement that he's retiring.

(COMMERCIAL BREAK)

WOODRUFF: Congressman Gary Condit's long public silence looks to be near an end. CNN National Correspondent Bob Franken joins me now from Modesto, California, with the latest on Condit's plans. Bob?

FRANKEN: Well, Judy, it's extending just a little bit further. The whereabouts of the letter that Congressman Condit is going to be sending -- the mass mailing to each and every one of his constituents -- that whereabouts has the aspects of a state secret. The Condit people have decided they do not want this reported on television, the contents of that letter, until it is received by the Condit constituents, the all-important voters.

So we have not been told officially that the letter has even gone out. Although our latest information is that it has not yet. There is every expectation -- the Condit people say they want to get in the voters' hands before Thursday. Thursday, of course, is when Condit will, for the first time, speak out publicly on television in the course of an interview that he will be taping with Connie Chung for broadcast on ABC news on Thursday evening. So it is the beginning of media strategy to try and alleviate the deterioration in the political support that Condit has already over the years learned to take for granted.

His election has almost been an automatic matter, but the Republicans are now making great strides, saying that this is the time that they believe that they will be able to take away the Congressional seat from the Democrats, which will be something that hasn't happened for decades. But Condit is going to try to start that fight. It is 14 months until the election. He's trying to start now to try and make sure that in fact he is not overturned because of the Chandra Levy controversy. Judy?

WOODRUFF: All right. Bob Franken in California. For more on that planned mass mailing by Congressman Condit, we turn to CNN Congressional Correspondent Kate Snow.

KATE SNOW, CNN CORRESPONDENT: Judy, as Bob suggested, there are more questions than answers about the mass mailing. In fact, we've made repeated phone calls to the consultant group that is putting out this mass mailing and those calls have not been returned. So we don't know exactly who will be paying for the mass mailing, but we can tell you that direct mail is not a new thing for Representative Gary Condit.

In fact, the district that he represents in Modesto, California is a bit unique in that they don't have local television that covers Modesto itself. And so they rely on Sacramento and Fresno, major cities nearby, to cover that local area. And because they don't get a lot of local coverage on television, we understand that Gary Condit quite frequently sends out these kind of mailings, as do a lot of other members of Congress, particularly after a scandal.

(BEGIN VIDEOTAPE)

SNOW: It's been done before: mass mailings with the feel of a personal letter.

ALLEN CLOBRIDGE, SILVER BULLET STRATEGIES: The main benefit is that you get to let -- the writer of the letter gets to lay out his entire case in whatever fashion, in whatever logical order they want to approach it. If you were doing a television interview, if you were doing a press conference, you are not totally in control.

SNOW: It worked for Congressman Barney Frank in 1989 after word got out he employed a male prostitute.

(BEGIN VIDEO CLIP)

FRANK: I regret very much the inappropriate actions I've taken.

(END VIDEO CLIP)

SNOW: Frank sent a letter, using private campaign funds, to his constituents. He never referred directly to the prostitute, but wrote: "What I did was wrong. I owe my friends an apology and an explanation." He's been re-elected six more times. But Condit's case is like no other. For months he's kept silent. On Capitol Hill, aides say that even fellow Democrats wonder why he hasn't gone public sooner. Explaining it to his constituents won't be easy.

RICHARD GOODSTEIN, POLITICAL CONSULTANT: With three months having gone by since this whole matter arose, there is such a level of suspicion about him in connection with Chandra Levy and beyond, that there is a very strong bias against believing whatever he has to say.

SNOW: Consultants who do this for a living say Condit's letter needs to be sober and direct with a good dose of humility.

(END VIDEOTAPE)

SNOW: The experts who do this say that it's not that hard to engineer a mass mailing like this, particularly with the help of computer technology. But Judy, what is hard is writing the actual letter. And as to what this letter is going to say, we don't know. As Bob Franken reported, they're not telling us much. They say -- Condit's aides say they want people to get the letter in the mail, not hear about it in the press first -- Judy.

WOODRUFF: All right. Kate Snow at the Capitol.

What does Chandra Levy's family want to hear from Congressman Condit? Coming up tonight on "WOLF BLITZER REPORTS," Billy Martin, who is the Levys' attorney, will give us some insight. That's at 8:00 Eastern.

And joining us now the chairman of the Democratic National Committee, his name is Terry McAuliffe, he was to have joined us a few moments ago, we were having a few technical problems. We're glad to have you with us, Terry McAuliffe. And let me start out by asking you something that Jim Gilmore, who is your counterpart in the Republican Party, said, and that is that these ads that the Democratic Party is running right now, in his words are "deliberately false" when they accuse the president of raiding Medicare and about to be forced to raid Social Security?

TERRY MCAULIFFE, DNC CHAIRMAN: Judy, and I know Jim is somewhat sensitive on the topic, because he's been accused of cooking the books in Virginia. Listen, don't take the Democrats' word for it. The budget director on the Congress for the Republicans admitted last week that they have now dipped into the Medicare trust fund, and they're about to go into the Social Security trust fund.

This isn't coming from Democrats. This is coming from Republicans. And the reason we did the ad, Judy, is that George Bush campaigned all last year, saying never would he touch the Medicare trust fund or the Social Security trust fund. Well, you know what? They have already done it, they're barely in office eight months.

You know, this is going to be the "read my lips" that President Bush I had. This is the problem, he said one thing in the campaign and now reality has set in, and they've had to hit the Medicare trust fund and they're going to hit the Social Security trust fund, and it's incumbent upon us to make sure that Americans truly understand what's going on with our economy.

WOODRUFF: Let me ask you -- putting that one aside, let me ask you about something else Governor Gilmore said. And that is that what is coming out of the mouths of leading Democrats right now -- and he cited House minority leader Dick Gephardt, he cited Senate majority leader Tom Daschle -- is they, in effect, want to raise taxes, that they're saying the president's tax cut was the wrong medicine, that what we need is to increase revenues, and that means higher taxes.

MCAULIFFE: No, that doesn't. And he's putting words in the Democrats' mouth. Neither Daschle nor Gephardt has said they want to increase taxes.

Judy, you got to remember, we are the party, the Democrats, of fiscal responsibility. We had the greatest economic expansion over the last eight years in our country's history. We worked on our budgets, we've made tough spending choices to work within our budgets, and we didn't use the gimmicks that George Bush is trying to use now, little gimmicks to change the accounting rules so that it's more favorable to them.

Ours is the party that had strong economic expansion, 22 million new jobs were created under the Democratic administration, and I would also say to President Bush: He's got to quit blaming the Congress. He's got to step up to the plate and take some leadership of this economy, pull people together, come out with the new budget, because clearly what he had thought eight months isn't reality today, and let's put a budget, let's get to work. Quit hiding, quit giving speeches.

WOODRUFF: But why shouldn't the president very prudently be asking Congress to hold down additional spending right now if the economy is weak?

MCAULIFFE: He's right to say that. But the reason we're in this position today is because of fiscally irresponsible tax cut, which has taken away, Judy, all of our surplus. When George Bush comes home from his month in Crawford, Texas -- and I hope he's relaxing down there, because we have now got to figure out how we are going to pay for education, how are we going to pay for military spending, how are we going to pay for prescription drug benefit.

He says he wants to do all these things, Judy, but there's no money left. His speech today was divorced from reality. It's like he doesn't even know what's going on with our economy today. There's no money for prescription drug benefit. Let's all get back at the table, relook at our budget, and put together that gets our country moving again, which we had under Democratic leadership. There is no plan, no leadership from George Bush.

WOODRUFF: Well, let me finally ask you about what's happening in the state of North Carolina. I am sure you are aware the reports are that Senator Jesse Helms will tomorrow announce his retirement. The Republicans are saying they have got by far the strongest candidates, Elizabeth Dole among them. What will the Democrats do? Are you in an automatic disadvantage in North Carolina? MCAULIFFE: Well, we have very interested candidates on the Democratic side who are great candidates. Let me say this, Libby Dole has not lived in North Carolina for over the 30 years. I hope she hasn't been voting down there, because you wonder if that's even legal. But she has not lived there for 30 years, and you know, they talked great things about Libby Dole when she ran for president. That campaign went up in flames in a matter of months.

So, we are not worried about Libby Dole because of the strong leadership in the Democratic Party. We have a lot of great candidates. We're going to win that Senate seat, we're going to win in New Hampshire, in Oregon, in Colorado, in Arkansas, eight out of eight in mayor's races this year. We're doing great.

WOODRUFF: You are not saying that living in a state is a requirement, are you, Terry McAuliffe? I mean, first lady Hillary Rodham Clinton ran and won in the state of New York when she hadn't lived in a state.

MCAULIFFE: No, but she's saying that she's from North Carolina, she spent a lot of time there. She has not -- and as you know, first lady Hillary Rodham Clinton moved to New York, set up her residency there -- but she has not been in the state for over 30 years.

So, it is going to be an exciting race and we are ready for the fight, and it's going to be I think a referendum on the Bush economic policies. This reminds you of the first President Bush. They had no interests in the domestic economy, they used little gimmicks, they used false economic forecasters for the future. They're predicting an unreasonable economic growth next year. It's not true. Let's deal with specifics, let's help working families get jobs, let's get back to work on the economy.

WOODRUFF: All right. All right. Terry McAuliffe.

MCAULIFFE: Thanks, Judy.

WOODRUFF: In Aspen, Colorado. We're glad to see you and we're glad it all worked today technically.

MCAULIFFE: Great. Good satellite work.

WOODRUFF: Thanks very much.

MCAULIFFE: Thank you, Judy.

WOODRUFF: Well, meantime, over in the Senate, the final chapter apparently is about to be written on a long and often controversial career. Coming up next, a profile of Jesse Helms -- his conservative politics, his partisan adversaries and the strange bedfellows he has made.

(COMMERCIAL BREAK)

WOODRUFF: We've been reporting that veteran North Carolina Republican Senator Jesse Helms is expected to announce his retirement tomorrow. Given that, our Jonathan Karl has been looking back at Helms' political relationship and his legacy. Jonathan joins us again now from Raleigh, North Carolina -- Jonathan.

KARL: Well, Judy, Republicans here are bracing for an end to the Helms' era, an era over three decades in which Helms became not only the dominant Republican in the state of North Carolina, but also one of the most influential and controversial political figures of the second half of the 20th century.

(BEGIN VIDEOTAPE)

KARL (voice-over): Jesse Helms, patron saint to conservatives, prince of darkness to liberals. During his three-decade Senate career, Helms carried the flag for the right on some of the noisiest ideological conflicts of his time: abortion, school prayer, flag burning, affirmative action and gay rights.

Helms' trademark feistiness came through in the late 1980s, when the National Endowment for the Arts faced his wrath for funding controversial artists, like Robert Mapplethorpe.

HELMS: Now, if artist want to go into the men's room and write dirty words on the wall, let them furnish their own crayons. Let them furnish their own wall, but don't ask the taxpayers to support it.

KARL: A perennial top target of the Democratic Party, Helms won five bruising Senate campaigns, never softening his rhetoric, even as his state's political center of gravity drifted to the left.

In his 1984 race against then Governor Jim Hunt, Helms spent $14 million, making it at the time the most expensive Senate campaign ever. In his next campaign, Helms was accused of inflaming racial tensions with an ad attacking Democrat Harvey Gantt over affirmative action.

(BEGIN VIDEO CLIP, HELMS CAMPAIGN AD)

You needed that job, and you were the best qualified. But they had to give it to a minority.

(END VIDEO CLIP)

KARL: It was when Ronald Reagan's sputtering presidential campaign came to North Carolina in 1976 that Helms first established himself as a conservative hero. By helping the a struggling Reagan win his first ever presidential primary, many conservatives believe Helms set off a chain reaction that paved the way for a White House win four years later.

What most attracted Helms to Reagan was his tough talk against communism. Always the cold warrior, Helms even took aim at Reagan's State Department after the downing a Korean Airlines plane in 1983 by the Soviet Union. It was vintage Helms.

HELMS: Well, I hope that this will convince our State Department to stop being so namby-pamby about the Soviet Union. KARL: Helms kept up his anti-communist crusade long after the fall of the Soviet Union, working to tighten the trade embargo against Cuba.

HELMS: I want you fellows to -- and ladies, to deliver a message to Cuba for me. Farewell, Fidel!

KARL: It was as chairman if the Foreign Relations Committee that Helms made his mark, often in surprising ways. An ardent critic of the United Nations, Helms nevertheless became the first U.S. senator to address the U.N. Security Council.

HELMS: It may very well be that some of the things that I feel obliged to say will not meet with your immediate approval, if ever.

KARL: He drafted a bill paying U.S. dues owed to the U.N., in exchange for reforms. The deal broke a longstanding political stalemate, earning Helms the praise of liberal democrat Joe Biden.

SEN. JOSEPH BIDEN (D), DELAWARE: Just as only Nixon could go to China, only Helms could fix the U.N. And that's true. That is absolutely, positively true.

KARL: Helms, who turns 80 in October, has a nerve condition in his feet that requires him to use a motorized scooter to get around. Earlier this year he addressed the question of when he'd retire by quoting an ailing Winston Churchill's answer to the same question.

HELMS: Young fellow, not until I am a great deal worse, or the country is a great deal better.

(END VIDEOTAPE)

KARL: Now, Helms' office will not confirm or deny those reports that Helms will announce, as G.O.P. officials expect, that he will retire or not run for reelection tomorrow night at WRAL, that station where he served as a political commentator back before he was a senator.

But one thing that Helms' aides will say is that if he does announce that he's not going to run, he will not endorse any of the Republicans that are expected to come in after the nomination. He has ties to all of them, including, by the way, Elizabeth Dole, who Helms likes to tell people that he introduced to a senator named Bob Dole some years ago -- Judy?

WOODRUFF: All right, Jonathan Karl. There's only one Jesse Helms. INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: A name we haven't heard from lately -- Al Gore plans several stops in California this week. I'm joined now by Carla Marinucci. She's a political writer for "The San Francisco Chronicle."

Carla, what is the former vice president doing now?

CARLA MARINUCCI, "SAN FRANCISCO CHRONICLE": Well, Judy, you know, Al Gore made 74 trips to California as vice president. He's back out here again. This is his third trip to California since the election. He's going to be meeting with supporters in small groups and large. Dinner with Walter Shorenstein, major Democratic donor. He's got another event with high-tech folks, the kind of folks who gave him big money in the last election. And he's also talking to labor folks about the hundreds of supporters informal, going to meet with. So there is some excitement. This is a guy who came in on Air Force II a lot. He's now driving his own car, we understand.

WOODRUFF: So does this mean everyone thinks he's running for something again?

MARINUCCI: Well, his political people, his spokeswoman, Kiki McLean specifies that this is not a political trip, he's here to see friends. But clearly, Californians want to hear from Al Gore. He did win the state by 1.3 million votes, 12 points over George Bush. So a lot of Democrats say that even though the election was lost, they want to hear from him again. And of course, he's one of a parade of Democratic hopefuls who have been to California, specifically Silicon Valley, to look ahead to 2004.

WOODRUFF: All right, Carla Marinucci. Unfortunately, we're out of time. We appreciate you joining us and we hope to see you again soon.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: That is all for this edition of INSIDE POLITICS. I'm Judy Woodruff.

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