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Bush, Fox Discuss Immigration Issues; Could the GOP's Outreach to Hispanics Backfire?; Will Democrats Take Action Against Condit?

Aired September 6, 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. As legislative battles between the White House and Congress start heating up, a leading Senate Democrat seems to be digging in his heels.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow on Capitol Hill. No one wants to talk about Gary Condit out loud, but what's happening behind closed doors?

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: I'm John King in Toledo, Ohio, where Presidents Bush and Fox have taken the U.S.- Mexico summit on the road.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm Bill Schneider in Washington with a look at why the GOP outreach to Hispanics could backfire.

ANNOUNCER: Now, Judy Woodruff takes you INSIDE POLITICS.

WOODRUFF: Thank you for joining us. President Bush's trip to Ohio with Mexico's Vicente Fox at his side has as much to do with domestic politics as with international policy. In addition to bonding with one of his closest counterparts, Mr. Bush also is hoping to cultivate his relationship with Hispanic voters in this country.

Our John King joins us now from the carefully chosen backdrop for this trip: Toledo. John?

KING: Hello to you, Judy. Well, not unusual at all for a president of the United States facing a fierce political debate over difficult issues like trade and immigration to go on the road to sell his plans. What makes today a little bit unusual, though? It's not very often the president of the United States takes another president with him.

(BEGIN VIDEOTAPE)

KING (voice-over): It was a road show with many goals, celebrating diversity for one.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Oh, I know there's a lot of talk about Mexican laborers coming to the United States, but I want to remind my fellow citizens of this fact: Family values do not stop at the Rio Bravo.

KING: Proving a commitment to work together through difficult issues, another.

VICENTE FOX, PRESIDENT OF MEXICO: We face a challenge that may seem formidable, but so is our determination to overcome our differences and reach common ground and obtain a common purpose.

KING: If Toledo seems an odd choice, look again. Its Hispanic population has grown 50 percent in the last decade and it is a heartland hot spot in the debate over free trade. The two presidents describe their talks in Washington as productive, but they could not agree on the details or a timetable for major changes in U.S. immigration laws that would benefit Mexico and Mexicans in the United States illegally. Mr. Fox wants an agreement this year, but a joint statement called the immigration issue extraordinarily challenging and promised only to work toward a deal in a timely manner. Mr. Bush hit on the major obstacle.

BUSH: We've got to work with the Congress. And we've got to come up with a solution that will -- that Congress can accept.

KING: President Fox was afforded the rare honor of addressing a joint meeting of Congress. He aimed his appeal at lawmakers who oppose giving legal status to workers who went to the United States illegally.

FOX: As the history of this country shows, migration has always rendered more economic benefits to the United States than the cost it entails.

KING: The two presidents see eye to eye on free trade and tout the 1994 North American Free Trade Agreement as they push for a new hemisphere wide trade zone. But free trade is another tough sell in Congress and here in Toledo, where the local Jeep factory is losing jobs as one in Mexico expands.

REP. MARCY KAPTUR (D), OHIO: Well, in Ohio, we've lost over 37,000 jobs. America has lost over 770,000 jobs to Mexico since NAFTA's passage. Those aren't invisible people in our country. Those are real workers.

(END VIDEOTAPE)

KING: And for all the talk of those emotional policy debates over issues like trade and immigration, also a dose of pure politics to this. Mr. Fox is enormously popular with Mexican-Americans and other Hispanics in the United States, and Mr. Bush thinks their friendship and trips like this one can only help his courtship of Latino voters -- Judy.

WOODRUFF: John, as you mentioned, it is not just immigration that is an issue between the United States and Mexico. Some of these other issues are coming up as well.

KING: That's right, Judy. And both presidents tried to tackle one of those thorny issues today. President Fox in his speech to the Congress urged the Congress to set aside something Mexico views as insulting: the annual certification

(AUDIO GAP)

KING: ... or not the Mexican government is cooperating in the war on drugs. Mr. Fox says he is cooperating, and one way that he can prove that and build trust with the United States is for Congress to waive that annual review for at least three years.

The other issues, of course, whether Mexican trucks will be able to cross the U.S. border and move into the United States. Congress trying to block that. President Bush saying Congress cannot do that. The president once again saying today the United States is bound by the NAFTA agreement to allow those trucks in and threatening once again to veto an appropriations bill containing that language if it makes it to his desk -- Judy.

WOODRUFF: All right, John King, who traveled to Toledo with President Bush and President Fox.

Well, here on Capitol Hill, House Republican leaders today unveiled an economic growth package that calls for, among other things, a cut in the capital gains tax rate. Our Congressional correspondent, Jonathan Karl, has the inside story on that.

Jon, what is going on here with Republicans and the budget, really?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well , what is really happening here is that House Republicans are terrified that they're in danger of losing control of the House next year because of a one-two punch: On one hand, the slumping economy, and on the other hand, the dwindling budget surplus that could force Congress to dip into that Social Security surplus.

Now the wake-up call came yesterday when House Republicans got an internal GOP poll that showed that it is the Republicans that are paying the price for the slumping economy. And the figure in that poll that created the most stir that was the biggest red flag was on what they call the generic ballot. On this question of who you would vote for Congress if the election were held today, only 40 percent said that they would vote Republican, compared to 46 percent who said they would vote Democratic, a six-point Democratic advantage.

Now just last July, the Democratic advantage was only two percent. So what's happening here is Republicans are worried that they are in danger of losing control of the House of Representatives. That's why you see this coming out with an economic stimulus package, and that's why you saw Dennis Hastert come out today emerging from a meeting of Republican House members to promise in the most emphatic terms that the House, the Congress, will not dip into the Social Security surplus even if it means that they must cut popular programs. Here's what Hastert said.

(BEGIN VIDEO CLIP) REP. DENNIS HASTERT (R-IL), MAJORITY LEADER: We're not going to dip into the Social Security trust funds in the year 2002, or we think that in the year 2001. We're going to avoid doing that. If we have to do across-the-board cut or if we have to do something to hold on the line on spending, we'll do that before we dip into Social Security trust funds.

(END VIDEO CLIP)

KARL: And that was actually Hastert speaking today. Hastert and the other leaders, actually House and Senate Republican leaders, did meet with the president today on the other end of Pennsylvania Avenue and reinforced this message that they are on what they called the two- year plan. They are worried about what's going to happen next year in the elections. They can't afford to have the luxury of time waiting for the economy to rebound.

WOODRUFF: Jon, if that's the case, is the president on board with all this?

KARL: Well, House leaders -- first of all, Dennis Hastert did come out today, and one of the other things he said is that the president is absolutely on the same page as Republican leaders. But privately, Republican leaders will acknowledge that there is at the very least a difference of opinion on timing. The president saying we can wait till next year before pursuing added economic stimulus like a capital gains tax cut.

But what House Republicans are saying is that may be right. You know, ultimately, the economy may rebound, but the question is: Does it rebound quick enough? And on that question, they are not necessarily on the same page.

Judy, another footnote here is that not everybody in Congress is on the same page on the Republican side. While most Republican leaders are saying, "No way, no how can we dip into the Social Security surplus," Pete Domenici today in a hearing with the budget director Mitch Daniels said there is absolutely no reason why they shouldn't be able to dip into the Social Security surplus. So there's no reason why that money should be used to pay down debt instead of something like, say, education or defense.

WOODRUFF: Jon, different subject. And just quickly, campaign finance reform. Give us an update on where all that stands right now.

KARL: Well, the primary sponsors of campaign finance reform -- Russ Feingold, John McCain -- and the House sponsors -- Marty Meehan and Chris Shays -- held a press conference. We have some video of that press conference that was held earlier today to kind of say they are still fighting for this.

Of course, they still need a vote in the House of Representatives on that. They are pushing for what they call a discharge petition which we've been following. They now have 207 signatures on that petition. If they get to 218, they can force the vote in the House of Representatives. And that press conference was held largely to say they're almost there and they believe they can get there.

WOODRUFF: All right, Jonathan Karl reporting from the Capitol.

Well, in the political battle over the budget and spending priorities, Senator Edward Kennedy is vowing to stand firm and fight hard. I spoke with the Massachusetts Democrat here on the Hill today. And in light of President Fox's address to Congress, I started by asking Senator Kennedy if the White House is moving quickly enough on immigration reform.

(BEGIN VIDEOTAPE)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: I think the White House is divided, quite frankly. You hear one story one time and another story at another. I believe that we ought to move ahead.

One item that has bipartisan support, which is the regularizing the situations for the wives or children of either American citizens or permanent resident aliens, what they call 245-I, has strong bipartisan support in the Senate. We still can't get it through the Senate because of Republican opposition. So it's not entirely clear that the president has -- have been able to convince all of his members of his party to support that position.

WOODRUFF: So essentially, President Fox goes back to Mexico with his -- with an empty hand? I mean, what are we seeing here?

KENNEDY: Well, I think there are many -- many of us who want to make some changes in that. I think this is going to be a continuing process. I think he understands that. And I think what he has -- all leaders want to get action done and do it today. But I think he understands it's a process. I think the proof in the pudding is going to be whether there'll be a follow on by the administration after President Fox leaves. That's going to be the test.

WOODRUFF: Very different subject: stem cell research, research that would be federally funded. Are you reassured, senator, after yesterday's testimony before your committee by Health and Human Services secretary, Tommy Thompson, that the president has now opened the door sufficiently wide enough for the vital medical research that needs to be done, given the restrictions that he's...

KENNEDY: I don't think anyone can give those assurances, although Secretary Thompson made a very good case in attempting to do so, because I think there's still so many questions that need to be resolved. One is the security of the various lines that have been developed. They've been contaminated by the use of nutrients from mice and can they really be used? What's the age of the stem cell lines themselves? The various patent restrictions, which put severe restrictions upon the NIH, which is the best research institution in the world for being able to develop those items.

What I am convinced of is that the Congress will take what action is necessary to assure that this type of research, which is so important to families in the United States, that offers the best hope for cures in terms of cancer, Alzheimer's, Parkinson's disease, diabetes, that we will take the steps that are going to be necessary to give the assurances that those stem cells will be available for research.

WOODRUFF: But how can you do that given the restrictions the president has placed on which cell lines can be used?

KENNEDY: Well, the question, of course, is whether the cell lines themselves are going to be able to -- are multiplying sufficiently to guarantee the stream of lines into the future. Newer kinds of stem lines do multiply more rapidly. Older ones do not. And we do not know from the derivatives whether that's going to be the case with the ones which have been identified by the administration. That's still very much up in the air.

WOODRUFF: Senator, several other health-related questions. First, on the question of prescription drugs for seniors. This was something that you and other Democrats very much wanted to see funded this year. Now we have an economy that's slumping, we have decreased revenues coming into the federal government, a tight budget. Is this going to get done?

KENNEDY: Well, it has to get done. Prescription drugs for the elderly is as important as physician care and hospitalization, and you can imagine how the elderly would react if we took away hospitalization or physician's care. Prescription drugs are of that dimension in terms of how the elderly view their health care now and they will in the future.

The difference on the budget item is that there is what we call a reserve fund that was $300 billion that was set aside for the prescription drug. And that has -- that's separate from the other budget sort of considerations. If it is not used now in a prescription drug, it will fall back into the general revenue streams. But if it is set out there now and the Congress can act and take advantage of it. And I think we have to take advantage of it. I think it would be a major feeling of Congress if we did not do so.

That has to be a high priority. We shouldn't leave here unless we take that step, and I think we can. I think the pieces are there to do it. I think the industry itself has a different view. I think they're more willing to work with the Congress than they have been in the past. I find myself that there's a coming together both in the finance committee and among the leadership. I'm very hopeful we can get it done.

WOODRUFF: Patients' bill of rights. The president worked out an agreement, as you know very well, with the patient's right advocate, Representative Charles Norwood of Georgia, a Republican. This is a deal that won approval in the House of Representatives. The president gave some ground here. This was a bill that allows patients now to sue in state courts in some circumstances; made it easier to sue. I guess the question some are asking now: The president's given ground, is Senator Kennedy ready to give?

KENNEDY: Well, first of all, it isn't just Senator Kennedy or those that have supported basic protections for patients. What we want is a patient's protection -- not an HMO protection. And the review of the compromise that has been made is that this bill is still protecting the HMOs and not the patients. That is not just what I am saying, that is what the medical profession says, that's what the American Medical Society has said, and the doctors organizations. It's what the patients' organizations, what the nursing organization. There really isn't a major health delivery group representing any patients or medical professions that are supporting the administration's bill. None, zero.

WOODRUFF: Senator, are you saying there's no give on your part and the part of other...

KENNEDY: Of course, there is. All we have to do is to try and work out a process that's going to protect the patients. The administration understands that. The administration wants to do that. If they want to continue to protect the HMOs, it's going to be very difficult to work it out. If they say that their really interests are protecting the patients, the children, the women, the disabled in this country, the workers in this country, it's not going to be difficult at all to work out. That's going to be the question.

WOODRUFF: Finally, senator, on the question of minimum wage. This is an issue again very close, one you followed very closely over the years. You were on the verge of proposing another increase in the minimum wage. It would take it to $6.65 an hour. There are some Republicans now saying they will only consider this if it is tied to a cut in the capital gains tax rate. Is this something you would consider?

KENNEDY: I would not. But we have increased the minimum wage 17 times without additional tax expenditures, a tax benefits, tax goodies. Seventeen times over the history of it. And now the Republican leadership is holding this hostage to their capital gains tax, even though they are providing an increase for every member, $3,700 increase in their salary last year and $4,800 increase in their salary this year. Eleven million Americans will not get an increase in the minimum wage. That is hypocritical and wrong, and we're going to not let them get away with it. We're going to battle on this. It seems to me that most Americans understand that people that work 40 hours a week, 52 weeks of the year should not have to live in poverty. And we're going to press that.

WOODRUFF: Senator Kennedy, thank you very much. We appreciate it.

KENNEDY: Good.

(END VIDEOTAPE)

WOODRUFF: I spoke with Senator Kennedy in a room off the Senate floor known as a hideaway. A number of senators have these, and he gave me a tour of some of the mementos he has there. We'll show you around on a future edition of INSIDE POLITICS.

Stay with us. This is INSIDE POLITICS. ANNOUNCER: Is the Bush White House drawing new battle lines with investigators that could lead to court? Also ahead, by courting Hispanics, are Republicans helping their party or the Democrats? Now that Phil Gramm is retiring from the Senate, who may be angling for his job? And what's the connection between "The Odd Couple" and politics? Live from Washington, there's more of INSIDE POLITICS with Judy Woodruff straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: As Congress got back to work this week, all eyes again on a gentleman from California. Kate Snow, our congressional correspondent here.

Gary Condit, Kate, questions about whether his Democratic colleagues are going to take some action against him. Yesterday, the House Democratic leader Dick Gephardt said that he was going to be talking to some of his fellow Democrats. What's happened on that part?

SNOW: Well, CNN has learned, Judy, that in fact he has had some conversations last night and today. And aide says that Gephardt has had several, a handful of private meetings to talk about Gary Condit. What was said in those meetings, we don't know. Who was at those meetings, who he was meeting with, we don't know that either. The aide wouldn't go further than that.

But we do know that these meetings and these discussions about Gary Condit are happening very quietly. In more public settings at a leadership meeting last night with the Democrats and also this morning at a meeting of all of the Democrats in the caucus, there was no mention of Gary Condit. It simply never came up at all. In fact, one member of the Democratic leadership said to me earlier that those meetings in the course of regular business here on the Hill, at those meetings, it's not coming up. This member said it's almost like it's nonexistence, it's in the past. But again, Judy, we know that discussions are happening, just very privately.

WOODRUFF: Now Condit, when he came back last night, was the first time many of his colleague had seen him on the House floor. How did they receive him?

SNOW: He was here for about half an hour last night when they took a vote on the House floor. And interestingly, he got a very warm reception. There were about a dozen members, many of them from California, who gathered around. They gave him hugs, kisses, pats on the back. These are friends of Gary Condit. They received him very warmly. And in fact, one aide I was speaking with earlier today made that point, that there are those who are very friendly with Gary Condit and who, in this aides' words, are going to circle the wagons a little bit and still be very supportive of him. On the other hand, there are still those who are talking about him, you know, not those 12 but the other 400 or so members who are still talking about concerns about Gary Condit.

WOODRUFF: All right, Kate Snow, thanks very much. Well, joining us now with his reporter's notebook, Bob Novak of the "Chicago Sun-Times."

Bob, first of all, you've been looking into the California redistricting issue and how it affects Congressman Condit's seat.

ROBERT NOVAK, "CHICAGO SUN-TIMES": Judy, you've probably read that they have made the district safe for Democrats, the new Democratic redistricting plan going through the Californian legislature. Well, it is more Democratic than it is now, but it is not safe. Here's the situation. The only Democrat in the old days who could carry this district that's so Republican is Gary Condit. But so if he were to resign now, which the Democratic leadership doesn't want him to do, they couldn't carry the district. They want him to serve out his term, then they hope they can get somebody to win in the next district, although it'll be -- in the new district, although it would be a tough election. But Gary Condit they don't want to run again, because today, he can't win in any district.

WOODRUFF: Bob, now back to this question of the capital gains tax rate that's come up a couple of times already in today's program. What are you hearing about what the sentiment is on the Republican side and what the president's views are?

NOVAK: Speaker Hastert and Senate minority leader Trent Lott have met with the president in the last couple of days, and the word that is being spread on the Hill is the president is not going to push forward, but he won't do anything against it. So I am telling you it is full speed ahead with the Republicans. They're going to get some Democrats, and I think it's going to go right through the House of Representatives and a pretty good chance in the Senate. And the president guaranteed will sign a cut in the capital gains tax.

WOODRUFF: All right, Bob Novak. Now the state of Texas, Senator Phil Gramm announcing this week he's going to retire at the end of this term next year. You've been doing some picking around on that story.

NOVAK: There have been secret meetings, Judy, about whether it might be a good idea for the senator to retire so that the Republican governor of Texas, Perry, could name a Republican in his place. That's not going to happen. Phil Gramm thinks it would be a very bad idea, and I think the White House agrees it would be a bad idea for him to quit his job and be appointed president of Texas A&M University. He is going to serve out his term, I am confident.

Who are the replacements? Well, the party leaders in both parties I think have their choice. Democrats, Allen Kirk, the mayor of Dallas. The Republicans, Henry Bonilla, who is a Hispanic- American. He would be the first Hispanic-American senator from Texas if he's elected and a Republican to boot. But believe me, there's a lot of other people in the campaign picture, and it's not going to be easy to get the people they want out there.

WOODRUFF: Bob, all the way over in the state of North Carolina, there's another longtime Republican senator announced his retirement, of course, Jesse Helms. One of the people talking about -- thinking about running, Elizabeth Dole. And you've heard something about all that.

NOVAK: This is fascinating. Elizabeth Dole is somebody who takes a long time to make up her mind. And she is getting the word this weekend from the national leadership of the Republican Party that, "We love you, Mrs. Dole. We love you, Elizabeth. But we want you to make up your mind in 72 hours, because the indecision has got everybody on the edge." Congressman Ron Burr, who's a really attractive person, a possible candidate, won't run if she runs. But he doesn't know if she's going to run. So they say, "Elizabeth, by Monday morning, we would like to have your answer." We'll see if she responds to that.

WOODRUFF: All right. Well, we'll be all over the phones this weekend to try to find out. Bob Novak, thanks very much for letting us look at your notebook again.

The political risks and the potential rewards on the immigration issue. That's still ahead. But first, a mysterious streak in the night sky, but scientists say there's a very logical explanation. Details next in our news update.

(COMMERCIAL BREAK)

WOODRUFF: Question: Are Republicans courting new political problems by courting Hispanics? That story next on INSIDE POLITICS. And Arizona Governor Jane Hull is joining us to talk about the Latino vote, immigration and other political issues. And later, an update on a showdown between Republican Congressman Dan Burton and Attorney General John Ashcroft.

(COMMERCIAL BREAK)

WOODRUFF: President Bush says he wants a new agreement with Mexico on the issue of immigration. But could the president's desire to make a deal put his own political party at risk? Our senior political analyst Bill Schneider has been studying the immigration issue. Bill, first of all, why does the Republican Party feel it has to court Hispanic voters?

SCHNEIDER: One, Hispanics are the fastest-growing constituency in the electorate. Two, both parties agree the political trend among Hispanics has been against the Republicans, despite against Bush's aggressive courting of Hispanic voters, they went better than two-to - one for Al Gore last year. Look at states with a big Hispanic vote. California beyond the reach of Republicans, mostly because of Hispanic voters. Florida, Arizona, Colorado, Nevada, New Mexico, all slipping away from the GOP because of Hispanic voters. Republicans need a Hispanic strategy, Judy, because without one, they're in deep trouble.

WOODRUFF: Well, if that's the case, Bill, then what's all the controversy about?

SCHNEIDER: Some Republicans claim that more Hispanic citizens would mean an even greater increase in the Democratic vote. Here's what one political scientist who's done a study of Hispanic politics says.

(BEGIN VIDEO CLIP)

JAMES GIMPEL, UNIVERSITY OF MARYLAND: The bottom line is that the Latino vote is heavily Democratic. Any newly-naturalized Latinos are likely to be seven to three Democratic, or at least six to four Democratic, and this is not good news for the Republican Party.

(END VIDEO CLIP)

SCHNEIDER: Professor Gimpel's data show that among Hispanic voters, Democrats have an 11-point edge over Republicans. But among Hispanics who are currently noncitizens, the Democratic advantage is 24 points. Turn those noncitizens into voters, and the Republicans' problem gets a lot bigger. But Republicans who favor immigration reform believe President Bush is poised to make a breakthrough with Hispanics.

(BEGIN VIDEO CLIP)

BUSH: Glad to meet you.

(END VIDEO CLIP)

SCHNEIDER: George W. Bush reversed the downward trend in Republican voting among Hispanics. The Hispanic GOP vote peaked at 37 percent for Reagan in 1984. Ironically, President Reagan signed a bill granting amnesty to illegal aliens in 1986, and the Hispanic Republican vote started going down: 30 percent for the elder Bush in 1988, 25 percent for Bush in 1992, 21 percent for Dole in 1996.

Then the reversal: 31 percent for George W. last year, an opening. The White House trumpets the fact Hispanics gave President Bush a 59 percent approval rating in a June Gallup poll, and some other statistics as well.

(BEGIN VIDEO CLIP)

SHARON CASTILLO, REPUBLICAN NATIONAL COMMITTEE: 60 percent of Hispanics approve of the tax cut; 62 percent approve of some kind of reform of Social Security; 89 percent of Hispanic parents approve of the President's education plan.

(END VIDEO CLIP)

SCHNEIDER: The White House sees immigration as an important symbolic issue to Hispanics, a way for President Bush to show his cultural sensitivity.

(BEGIN VIDEO CLIP)

BUSH: They're willing to walk across miles of desert to do work that some Americans won't do, and we've got to respect that, seems like to me, and treat those people with respect.

(END VIDEO CLIP) WOODRUFF: So, Bill, what's the bottom line here? Who is having the stronger argument, the White House, or the people who disagree with it?

SCHNEIDER: You know, Judy, in the short run, I think the evidence supports the critics of the White House. Increase the Hispanic vote, you're going to increase the Democratic vote. But the White House is not looking for a dramatic turnaround in the Hispanic vote, and that's certainly not going to happen in the short term. They talk about gaining four or five points, just enough to make the GOP competitive. They believe the immigration issue can help them do that.

In the long run, White House strategists believe Hispanics will be like white ethnics. As they move into the economic mainstream, they'll vote more Republican, like Irish and Italian and Polish voters. There's some evidence of that. But backers of immigration reform say it will never happen if Republicans scapegoat Hispanics as lawbreakers or welfare cases. That's why President Bush is sending a message of cultural sensitivity and creating a special relationship with Mexico -- Judy.

WOODRUFF: All right. Bill Schneider, thanks very much.

Joining me now, the governor of the state that borders the United States with Mexico, Jane Hull of Arizona. Governor, thank you very much for being with us.

GOV. JANE HULL (R), ARIZONA: Thank you, Judy. It's good to see you again.

WOODRUFF: You too.

Bill Schneider's report raised a number of questions. One of them is this whole issue of whether courting -- going after Hispanic voters is good for the Republican Party or runs a risk of courting people who may end up voting Democratic anyway?

HULL: I think that will find it. I am a border governor whose state is turning Hispanic by 1920. We will have about 50 percent of our kids graduating from high school that will be Hispanics.

(AUDIO GAP)

HULL: And in my state, I have tried to...

WOODRUFF: I am sorry, governor, I am told that we are not hearing your sound. Can I just hold the microphone like this? Does this work? So the point that you were making is that...

HULL: Point being myself as a border governor. I deal with the Hispanic issues every day. I deal with the issues of illegal immigration. I wanted to make my state a better place for everybody that lives in my state, and that certainly includes the Hispanic...

WOODRUFF: We are going to -- I am told that the sound is not working. We are going to come back to you in just a minute. We're going to take a break and try to fix this audio problem. We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: I'm back at the Capitol now with Arizona Governor Jane Hull. We are apologizing about the audio problems.

HULL: That happens.

WOODRUFF: We hope we can hear you now loud and clear.

HULL: I hope so. I will talk louder.

WOODRUFF: On the question of whether the Republican Party is smart to go after Republican voters. You were saying you deal with Hispanic voters every day. For you, you were saying you got what, 45 percent?

HULL: Yes, there was a recent poll. John McCain has about 50 percent and I think I have about 45. The President did very well in Arizona politics, and as I say, the Hispanic community is rising, both in experience and I certainly have appointed many Hispanics into my administration.

WOODRUFF: Let me ask you about the question -- some of the questions that President Bush and President Fox are talking about today. Immigration reform, how quickly -- it's clear that President Fox wants the United States to move very quickly.

HULL: He does.

WOODRUFF: How quickly do you think it's smart to move on some of these changes?

HULL: I don't think that you can move quickly. I have been in office looking at this issue for four years, and certainly it's an issue that the more you find out, the more problem arise. I think that we can move into it slowly. I offered Arizona as a pilot state two or three years ago. But the technology is there.

I tend to believe that many of the people that live in my state come over, work, and would really like to go home and see their folks. I believe that certainly that President Fox has made that easier. I think it's very possible and doable, but I believe, like anything, it has to be done with a great deal of public support.

WOODRUFF: The economy, here in Washington, there's a lot of discussion about what the sluggish economy is meaning in terms of federal spending, revenues are down. Your state of Arizona is facing some tough choices. Tell us briefly the kinds of tradeoffs and choices that you are looking at having to make?

We have tough choices, but compared to many states we are still growing. We have a three to four percent growth instead of our usual eight or nine percent. We will be cutting dollars from our budget very soon.

The choices that we have to make are tough in that we don't usually touch entitlement spending. We don't touch dollars for kids. We don't touch health dollars, we don't touch school dollars. So a lot of the cuts will end up on very few agencies. The universities are always the one that I regret the most. But we will make those cuts. We do have a rainy day fund and we will use some of it, and we will get through this. We have gotten through it before.

WOODRUFF: And finally, Governor, you were here in Washington for meetings. But you were also here, and one of the select few invited to last night's first state dinner at the White House with President Fox. Tell us about it.

HULL: It was a lovely event. Very, very tasteful. I didn't know I was eating bison until this morning. But it was just a great event and again, well done. I think the friendship between the two presidents is extremely important, and I think that both of them refer to the fact that you need to be neighbors and friends before you can enact policy. And I think that was a very important statement from both of them.

WOODRUFF: All right. Governor Jane Hull of Arizona. Thank you.

HULL: Good to see you.

WOODRUFF: Good to see you in Washington. Maybe we'll see you in Arizona one of these days.

HULL: Please come back when it's cool.

WOODRUFF: I would like to. Jane Hull, good to see you.

The Bush White House fighting on two fronts today against investigators seeking information from the administration. Our White House correspondent Kelly Wallace is here with details on that. Kelly?

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Judy, we have two potential showdowns between the Bush administration and Congress. Number one with Republican Congressman Dan Burton, chair of the House Government Reform and Oversight Committee.

You will recall, Congressman Burton well-known for his investigations of the Clinton administration. Well, today, the Congressman's committee issuing a subpoena for the Justice Department to turn over documents relating to organized crime cases, as well as investigations into campaign fund-raising abuses back in 1996. The committee saying that it has a legitimate and constitutionally mandated authority to do its oversight work and that it needs these documents.

The White House seeing things differently. Administration sources telling us that President Bush has signed off on the advice of his counsel, Al Gonzales, for the administration to invoke what is called executive privilege to prevent the committee from getting access to these documents. We do know that Attorney General John Ashcroft is supposed to go before the committee next week. He is expected to appear.

Sources telling CNN during that appearance, that is when the attorney general will invoke executive privilege to prevent -- again, the committee from getting these documents. The administration saying this not about politics. That it is about principle, about the fair administration of justice, and that the administration believing these conversations that prosecutors had in these cases should remain private.

Administration also saying, you have a Republican Congressman calling and somewhat putting pressure on a Republican administration about investigations conducted by the Clinton administration. So another example, administration officials saying, that this is not about politics.

Second potential showdown, that is with the General Accounting Office. That's the investigative arm of the U.S. Congress. Today the deadline for the administration to comply with the GAO's request for information related to meetings and who the administration met with to formulate its energy policy.

The White House saying that it has already responded to these requests, that it is not going to turn over this information, that it doesn't believe the GAO has the statutory authority to get this information. Further, administration officials believing that the White House should be able to have meetings with different groups, and that these people that come into the White House should not have to worry about their identity or any other information getting out to the public.

So the GAO, really -- the next step in its court. It's not commenting today; expected to issue a statement tomorrow. Judy, the next step would be, if the GAO decided, it would have to go to court. A civil suit here in district court in the District of Columbia. We understand the GAO never taken that step before -- Judy.

WOODRUFF: All right. Kelly Wallace following these two stories from the White House. And INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Joining us now: Margaret Carlson of "TIME" magazine, and Tucker Carlson of CNN's "CROSSFIRE." Tucker, to you first. President Fox of Mexico visiting, immigration reform front and center. What's going to happen? Is the administration winning at this point on this issue?

TUCKER CARLSON, "CROSSFIRE" CO-HOST: At this point it is, sure. I mean, Democrats are naturally for some sort of pretty radical immigration. Labor's behind it. The problem, though, Bush hasn't explained why ordinary people ought to be for it with the economic downturn looming -- why people ought to be for this.

And the second problem is if you make this apply to Mexican immigrants, you're going to have to make it apply to all immigrants at some point or else you're going to face charges of favoritism.

WOODRUFF: Margaret, could they get caught on this?

MARGARET CARLSON, "TIME" MAGAZINE: He didn't line up his ducks before announcing the policy. He has to go through -- he has to get Congressional allies. Even President Fox wasn't reading from the script that Bush would like, saying that this is all going to be accomplished by the end of the year.

Now, that was not Bush's schedule, and there are various proposals in Congress that come up with temporary guest workers -- they don't call it amnesty -- as a way of accomplishing this. Some kind of penalty. But the word amnesty hasn't even gone over all that well. This seems like something that was announced to maybe pander to the Hispanic vote without being all the way thought through.

WOODRUFF: So do we just drop it after this week, Tucker?

CARLSON: No, I don't think so. I think this is clearly something that the president believes in and thinks that there is a natural constituency for it. It fits into the larger plan, as Margaret indicated, of wooing Hispanic voters for 2002 and 2004.

I just think that there potentially is going to be more resistance from quarters not anticipated. It's not just the Republican right that's going to get upset if this continues to move forward. And Bush has said no for blanket amnesty, but I agree that it's moving in that direction even if it goes under another name.

WOODRUFF: Very quickly. Stem cell research. We had Tommy Thompson testifying on the Hill yesterday. There are congressional hearings on this. Is the president -- is he dealing with all of these questions about whether there are enough of these stem cell colonies or not, Margaret?

CARLSON: Well, there is fuzzy math going on. The 64 was a magic solution to this problem, which defused the issue for purposes of that speech. But the more you get into it, the less it seems like they are really there. And that legislation -- the idea of having legislation in Congress was defused temporarily, but I think they're going to come back and have it -- the more they find out about the lack of viability of the stem cells.

WOODRUFF: Tucker.

CARLSON: I think -- the political crisis is over. I think that crescendo came and went with Bush's televised address. This is the denouement. I think that you know, it's true that there aren't 64 viable lines, apparently. But those are details that I don't think are going to hurt Bush.

CARLSON: It's surprising, though, how much traction this issue has with ordinary Americans when you go out. That's what people want to talk about. I am not sure that it will -- that it will pass by.

CARLSON: Where are you going, Margaret, that people want to talk about stem cell research? What do you mean, anyway?

CARLSON: All of my vacation spots.

WOODRUFF: Well. Margaret Carlson and Tucker Carlson, we're going to have to leave it there, unfortunately. We are going to see the two of you next week. Thank you very much.

CARLSON: Thanks, Judy.

WOODRUFF: OK. INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: News flash: The governor of Kansas is trying a new role. Bill Graves will appear in a Topeka community theater production of "The Odd Couple" for one night only, tomorrow. He will play Vinnie, who is one of Felix and Oscar's poker pals. Even before the reviews come in, Governor Graves says that cast members have told him not to give up his day job. We're not going to pronounce him not good until we have a chance to see for ourselves. Good luck, Governor Graves. Break a leg!

That's all for this edition of INSIDE POLITICS. But of course, you can go on-line all the time at CNN's allpolitics.com. The 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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