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George W. Bush Meets With Mexico's President; Bush Administration Updates Number of Embryonic Stem Cells Available for Federal Research

Aired September 5, 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. The Bush administration acknowledges some different numbers in its stem cell research compromise. I'll ask HHS Secretary Tommy Thompson about that.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: I'm John King at the White House. Mr. Bush and Mexico's president are emphasizing cooperation, but also feeling at least a little disappointment.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill, where Senator Hillary Clinton aimed a laser beam at the president's budget plan.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow also on Capitol Hill. House members back at work today and still buzzing about Gary Condit.

ANNOUNCER: Now, Judy Woodruff takes you INSIDE POLITICS.

WOODRUFF: Thank you for joining us. It is the first state visit of George W. Bush's presidency, a distinction which can heighten expectations. But even as Mr. Bush welcomed Mexico's president, Vicente Fox, today, both men apparently were mindful that their meeting would not be as fruitful as some had hoped.

Our senior White House correspondent John King is covering the summit -- John.

KING: Well, Judy, as these discussions continue, a state dinner here at the White House tonight. Both presidents trumpeting this as evidence of a new chapter in U.S.-Mexico relations. Both saying that after years of mistrust, the two presidents and the two nations now able to have candid and productive conversations about very difficult issues, issues like illegal immigration, drug narcotic trafficking, trade as well. But, as much as their new friendship was in evidence today, it was also abundantly clear that getting along doesn't always translate into getting things done.

(BEGIN VIDEOTAPE)

KING (voice-over): The symbolism was obvious, a new spirit of cooperation -- the day's overriding theme. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: A Mexican proverb tells us (speaking in Spanish): He who has a good neighbor has a good friend. Today, both our countries are committed to being good neighbors and good friends. Friends deal in good faith and disagree with respect. Friends stick together in good times and in bad.

KING: So the first state visit of the Bush presidency was reserved for President Vicente Fox, and he too called cooperation on difficult issues like immigration and drug trafficking unprecedented. But for all the pageantry, there was no hiding the disappointment that the two presidents had failed to reach a major immigration agreement in time for this meeting. Mr. Fox wants rules for a new guest worker program, and for the United States to grant legal status to the three million or more undocumented Mexicans already in the United States.

VICENTE FOX, PRESIDENT OF MEXICO (through translator): Both our countries owe them a great deal. For this reason, we must and we can reach an agreement on migration before the end of this very year.

KING: But that could prove wishful thinking. Many in Congress oppose rewarding workers who entered the United States illegally. And this joint meeting of the presidents and top Cabinet officials was part of the continuing White House search for some middle ground.

RIORDAN ROETT, JOHNS HOPKINS UNIVERSITY: Whether we want a worker agreement or we want a green card agreement, we want to legalize illegal people, it has a lot of implications, both judicial as well as social. So I think that they're moving very slowly.

KING: Much is made of how much these two leaders are alike: former governors, free traders, plain-spoken types who prefer the ranch to the ornate china and other formal trappings of a state dinner.

(END VIDEOTAPE)

KING: But as they toast their friendship tonight, there are some shared traits these presidents would prefer not to have in common: both first-year presidents struggling with sluggish economies, both also struggling to keep their campaign promises but facing stiff opposition from opponents in their legislatures -- Judy.

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

Well, now to the political wrangling here in the United States over the budget. A day after Senate majority leader Tom Daschle had what he called a cordial meeting with President Bush, some Democrats here on Capitol Hill took the gloves off. Let's check in now with our congressional correspondent, Jonathan Karl.

Jonathan, some tough language coming from the Democrats. And what's the reaction?

KARL: Well, what's interesting is some of the toughest language coming from Democrats today really helping to lead the charge today was none other than Senator Hillary Rodham Clinton. You may remember, of course, that Bill Clinton came into the White House promising to focus on the economy like a laser beam. And that is a phrase that was repeated recently by the president's press secretary prompting this response from Hillary Clinton.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: The staff has said that he will focus like a laser beam on the economy, but so far, the laser beam from the other end of Pennsylvania Avenue has only succeeded in vaporizing the surplus.

(END VIDEO CLIP)

KARL: Senator Clinton said that this is the president's budget, it is his tax cut, and it is his responsibility for coming up for a new plan that will ensure that the Social Security surplus is not tapped into to pass this year's spending bills. Meanwhile, over on the Republican side of all of this, Senator Pete Domenici, the ranking Republican on Senate Budget committee, saying that the surplus is in fine shine, that the budget is in fine shape. The problem is the U.S. economy, and it's an economy in economic downturn that Domenici said this president inherited from the last president, President Clinton.

(BEGIN VIDEO CLIP)

SEN. PETE DOMENICI (R), NEW MEXICO: The truth of the matter is the United States budget's in great shape. It's the United States economy that needs a kick start. This president inherited an economy that was coming down. It was just that it was coming down from such a high level, we didn't appreciate it. But we're now in the 14th month of an economic slowdown, none of which this president had anything to do with.

(END VIDEO CLIP)

KARL: Domenici insists that there is enough money in the budget to pass the full $18 billion in added defense spending that the White House wants without tapping into the Social Security surplus. Judy, as you know, that is a proposition that is simply rejected by Democrats. They think that there's no way you can spend all you need to spend and not tap into that surplus.

WOODRUFF: But, Jon, what about among the rest of the Republicans and including Domenici when it comes to spending questions, to what extent are they are on the same page as the president?

KARL: Well, that is unclear. I mean, clearly, there is slightly of a situation where you have Republicans on Capitol Hill and the White House on a different page about the need for more economic stimulus this year. You've heard Trent Lott talk about the need for a capital gains tax cut. Well, Dennis Hastert and the majority leader on the House side, Dick Armey, both have come out and said that we need something to stimulate the economy now this fall. The White House has said, "Hey, we could probably wait for next year to do further tax cuts." So that's one area where there clearly is a difference here.

But Dick Armey told reporters earlier today -- and this is something Dennis Hastert also said -- that he believes that the president did not close the door on a capital gains tax cut this year; he simply didn't endorse the idea. But he wasn't steering Republicans away from that. And you can expect very shortly on the House side, Republican leaders to come forward with a stimulus plan. That stimulus plan will include at the heart of it a capital gains tax cut.

WOODRUFF: All right, Jon Karl, who's also here at the Capitol.

And meanwhile, also on the Hill today, Health and Human Services director Tommy Thompson acknowledged that fewer than half of the 64 embryonic stem cell lines approved for federal funding are ready completely now for research. Appearing at a Senate hearing, Thompson said that more cell lines probably will be ready by the time federal grants are issued next year. But his admission gave new ammunition to critics who say Mr. Bush's plan to fund only existing stem cell lines is inadequate.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D-MA), HEALTH COMMITTEE CHAIRMAN: The questions about the president's policy are serious questions, and they deserve serious answers because of the life and health of millions of patients and their families are at stake. It would be unacceptable to offer these patients and families the promise of effective stem cell research but deny them the reality of it.

(END VIDEO CLIP)

WOODRUFF: I discussed the stem cell research debate today with HHS secretary Tommy Thompson at his office here in Washington. It was after the hearing. And I asked him if his admission that only about 24 or 25 stem cell lines are now fully developed represents a backtracking from what the president said in his address to the nation last month.

(BEGIN VIDEOTAPE)

TOMMY THOMPSON, HHS SECRETARY: Oh, absolutely not. The president announced 60; we actually got 64 embryonic stem cell lines that are available for federal funding. But there are three stages in which an embryonic stem cell line goes through. The first one is the derivation. Then the second one is the proliferation. Then the third one is characterization. And so there's different phases. And research can be done in each one of the phases, but the completion of the third phase when you have actually the completed embryonic stem cell line, there are only approximately 24, 25 available to date. But the other 30-some lines are going to continue to grow and proliferate and differentiate to the extent that they will be available to be an embryonic stem cell line in the future. Not all will make it, but a good share of them will.

WOODRUFF: When in the future? THOMPSON: Well, six, eight months. It takes six to eight months in order to really, under optimum condition, six months, eight months to really develop an embryonic stem cell line from the point of derivation to the point when it becomes what we classify and characterize as a viable embryonic stem cell line. But during this process, you can still do the basic research, and there are 64 lines that meet the president's criteria for federal funding. And that's what NIH has said and that's what I've been saying all along.

WOODRUFF: And at the same time, Mr. Secretary, today there were senators and we've heard scientists expressing some questions about whether a number of these lines, particularly those outside of the United States, are actually going to be viable. One of the issues raised is this whole question of mixture in the research process or in the colonization process with mice stem cells.

THOMPSON: Micealaries (ph). You put the cells on what is called a mouse layer, which is a sticky substance which allows a nutrient to go into the cells to allow them to proliferate and to continue to replicate.

WOODRUFF: And these lines outside the United States, as I understood you today, it's not clear that they've all followed these very strict U.S. guidelines with regard to mixing animal and human...

THOMPSON: Judy, but all of the lines have this. So if you're going to do the research, you have to do the research on what's available. And we have 64 lines that are available for research. And the basic research has got to be done first. So many people, you know, want to jump to the conclusion, you know that we have the cure for Alzheimer's, for cancer, for Parkinson's. It just doesn't go that fast. You've got to do the basic research. And that's what these stem cell lines are available for. That's what the federal funding is going to be used for is the basic research. And there's plenty of lines available.

Let me just give you a couple of points. Number one, there's been research for 20 years on mouse embryonic stem cell lines, 20 years. And 90 percent of that has been done on five lines. Jamie Thompson, the one that has created this new, new research has got five stem cell lines that are completed throughout the stages, but he only actually uses two of those stem cell lines for his research. So there's plenty of viable lines available for the research that is necessary, and all of the lines have been layered on top of this mouse layer of cells so that they get the nutrients and are allowed to continue to replicate.

WOODRUFF: Finally, Mr. Secretary, a question about budgetary matters.

THOMPSON: Yes.

WOODRUFF: You said several days ago, the end of August, that the children's health insurance program and prescription drugs for senior citizens in some jeopardy now because the budget looking a little bit more difficult because of the economy. How concerned are you, and do you put any of the responsibility for this on the president's tax cut?

THOMPSON: No, absolutely not. The president has set forth and there's money available. Even in the president's budget or in the Senate budget, there's money available for prescription drugs. There is plenty of money to develop a real good reform Medicare package and prescription drug. There's not money available at the present time for an expanded S-chip program, something that I happen to support and believe in. But maybe we can do it next year. This is the children's health plan.

WOODRUFF: And just finally, patients' bill of rights. The president's compromise with Congressman Norwood came out of the House. There's still a lot of opposition, if you will, in the Senate. Is there anymore give on the part of the administration on patients' bill of rights and the interpretation?

THOMPSON: Why should the president keep giving? The president has given and given and given, and we're 90 percent there. Everybody agrees to 90 percent of the package. Let's pass it. Let's get a bill that the president can sign and get this issue behind us. That's what people want. Everybody's agreed to 90 percent. Let's send the president a bill now that he will not veto, that he can sign. He wants to sign it. He said that. And to me, that's smart politics. Get the issue behind us and get it set up so that people's rights are protected.

WOODRUFF: And if I may, one more, the story in the "Washington Post" yesterday, this week, saying that it's the president's White House staff that's making judgment calls, not the Cabinet secretaries. Even on something like stem cell research, the White House is out there making public statements.

THOMPSON: Well, I think...

WOODRUFF: You're doing this interview, so...

THOMPSON: I think I'm doing the interview and I think I did the testifying today on this. And you know my passion about embryonic stem cells. I've been there from day one. And you know, the reporters can say anything they want, but the truth of the matter is that I have a great working relationship with this president and I value that. And I have a great deal of opportunities to express my opinions on the direction we should be going.

WOODRUFF: All right, former governor, now secretary of Health and Human Services, Tommy Thompson. Thank you.

THOMPSON: Thank you.

WOODRUFF: And for the other side of the stem cell debate, Senator Edward Kennedy is scheduled to be a guest tomorrow on INSIDE POLITICS.

Outside of Washington, a governor is calling it quits. Stay with us for that story and more. This is INSIDE POLITICS.

ANNOUNCER: Now that the House is back in session, where's Gary Condit, and what are his colleagues saying about him? Also ahead...

(BEGIN VIDEO CLIP)

ED LAVANDERA, CNN CORRESPONDENT: Just a few months into his first mayoral term, the political machine is already hyping the future of Ed Garza.

(END VIDEO CLIP)

ANNOUNCER: CNN's Ed Lavandera reports from Texas on a rising star among Latino politicians.

And the debate over immigration reform. We'll hear from two House Republicans with different views from a top Mexican official.

Plus, find out which politician is getting ready to take a dive. Live from Washington, there's more of INSIDE POLITICS with Judy Woodruff straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: Immigration is among the key issues up for discussion during President Vicente Fox's visit to Washington. Questions about legal status and worker amnesty pose political challenges to both Republicans and Democrats, and interest groups on both sides are already weighing in.

The Democratic National Committee is running this ad on Spanish language television stations. The ad calls President Bush's immigration proposals, quote, "politically motivated." Meanwhile, 20 groups that favor reduced immigration are running a different ad, focusing on proposals for worker amnesty.

(BEGIN VIDEO CLIP)

ANNOUNCER: Past amnesties have only encouraged more illegal immigration. Worst, amnesty could undermine American wages and even endanger American jobs.

(END VIDEO CLIP)

WOODRUFF: Well, joining me now with more on the immigration debate are two members of Congress: Republican Chris Cannon of Utah, who is the vice chairman of the House Immigration Subcommittee; and Republican Tom Tancredo of the state of Colorado, who's the chairman of the House Immigration Reform Caucus.

Gentlemen, let me ask you first -- and Representative Cannon to you first. When the president in July mentioned the words legal amnesty, blanket amnesty, did you think that there was a chance ever that something like that would be granted?

REP. CHRIS CANNON (R-UT), IMMIGRATION SUBCOMMITTEE: Well, I was really pleased with the fact that he actually raised the issue and made it a public issue. I don't think that he's actually looking at what we think of generally when we talk about amnesty, which would mean people who are here achieve legal status just by getting through a window as opposed to a process that would maybe given a chance to earn an adjustment to their current status.

WOODRUFF: When he said it, Representative Tancredo, when the president said it, do you think maybe they're really seriously considering this?

REP. TOM TANCREDO (R-CO), CHAIRMAN, IMMIGRATION REFORM CAUCUS: You remember what the president said. It was: "I am opposed to blanket amnesty." That was the only statement that I actually know he's made.

WOODRUFF: I mean the initial reference earlier this summer.

TANCREDO: Well, my point is that we really don't know. We have not seen any official proposal. I'm telling you right now that as far as I'm concerned, this whole concept of the idea of amnesty -- and whether you call it amnesty, earned legalization or anything else, it's dead. It's not going to happen.

WOODRUFF: All right. If not blanket amnesty, if not complete amnesty, Congressman Cannon, what then?

CANNON: Well, I think that President Bush has shown over a long period of time that he's concerned about Hispanics. He got a huge Hispanic vote in Texas. He got a big Hispanic voter around the country. And these issues are important to him, have been important to him for a long time. And I think that the attempt to do something with Mexico to help advance the economic and the social situation there is very important. I think that's going to include something that relates to taking care of those people who are here illegally, who are carrying the economy, frankly, in many ways.

WOODRUFF: What rights will they enjoy would you expect, Representative Tancredo? What are we talking about granting these people that they don't have now?

TANCREDO: Well, legal status is a completely different situation than what they now are laboring under, because they are here in fact here illegally. Legal status gives them the opportunity to, of course, access all aspects of American life, eventually becoming American citizens and having the full rights and responsibilities of any citizen. But you shouldn't be able to gain that by breaking the law to get here. Millions of people around the world try to get here and do come to the United States going through the legal process. It's a slap in the face to them and to everybody who ever ended up here legally to say: All you have to do is sneak into the country, stay here long enough, and we will eventually let you be here as a citizen.

WOODRUFF: I hear you, but what I'm asking is: What rights are we talking about seriously considering granting those who are now in this country illegally?

CANNON: Those who are here illegally under I think any kind of program that would grant them some kind of status would remove from them the fear of being torn out of their houses and thrown out of the country, which by the way, I think affects all Americans. You can't just...

WOODRUFF: But that is a form of amnesty, is it not?

CANNON: Well, what we will give these people is a legal process that they can go through to have a legal status. If they choose to follow that, then they will go through a process that will result in (UNINTELLIGIBLE) of the state.

WOODRUFF: Is that acceptable?

TANCREDO: Well, we have that today.

CANNON: We don't have that, Tom.

TANCREDO: Of course, we do. Anybody can apply for status to come to the United States illegally.

CANNON: People who are here illegally already can't do that. I mean, that's beyond them.

TANCREDO: Well, they can go home and they can then apply to come into the United States like everybody else has done, Chris. Why should we do it for people who have broken the law? Why should we do that?

CANNON: There are two reasons. The first is that in the case of -- we have sort of the lesser reasons, the economy, which is sort of (UNINTELLIGIBLE) this. Pardon me, Tom. First is that you'd shatter the economy. And secondly, who's going to decide...

WOODRUFF: Shatter Mexico's economy or shatter the U.S. economy?

CANNON: No, our economy. We have so many of them that it would seriously hurt our economy. That's a secondary concern. The primary concern which I think we should share is: How do you keep America from becoming a police state if you're going after these huge number of illegal aliens in the United States? How do you keep them from shattering your door or my door?

WOODRUFF: Well, how do you address that, Tom?

TANCREDO: We can say that anything that we want to eliminate -- anything we want to decriminalize, anything that you say: How do we get -- reduce the crime rate in this particular area? We can say by simply making that activity legal. I mean, it's you know, the reality is this: That to enforce our own borders and to allow the United States of America to have integrity, that concept of a United States of America, a sovereign nation, that concept is important. And it's important to actually observe borders.

CANNON: Tom, we entirely agree on that. The question is: Do we make America a police state by trying to kick out this vast number of people who are here already?

TANCREDO: By enforcing our laws. Simply by enforcing anti- immigration laws to make us a police state?

CANNON: How come a number of people we have here illegally, if we're going to remove those people through the legal processes we now have in place, we will have a police state.

TANCREDO: Well, let me tell you that if it's just a matter of numbers, then what we should do, Chris, is instead of perhaps having a huge police force to try to round them up, we should enforce all of those laws that are already on the books against hiring illegal immigrants into the United States, because then...

(CROSSTALK)

TANCREDO: Absolutely. Because then, I want business to do what they are -- what they should be responsible to do: uphold our own laws, live by our laws.

WOODRUFF: One last word, one last word. We'll let you have. You can respond, Congressman Cannon.

CANNON: We don't want to burden American business the way we're talking about here. What we want is to have an open society that has the opportunity for people who have sacrificed greatly, who have come here and contributed to obtain the benefits of at least legal status. We don't want to reward them beyond that unless they're willing to keep the laws. And we certainly don't want to reward criminals or people who are not contributing to society.

TANCREDO: They are criminals. That's it. They're criminals.

WOODRUFF: All right, we're going to have to leave it there. Representative Cannon, Representative Tancredo, thank you both. We appreciate both of you being with us.

CANNON: Thank you.

TANCREDO: Thank you.

WOODRUFF: We will have more on immigration later in this hour, including my interview with Mexico's director of the Office of Migrant Affairs. Up next, a check on some of this day's other top stories, including those out-of-control wildfires out West.

(COMMERCIAL BREAK)

WOODRUFF: Members of the House returned to work today, after the August break, and amid their debates over legislative issues, another matter still is hanging over the Hill: The matter of Gary Condit and his political future.

Our congressional correspondent Kate Snow joins us now. Kate, what are you hearing from Gary Condit's fellow Democrats about how they are receiving him?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Well, hearing mostly negative, as a matter of fact. Most people, ever since Gary Condit did that interview on prime-time television, most Democrats have come out fairly against Gary Condit. His Democratic leader, Dick Gephardt, came out with some very strong statements and said today that he still stands by that. He is still disappointed in Gary Condit. He still feels that he was not straightforward enough.

We expect to hear a lot more of that in the coming days. It may not be so public, Judy, it might be more private. And by the way, we haven't seen Gary Condit here yet. We are waiting for him. There is a meeting of his Blue Dog Democrats which he is a part of. He has not shown up quite yet.

WOODRUFF: Kate, they are talking negatively about him and saying that they are disappointed. But what can they do to express their negative feelings?

SNOW: One of the things that has been mentioned several times by people who have criticized Gary Condit is that perhaps he should be removed from his seat on the sensitive House Intelligence Committee, that's a committee that deals with national security secrets. It's been argued that perhaps he doesn't deserve that seat anymore. Congressman Gephardt, the Democratic leader, was asked about that again today, and he said that he's talking with other members about what options, if any there are, to deal with Gary Condit.

(BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: I don't know what will come of the process. But you have to deal with a fair process here. This is not something where I go off and make decisions. I have to talk with my colleagues, talk with the caucus. We have an ethics process in this House that has to be respected. We're are going to do these things in the right way.

(END VIDEO CLIP)

SNOW: And Republicans for the first time today weighing in on this as well. Republican leader, minority -- majority rather, leader Dick Armey spoke out today and he had this to say about what Dick Gephardt just said. He said, I do think that prudence might suggest to Mr. Gephardt, that he talk to Gary Condit about stepping down from that House Intelligence Committee.

He went on to say, I don't think that would be an inappropriate course for the minority leader to take. So a little bit of Republican pressure pushing the Democrats to do something now about Gary Condit. Some might argue that that's more politics than anything. And one last point, a lot of this, the idea of removing someone from a committee, very unprecedented. It has never done before. This is unchartered territory -- Judy.

WOODRUFF: All right. Kate Snow, thank you very much.

While the criticism as you have just heard, of Gary Condit continues in many circles, his daughter is speaking out in his defense. Following in the footsteps of her brother, Cadee Condit talked to CNN's Larry King. (BEGIN VIDEO CLIP, "LARRY KING LIVE")

CADEE CONDIT, DAUGHTER OF GARY CONDIT: The reason that I am here tonight is because people have made my dad out to be this demon. He is the most, loving, caring, compassionate man that I know. Anyone who calls my dad a murder, I will come on your show and defend him.

(END VIDEO CLIP)

WOODRUFF: You can hear all of the interview with Cadee Condit tonight on "LARRY KING LIVE." That is at 9 p.m. Eastern here on CNN.

Across the nation, a flurry of candidates are entering and exiting major political races. We have several updates on some of the key developments from the campaign trail.

We begin in Vermont, where Democratic Senator Howard Dean announced today that he will not run for reelection next year. Dean first took office in 1991. He said now is a good time for him to step aside.

(BEGIN VIDEO CLIP)

GOV. HOWARD DEAN (D), VERMONT: I will be able to leave the office in much better shape than it was when I came in, financially. And responsibly pass at the time that it makes sense for Vermont. Having been governor at that time, it will be in my 12th year as the governorship. That's a very long time to be governor of Vermont, and the baton has to be passed on some time.

(END VIDEO CLIP)

WOODRUFF: Howard Dean was elected to five two-year terms. But he faced tough reelection battles in his last two campaigns, in part because of his support for a state law allowing same sex unions.

To Minnesota now. The Republican race for governor is growing more crowded. State House Majority Leader Tim Pawlenty kicked off his campaign for governor today. Pawlenty said incumbent Governor Jesse Ventura has no vision for the state, and he described Ventura's first term as, "a political Woodstock." Two Republican businessmen are also considering a run for the G.O.P. nomination.

And Millionaire Democrat Tony Sanchez has made stops across Texas the past two days to promote his campaign for governor. Sanchez made his announcement yesterday in Laredo. He made his fortune in the oil and gas business, and through his companies he donated more than $300,000 to the campaigns of George W. Bush.

If he wins the party nomination and were to defeat incumbent Republican Rick Perry, Sanchez would become the first Hispanic governor of the state of Texas.

And finally to South Carolina where Democrat Alex Sanders today said that he will mount a Senate campaign to replace the retiring Strom Thurmond. Congressman Lindsey Graham is the only Republican to announce for Thurmond's seat. Alex Sanders is the former president of the College of Charleston. He was the first Democrat to formerly enter the race, although a number of others have said that they have considered it.

He has been on the job just a matter of months, and already he's receiving strong reviews. Up next: We meet the new mayor of San Antonio and find out why his supporters see so much potential.

(COMMERCIAL BREAK)

WOODRUFF: The rise in Hispanic political power that accompanies population growth has taken hold in a number of election campaigns, most recently in San Antonio, Texas. CNN's Ed Lavandera reports on the city's new mayor, and the high hopes he represents.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): Mexican melodies fill the San Antonio air. The nation's 9th largest city has always moved to a distinctly Hispanic rhythm. But in San Antonio's 153-year history, there have only been two Latino mayors.

UNIDENTIFIED FEMALE: Here is the new mayor, Ed Garza.

LAVANDERA: Just a few months into his first mayoral term, the political machine is already hyping the future of Ed Garza.

HENRY CISNEROS (D), FORMER SAN ANTONIO MAYOR: Ed has the temperament, the political persona, the natural skills to go a long way in American politics.

LAVANDERA: That's a strong endorsement from the city's first Hispanic mayor. Henry Cisneros catapulted from the mayor's seat to the national political stage. At age 32, Democrat Ed Garza is on the move.

But he's not comfortable with the expectations.

MAYOR ED GARZA (D), SAN ANTONIO, TEXAS: Sometimes we don't appreciate what we have when we have it. And we all have to do that in our daily lives just to appreciate what we have, and so I am not thinking that far down the road yet.

LAVANDERA: Garza is a soft-spoken politician. At age 7, he was already campaigning for a city council member in the middle-class neighborhood where he grew up. Since that time, Garza has immersed himself in the political world, working for a state senator and as a city councilman.

GARZA: I know I caught the political bug early.

San Antonio was the sixth fastest growing city.

LAVANDERA: An urban planner by trade, Garza loves to talk infrastructure with voters. GARZA: Balanced growth supports diversity.

LAVANDERA: Garza's strategy is to start on small projects, build trust and then tackle the major political battles. He wants to completely reorganize San Antonio's political structure.

GARZA: They're not sexy issues, but they're fundamental issues. And again, they attack that core of frustration that people have.

LAVANDERA: Garza was elected mayor in May. One of 11 candidates, Garza won with almost 60 percent of the vote. He won the Hispanic vote, but he also tapped into the predominantly Anglo business community vote.

BRUCE DAVIDSON, "SAN ANTONIO EXPRESS NEWS": Ethnicity was not an issue in this campaign. It was who was the better candidate, who is best qualified, and Ed was head and shoulders above his opponent.

LAVANDERA: There's only one criticism some friends have of the young mayor.

MARIO GALLEGOS, TEXAS STATE SENATE: If there is any flaw about Ed, he's going to have to brush up on his Spanish. you know?

LAVANDERA: He doesn't have to worry about the Spanish, his fiance is a bilingual schoolteacher.

GARZA: Hi, how are you?

LAVANDERA: But in every language, the hopes are the same for Ed Garza.

ARTURO VARGAS, LATINO ELECTED OFFICIALS ASSOCIATION: We hope really that he demonstrates the kind of talent and caliber of Latino elected officials around the country that could some day serve in the Oval Office. LAVANDERA: He is only 32, and as one San Antonio political observer puts it, whether he likes it or not, Ed Garza is getting pressure to be a player on the national stage. Ed Lavandera, CNN, San Antonio.

(END VIDEOTAPE)

WOODRUFF: The immigration debate as seen by the Mexican government. Up next, my conversation with Mexico's director of the Office of Migrant Affairs.

(COMMERCIAL BREAK)

WOODRUFF: We've covered the immigration debate this hour from the perspective of the United States. But how do Mexican officials view the issue? A little earlier I spoke with Juan Hernandez, who is a member of the president's cabinet in Mexico, and the director of the office of migrant affairs.

(BEGIN VIDEOTAPE) Today, President Fox said he expects to see an agreement by the end of this very year, he said, on this whole question of finding a way to legalize the presence of many Mexican immigrants in this country. What did he mean by that?

JUAN HERNANDEZ, MEXICAN CABINET MEMBER: This is something that Vicente Fox has had in his heart and in his mind for years, all the way back to when he was governor. The first words that came out of his mouth when he met, he said -- Fox met George Bush in 1996 in March, he said, what can we do for those Mexicans living in Texas?

That is still what he is talking to George Bush about and he is not going to stop talking about it. He created my office, yours truly, a presidential office for Mexicans abroad. He doesn't see the nation of Mexico ending at the border. He talks about 123 million Mexicans, including Mexican Americans like yours truly.

WOODRUFF: Well, when President George Bush, in July, raised the subject of blanket amnesty, many people thought that that was a possibility. It now looks like that is not going to happen. Are the people in Mexico going to be disappointed when they understand that there will not be blanket amnesty?

HERNANDEZ: Well these -- the "A" word, the "L" word, all of this vocabulary is so loaded. Once again I don't know what is going to happen today. I am not going to guess what is going to happen today and tomorrow with these negotiations. I am going to stay away from that totally.

But I will tell you that the Mexican people are looking toward George Bush as being a leader, someone who even has in his family, (UNINTELLIGIBLE) his sister-in-law, someone who is willing to come to Mexico on his first trip. That sounds minor to a lot of people. But let me tell that you that George Bush's father only went once to Mexico. Clinton negotiated NAFTA and did not go to Mexico until after 5 1/2 years in his administration.

Reagan only went once in eight years. George Bush goes on his first trip. That's a signal to the Mexican people that the United States wants a close relationship with us and we are going to jump to it.

WOODRUFF: What do the people of Mexico expect?

HERNANDEZ: We expect that the we be treated as equals. We believe that the people up here, including the undocumented, may I say, are the new American pioneers. They've come up here for the same reasons that the Irish came. We do love this country, want to have a greater relationship.

We want Canada, the United States, and Mexico to be one economic block.

WOODRUFF: My question is, will there be disappointment when it's understood that it won't be blanket amnesty, it will be something less than that, some form of guest/worker program which has yet to be worked out in which the White House says is a long way of being worked out?

HERNANDEZ: As I tell you, I am not going to guess what is happening right now. But the disappointment is that we don't get driver's license and we build the roads here. The disappointment is that we built the health care centers and take care of the elderly and we don't have care in this country, that we build the schools and they won't let our kids go to universities. We are changing in Mexico and we are asking the United States to change with us.

WOODRUFF: And what if it doesn't change? I mean, what are -- how high...

HERNANDEZ: It is changing. It is changing. We have high expectations, the Mexican people, the 123 million Mexicans, including the Mexican-Americans. We're already changing. I come to the United States every week and meet with community leaders and meet with governors.

Last week with the governor of New York and he said, we're going to have health care in this state for every single person including the undocumented, he told me. Check it out with him.

A few weeks before with Governor Perry in Texas, now they passed a law that every kid can go to the university whether documented or undocumented. It is already changing.

WOODRUFF: So is it happening fast enough, is my question?

HERNANDEZ: I believe that if we had looked back a year and 1/2 ago, two years ago, we would be shocked at how well we are doing. And I think that we're going to look in just a few months, in just a few years, and at the end of the Fox Administration and the Bush Administration, we are going, my goodness, look at the wonderful things we have been able to do together.

WOODRUFF: With what sort of program? What are we are talking about? HERNANDEZ: With all types of innovative programs.

WOODRUFF: I am talking about for immigrants who are in this country right now illegally. What about them?

HERNANDEZ: They are going to be in this country, I am sure, with the efforts of Mexican-Americans, of Mexicans, U.S. Americans in general, people are going to realize here, they are going to mirror themselves in these people and remember that their grandparents were also immigrants.

They are going to have the health care that they deserve. And they are going to have the education that they deserve. And by the way, in Mexico, too. Because we are fighting down there to make conditions better too.

WOODRUFF: All right. Dr. Juan Hernandez, thank you very much. We appreciate it.

HERNANDEZ: Thank you.

(END VIDEOTAPE)

WOODRUFF: We talked to Dr. Hernandez right across the street on the Capitol grounds.

In less than two hours, the first state dinner of the Bush presidency gets under way. We will get an inside look at the preparations of first lady Laura Bush, next.

(COMMERCIAL BREAK)

WOODRUFF: Secretary of State Colin Powell appears to be taking an active public role in the U.S.-Mexico summit. Among other things, he had lunch with President Fox today. But there had been questions here in Washington and in the news media in recent months about Powell's clout within the Bush Administration.

In an interview with CNN's Andrea Koppel, Powell's deputy, Richard Armitage rejects suggestions that Powell has been eclipsed by other members of the president's national security team.

(BEGIN VIDEO CLIP)

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: It seems to me, you ought to view Secretary Powell not as a hundred yard sprinter, but as a marathoner and the secretary, if he believes that he is right, takes very seriously his role as the principle foreign policy adviser to the president.

He wants to make sure that his views are fully exposed or that the president is fully exposed to his views and after that, like any good soldier and he certainly was a good soldier for 35 years, he will salute and march on. But by and large, he has been very pleased that the president has seen fit to -- in general, adopt many of the -- of the views espoused by this department.

(END VIDEO CLIP)

WOODRUFF: CNN's "GREENFIELD AT LARGE" will focus on Secretary Powell's influence within the administration, and whether he's living up to high expectations. That's tonight at 10:30 Eastern here on CNN.

The plates are set, the White House chef is whipping up an entree of bison crested with pumpkin seeds and first lady Laura Bush apparently is ready for the festivities to begin this evening. With a camera in tow, Mrs. Bush offered a glimpse of the set-up with the first state dinner of the Bush Administration.

She seemed equally enthusiastic about the menu and the red dress she plans to wear.

(AUDIO GAP) WOODRUFF: Well, we are sorry about that. We did have Mrs. Bush talking about that dinner tonight. Our apologies. Scoring an invitation to this dinner, by the way, from Mexico's President Fox is quite a coup, particularly since the room can only hold 136 guests.

Members of the cabinet, the Congress, and members of the Mexican delegation will dine and dance after President Bush begins it all by having the first dance with presumably Mrs. Bush.

And finally, some politicians who are good sports. House Speaker Dennis Hastert is proud to announce that he has been named an honorary team member for this month's World Wrestling Championships. A former wrestler and wrestling coach, Hastert plans to attend the championships in New York later on the this month.

And Senator Ben Nelson of Nebraska plans to take a flying leap. The 60-year-old Democrat will sky dive for the first time this coming Saturday to promote military recruitment. Nelson will be hooked up to a trained skydiver when he takes the 12,500-foot plunge over Lincoln before the Nebraska/Notre Dame football game.

We will not ask Bill Schneider to do that but as you probably know, Bill Schneider awards a political play of the week. And we want your nominations. So, please, e-mail your ideas to: insidepolitics@CNN.

And of course, tune in on Fridays to see if you picked the play of the week. Now I am told that we do have Mrs. Bush commenting on tonight's state dinner. Let's again.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY OF THE UNITED STATES: And just like the tasting for the dinner, we -- I have been working on it a long time. I made it myself -- no, I'm only kidding.

(LAUGHTER)

It's really -- it's beautiful red lace with hot pink under it. So I think it will be really, real pretty.

I think that people expect a beautiful and elegant formal dinner at the White House, and it will be. But it will also be very festive, after the entertainment, after Dawn Upshaw sings we are going to go out onto this balcony and have fireworks so that'll be a new thing for a state dinner but especially festive, I think.

(END VIDEO CLIP)

WOODRUFF: And of course, CNN will cover as much of tonight's events as we can, and we'll report it to you tonight and tomorrow, no doubt, right here on INSIDE POLITICS.

That's it for this edition of INSIDE POLITICS. But, of course, you can go online all the time at CNN's allpolitics.com. AOL keyword: CNN. Our e-mail address is: Insidepolitics@CNN.com. I'm Judy Woodruff.

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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