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CNN INSIDE POLITICS

Pearl's Kidnappers Extend Execution Deadline; NRC Warns Nuclear Power Plants to Be on Alert; Florida Voters Concerned About Reno's Health

Aired January 31, 2002 - 16:00   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: We being with the fate of "Wall Street Journal" reporter, Daniel Pearl, whose kidnapers are threatening to kill him. Let's get an update from our State Department correspondent, Andrea Koppel. Hello, Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Hello, Judy. More than a week after 38-year-old Daniel Pearl was kidnapped while on assignment in Karachi, Pakistan, today a third e-mail now from the people who claim to have kidnapped Pearl. In this e-mail there were no additional pictures. There was the text that said, "We give u 1 more day if America will not meet our demands we will kill Daniel. Then this cycle will continue and no American journalist could enter Pakistan."

I'm sure our viewers will remember that yesterday, his kidnapers had given a 24-hour deadline for demands to be met by the U.S. government. Now those demands are still in play, but there's one more day, according to the kidnappers, for the U.S. government to meet these demands -- demands which Secretary Powell this afternoon dismissed, saying that while his heart and concern goes out to the family and friends and colleagues of Daniel Pearl, the U.S. government will not negotiate with these kidnappers.

Now, just a very short time ago, CNN obtained what the "Wall Street Journal" has now sent to those kidnappers. This is a desperate appeal by the managing editor of "The Wall Street Journal" to the kidnappers. In the statement sent to them, it says: "Danny Pearl's wife and I are thankful for the additional time. I also hope that you and we can use that time to start a true dialogue. Journalists are, by definition, trained messengers. Danny can be your messenger. A freed Danny can explain your cause, and your believes, to the world. But a captive or killed Danny cannot speak for you, cannot help you or your cause. Again, please release Danny, or contact us to continue this dialogue."

Clearly, Judy, "The Wall Street Journal" trying to open a private channel of communication with the kidnappers, hoping that this might succeed in getting Danny's release -- Judy.

WOODRUFF: All right, CNN's Andrea Koppel at the State Department. We want to go quickly to a breaking story at this hour. Reports about threats against U.S. nuclear plants. For that, let's go to New York to our Steve Young -- Steve. STEVE YOUNG, CNN CORRESPONDENT: Judy, CNN has obtained today an NRC document, which we know to be authentic, which, in effect, puts on warning all 103 nuclear power plants which operate at 63 locations within the United States. The document obtained from a source and the authenticated someone familiar with is, is captioned "limited distribution, need to know, not for public disclosure." It is dated January 23, 2002.

The content is very somber, so let me read it verbatim. "FBI headquarters has provided the following information to all field offices. During debriefings of an al Qaeda senior operative, he stated there would be a second airline attack in the U.S. The attack was already planned and three individuals were on the ground in the States, recruiting non-Arabs to take part in the attack.

The plan is to fly a commercial aircraft into a nuclear power plant, to be chosen by the team on the ground. The plan included diverting the mission to any tall building if a military aircraft intercepts the plane. No specific timeline or location was given for the attack. As of January 23, one licensee, Columbia Generating Station" -- that is Washington state's only commercial generating plant -- "had been visited. Contacted by their local FBI representative. It is unknown whether NRC licensees will be contacted as well. FBI headquarters cannot at this time provide a complete assessment of the credibility of the information. No additional actions are requested in response to this advisory at this time."

Again, this is not an FBI document. This document in my hand is a NRC document that to went to every U.S. nuclear power plant in the nation. Let me reread that last sentence, Judy. "No additional actions are requested in response to this advisory at this time."

That is particularly rankling to some critics who feel that not enough has been done to secure nuclear power plants, because as we speak, there are no no-fly zones over U.S. nuclear power plants. Both commercial, and the planes that operate by visual flight rules, are asked in official FAA documents to avoid these plants, but they are not specifically ordered. So that is the latest information we have.

WOODRUFF: Steve, what do we know, again, about when these document surfaced and -- I don't mean so much the document that you just read, but the information from al Qaeda -- when it surfaced and also the source of it?

YOUNG: Well, the source apparently was the FBI. It's unclear from the document where the debriefing occurred, when the information reached the FBI. We of course, recall, as you do, that the president in the State of the Union talked about diagrams of nuclear power plants being found in Afghanistan. We know that this document was transmitted to all power plants be -- nuclear power plants in the United States January 23. And it came into our hands about four hours ago.

WOODRUFF: All right. CNN's Steve Young, reporting with this news out of New York. And let's go quickly now to the White House, where our Major Garrett is, with a little more information on this -- Major.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, here in Atlanta, Georgia, I can tell you since the president left Washington traveling, traveling to Winston-Salem, Daytona Beach and here in Atlanta, he has peppered his speech with continuous warnings to the audiences who have listened to him, saying, listen, we in our campaign in Afghanistan, have come across tapes, diaries, documents, that tell us there are more threats coming.

And Andrew Card, the president's chief of staff today, when talking to a couple of reporters, said, yes, what the president said about Iran, Iraq and North Korea is important, putting them on a watch list. But he said the president's No. 1 priority is securing the country. And to that end, the president, in this trip and continuously in the weeks and months ahead, will talk about his homeland security budget, which increases from 19 to almost $40 billion, some of it dedicated entirely to this kind of security.

So it's been a constant theme for the president. The president has spared no voice to let everyone know the threats out there, the threats are real. Al Qaeda is still out there. There are these ticking time bombs, as the president referred to in his State of the Union speech, and it is his No. 1 priority to, as he says, route them out and defeat them before they have a chance to strike again -- Judy.

WOODRUFF: Major, let me now turn you to a very different story. Word coming out of the Bush administration today that it wants to, for purposes of providing government health care support, it wants to classify differently an unborn fetus. Tell us about that.

GARRETT: Well, the Department of Health and Human Services today basically notified states that if they want to, under a program called "State Children's Health Insurance Program," they can classify an unborn fetus as an unborn child, and make that child eligible, through its mother, for prenatal care and delivery care.

Now, the administration describes this as an effort to create maximum flexibilities for states to provide prenatal care to low income mothers who need it. But abortion rights advocates say this is a back door way of creating a federally-recognized definition of a fetus as an unborn child. They say that raises great concerns from their perspective, because it might allow or create a precedent in certain states to criminalize abortion.

The White House and the Department of Health and Human Services say that's not the agenda at all. They simply want to put together a program to provide prenatal and delivery care for low income mothers who need it, and the states would have the flexibility to provide it -- Judy.

WOODRUFF: Major, we know before the president arrived in Atlanta, he was in Florida, he was appearing with his brother, Jeb. Tell us about that.

GARRETT: Well, we were in Volusia County, Florida, and for those of you who were experts and kept your own syllabus about the Florida recount, you'll remember Volusia County's small role in the Florida recount drama. The president was there with his younger brother, Jeb, talking to seniors involved in community service, specifically helping emergency response team, the fire departments deal with emergencies and fires in Volusia County. All part of an elaborate talk around the country to increase community service and volunteerism.

But it was interesting, Judy. You know, the last time I was traveling with the president and we were in Florida, it was September 11th. On that morning, the president went for a jog. He went for a jog this morning. No cameras went with him, but sort of an eerie deja vu feeling fell across most of us who had traveled with the president. Very happy today was uneventful.

WOODRUFF: Does bring back memories. All right, Major Garrett, thank you, from Atlanta. I'll get it right this time. Thanks, Major.

While Jeb Bush was politicking with his brother in Florida, his would-be Democratic opponent, Janet Reno, was leaving a hospital in New York state. The former U.S. attorney general fainted during a speech in Rochester last night. CNN's Mark Potter has more on Reno's health and the Florida governor's race.

(BEGIN VIDEOTAPE)

MARK POTTER, CNN CORRESPONDENT (voice-over): Janet Reno had been speaking for about 45 minutes at the University of Rochester, when she told the audience she needed to sit down.

After collapsing and being attended to on stage, she was taken to a hospital. Released in the morning, Reno insisted she is still running for governor of Florida, and said she simply fainted.

JANET RENO, FORMER ATTORNEY GENERAL: I got hot, about when I started speaking, because it was hot up on that corner of the stage. And I just got progressively hotter, and then said, "I have to sit down," and I exited gracefully, or ungracefully -- I don't know how it looked.

POTTER: At an investment conference near Miami, Florida Governor Jeb Bush wished his potential Democratic opponent well.

GOV. JEB BUSH (R), FLORIDA: People get tired or collapse all the time. I pointed out that my brother most recently had an incident where he passed out. My dad, if you remember, passed out and did one other thing to the poor prime minister of Japan. And I can guarantee you that both George Bushes are in excellent shape. So I wish her well.

YOUNG: But, Jim Kane, of "The Florida Voter," a political polling company, says because Janet Reno suffers from Parkinson's Disease, a neurological ailment, her collapse in New York could become a campaign issue.

JIM KANE, "THE FLORIDA VOTER": She now needs to address it, and if she doesn't do it quickly, it will be the drip, drip, drip, drip that she doesn't want. And she'll be focusing on defending her medical history.

YOUNG: While Reno is still the clear front-runner for the Democratic nomination, her campaign has suffered a setback. The powerful Florida education association recently endorsed one of her Democratic opponents, attorney Bill McBride.

BILL MCBRIDE (D), FLORIDA GOV. CANDIDATE: They decided that I was the person that most clearly reflected what they think is the right agenda for Florida.

YOUNG: The Florida AFL-CIO executive committee also supports McBride over Reno, although the actual endorsement will be made by delegates at the union convention in March.

(on camera): And adding even more to Reno's troubles: a recent Mason-Dixon poll showing Jeb Bush's approval rating of 58 percent is on the rise.

Mark Potter, CNN, Miami.

(END VIDEOTAPE)

WOODRUFF: Joining us now, Tom Fiedler of "The Miami Herald." Tom, first of all, has up until now, Janet Reno's health been a factor in this race?

TOM FIEDLER, "THE MIAMI HERALD": No, it hasn't been a direct factor. Obviously, when she travels the state, the audiences who see her personally are aware that she has Parkinson's and she has a tremor in her hands, which she makes no effort to disguise. But it hasn't been the kind of thing where she has had to answer questions from the news media on regular basis. I think this changes all of that.

WOODRUFF: So you think it's going to become an issue now?

FIEDLER: I think there's no doubt, at least for the next several days, it will become a significant issue that she has to deal with. When she arrives here in Miami this afternoon, that will the question that the local media will have on their minds. And as we saw in March, even Governor Bush is asked about that question.

So it's going to have a run in the news media over the next several days, and I think it will increase the calls for her to release her medical records. And it will also, I think, to some extent, embolden those critics within the Democratic Party to suggest that she should consider stepping aside.

WOODRUFF: Where does she stand right now, Tom, vis-a-vis the other Democrats in the race, including Mr. McBride?

FIEDLER: Well, there is no question that she still is the giant in this race. Her name recognition alone gives her a huge advantage. When she travels the state, she is still regarded as a star, a crowd gatherer. The most recent polls -- in fact, we have a poll in the morning going -- obviously done before this incident, but it would show her picking up just about 60 percent of the Democratic primary vote to Bill McBride, her closest challenger, is 13 percent. So she is the dominant person in the race, and I think it would take something of significant magnitude here, and probably related to her health, to cause that gap to completely disappear.

WOODRUFF: Mark Potter pointed out in his report that Governor Bush right now at 58 percent approval. That's pretty high, but his brother, the president, at 80 percent. Are there going to be more coattails there, or what do you think is going to happen?

FIEDLER: Well, I think -- coattails are a difficult thing to measure. What is interesting about that is that we now have a situation where President Bush comes into Florida with his 80 percent approval rating, providing I think a positive glow for his brother to bask in. And that's a reversal between the two of them from where the situation was prior to the 2000 presidential election, where it was Jeb Bush's popularity that provided a bit of a pull for his brother.

So I think that's an interesting thing to watch. It sure doesn't hurt Jeb, particularly in a week where he has had some rough news, to have his brother come in and for people to be reminded that Jeb is part of a family that is extremely popular in Florida and across the country.

WOODRUFF: And speaking of his brother, the president, he has just arrived back here in Washington. You saw him just getting off Air Force One, arriving there at Andrews Air Force Base, heading over to Marine One to go back to the White House.

Tom Fiedler with the "Miami Herald," thank you very much.

FIEDLER: Always a pleasure, Judy.

WOODRUFF: Thank you very much.

Well, he is a top Senate Democrat, and a top Republican target. Coming up next, the political hits after the hugs. Tom Daschle talks to me about his areas of conflict with the president.

Football fans take note: Our Jeff Greenfield says your Super Bowl picks say a lot about your politics.

And our Subway Series returns with Senator John McCain, on a roll about Enron and campaign finance reform. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

"On the Record" today: Senate Majority Leader Tom Daschle. Earlier, he and I discussed the difficulty of pursuing the Democratic agenda against such a popular president. Before we get to that, a quick look at some of the political pressures facing Senator Daschle, from CNN correspondent -- congressional correspondent Jonathan Karl.

(BEGIN VIDEOTAPE)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: We are going to work together... JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Tom Daschle is so soft spoken he seems to have a genetic inability to raise his voice. But Republicans say, don't be fooled.

SEN. RICK SANTORUM (R), PENNSYLVANIA: That's part of Tom Daschle, but it's a very small part. The biggest part of Tom Daschle is a partisan Democrat, liberal obstructionist of national security issues like energy, and of economic security issues like tax reductions to create jobs.

KARL: Republicans have Daschle in the crosshairs, a strategy articulated in a memo by GOP pollster Frank Luntz. "Remember what Democrats did to Gingrich?" Luntz wrote. "We need to do exactly the same thing to Daschle."

What Democrats did was depict then-Speaker Newt Gingrich as a cold hearted, two-headed monster named Dole-Gingrich. Even before the Luntz memo, the first swipe came from the vice president himself, who branded Daschle "an obstructionist" on NBC's "Meet the Press." Independent conservative groups have gotten into the bash Daschle game too. There is a "Dump Daschle" Web site, and of course TV ads.

(BEGIN VIDEO CLIP)

NARRATOR: One man stands in the way, Tom Daschle. On tax cuts, Daschle said no. On economic stimulus, Daschle said no.

(END VIDEO CLIP)

KARL: The attacks have stung so much that Daschle has felt the need to respond.

(BEGIN VIDEO CLIP)

NARRATOR: You have seen the ads attacking Tom Daschle, but what's the real story?

(END VIDEO CLIP)

KARL: For Daschle, the real story is President Bush has failed to deliver on one of his most oft repeated promises.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to change the tone in Washington.

(END VIDEO CLIP)

KARL (on camera): Republican strategists say they don't expect Daschle to be much of a factor in any election this year, except for the one in his own backyard, where South Dakota's junior senator Tim Johnson is locked in what may be the year's most hotly contested Senate race against Republican challenger John Thune.

Jonathan Karl, CNN, Capitol Hill. (END VIDEOTAPE)

WOODRUFF: I visited Senator Daschle in his office today, and while he didn't want to say it on camera, Daschle said he's been told that some of the campaign against him in South Dakota was directed by the White House. Personal politics aside, this is certainly a challenging time for the Democratic leader.

(BEGIN VIDEOTAPE)

WOODRUFF: Senator Daschle, thank you very much for being with us.

DASCHLE: My pleasure.

WOODRUFF: This is the week the president gave his State of the Union address. Very well received, most Americans said they thought he did a good job. His popularity is sky high. Is this turning out to be a bad year to be the leader of the Democratic Party in the Senate?

DASCHLE: Not really. It's a good year to be -- the leader, any time you can be leader. There's a tremendous opportunity. Obviously, the challenges are different, but this is a good time. Our caucus is united. We feel good about what we need to do. We want to work with the president where we agree with him. But just because he's popular doesn't mean we don't disagree, and shouldn't take those disagreements to the Senate floor, in an agreeable way.

WOODRUFF: Doesn't it make it a lot harder, given his popularity, waging of the war, and now, again, the State of the Union, he's carrying it forward, talking about where we go next. Even on domestic issues, people are approving, for the most part. Doesn't that make it really hard for you and other Democrats to get your message out there?

DASCHLE: Well, it does make it difficult. The president has a tremendous megaphone, and we saw it this week. But I think we still have a job to do. I think the American people expect in our political system that checks and balances be in place, that we put the brakes on in those occasions when things aren't as they should be.

We have alternative approaches to different goals in many cases, but the goals in most cases are the same. We want to strengthen the economy. We want to build homeland defense. We want to defeat terrorism. So, there are ways in which to work together. There are also ways that even though we want to accomplish the same goal, we take different approaches, and we want to articulate those.

WOODRUFF: On top of everything else, we now learn that the economy may be coming out of recession much sooner than anybody expected. People out there are saying, well, this takes an issue away from the Democrats. They were hoping to go after the president on this. You in fact criticized the president's tax cuts just a few weeks ago. You made a major speech in which you said that the tax cuts had made the recession worse. Do you regret saying that now? DASCHLE: Not at all. I think that obviously the tax cuts were ill advised. I believe that they ought to be examined from a historical perspective as to what has created the deficit, and clearly I think that's what has happened. In large measure, the tax cuts has created the deficit that we are going to be facing for years to come.

But it's good news. It's good news that the recession has ended, if it has. It's good news that the economy is getting stronger. We are not looking for ways to take issue with the president. There are plenty of them out there -- the privatization of Social Security, the prescription drug benefit that he has proposed, a number of things on the domestic front that we think are very important. But clearly, if the economy is getting better, that's great.

WOODRUFF: Divisions, though, among Democrats about whether to support or question the president's tax cuts. Do you feel in any way you have undercut some of your fellow Democrats who are running for reelection in November who are with the president on the tax cuts?

DASCHLE: Not at all. In fact, I have spoken to every one of them, and I have indicated to them and they have acknowledged that obviously they supported tax cuts at a time when they felt it was necessary. They weren't given any choice at the end, they either had to vote for it or against it. I voted against it, and most of my colleagues did.

I recognize our differences in that regard, but this wasn't directed toward them. They weren't the ones to propose the tax cut of the magnitude that was proposed last year, and I don't think they should be the ones held accountable. It was the president who did it, and clearly that's something we will continue to debate in months and years ahead.

WOODRUFF: Based on what you have seen of the budget coming out of this administration, do you like what you see?

DASCHLE: Well, we haven't seen enough yet. I think that there are some things I do like. I think the commitment to education apparently is going to be a good one. The commitment to defense -- obviously, as we try to ensure that we have the resources necessary to continue the war on terrorism. The commitment to homeland security is also something we support.

We need to get into the details, and of course we need to know just how bad is the deficit. When we recognize that we have got to borrow Social Security and Medicare trust funds to pay for a lot of the things the president is proposing, it puts it in a new light. We are going to have to look at it very carefully.

WOODRUFF: You use the term "Enron-izing," accusing the administration of "Enron-izing" the economy, "Enron-izing" Social Security. Did you go too far with that? Now the Republicans are jumping all over you and other Democrats, saying you are politicizing this whole thing.

DASCHLE: We have no desire to politicize the debate. But I will say that any time you jeopardize the retirement security of all the American people, you are coming close to what happened with Enron.

I have talked to Enron employees, and to see theirs faces and to see the damage done to these people by totally eliminating not only their livelihood but their life savings is a tragedy. I don't want to see that same thing happen to the American people, but we get perilously close when we tap in with unabated vigor the Social Security and Medicare trust funds, as this administration appears to be doing.

WOODRUFF: "The axis of evil." The president talked about Iran, Iraq, North Korea. Are you prepared to support the administration, no matter what they do, even if it's a preemptory, preventive action against one of these countries?

DASCHLE: Not at all. I think that one roles of Congress is to ensure that, after being consulted, we help make decisions with regard to our foreign policy and the approach we take in situations like this.

The war powers clause, or the act, the Constitution itself directs us and the administration to consult with each other. But I think the president is right to cite these three countries. The president is right to put them on notice. And I think the American people would be right to commit to whatever resources and effort it takes to ensure that we -- that we make this country safer from the extraordinary damage that could be done if this goes unattended.

WOODRUFF: Last, Senator, politics, your own state of South Dakota, the Republicans are coming after you big time. They are running -- even though you are not up for reelection this year, they are running ads against you. Your state assembly, state legislature, has passed a law saying, if you are in the Senate you can't run for president, language to that effect.

Are they trying to -- do they worry about you as a major threat in 2004? Is that what is going on?

DASCHLE: That's a good question, Judy. I really don't know what is going on. But, you know, just have to do what you have got to do. I enjoy my work. I'm proud to be the senator from South Dakota. I love being leader. And I have got the opportunity to work with some terrific people.

Some of this just comes with the territory. I think it's unfortunate. The president talked about changing the tone. I'm not sure that has happened. But, nonetheless, I think that, all things considered, I have no regrets. I like what I'm doing.

WOODRUFF: Senator Tom Daschle, thanks very much.

DASCHLE: My pleasure.

(END VIDEOTAPE)

WOODRUFF: And, as we said, Senator Daschle added that he thinks some of the campaign against him in South Dakota has come out of the White House. He also told me that he thinks, as of now, Democrats have just a 50/50 chance of hanging on to majority control in the Senate. We will see.

Some of stories making headlines in "Campaign News Daily": Al Gore's Political Action Committee is up and running. As we first reported yesterday, Leadership '02 will raise money for Democratic candidates nationwide. In a statement, Gore said he is looking forward to helping Democrats in -- quote -- "this critical election year."

Florida Secretary of State Katherine Harris is among the speakers at the annual Washington gathering of political conservatives. Others addressing the three day CPAC Conference include National Security Adviser Condoleezza Rice, radio host Dr. Laura Schlessinger, and Health and Human Services Secretary Tommy Thompson.

Vermont's independent Senator and former Republican James Jeffords plans to campaign for Democrats. CNN Capitol Hill producer Dana Bash (ph) has learned that Jeffords will campaign for incumbent Democratic senators, but he won't lend a hand to Democratic challengers facing Republican incumbents.

The "Inside Buzz" from Bob Novak after a short break. Plus, Jonathan Karl takes a ride with Senator John McCain to talk about the politics of Enron and campaign finance reform.

(COMMERCIAL BREAK)

WOODRUFF: Time now for the "Inside Buzz" from political analyst Bob Novak of "The Chicago-Sun Times."

I spoke with Bob just a little while ago. And I started by asking him what he knew about the legal showdown between the GAO and the White House over energy records.

(BEGIN VIDEOTAPE)

ROBERT NOVAK, CNN POLITICAL ANALYST: The buzz around town, Judy, as I think you are well aware is, that Dick Cheney, the vice president, was adamant that he wouldn't give up the information about his energy task force.

But the White House aides are very, very energetic in putting out the word that it's the president's decision. He is the one who was very hot in not diminishing the power of the presidency. It's George Bush who is doing it -- they are saying -- not Dick Cheney.

WOODRUFF: He's not the first president to make that argument either.

Republicans, they are not in Washington. They are off at this retreat. What is going on there?

NOVAK: About half the members of the House and Senate, Republican members of the House and Senate, took special trains to the Greenbrier in White Sulphur Springs, a very swanky resort. But what's interesting is who went with them: lobbyists and lots of them. The place, Greenbrier, was swarming with lobbyists. They couldn't go into the private meetings, but they could have dinner. They could have lunch which the senators and congressmen, write back to their clients, "Guess what we saw?" But they kicked them all out at 11:00 this morning, had them go back to Washington. But what a strange combination.

WOODRUFF: But they can tell their clients, "I had dinner with so and so."

NOVAK: Absolutely, at the Greenbrier.

WOODRUFF: Now, the Senate Democratic leader, Mr. Daschle, majority leader, wasn't around at a very important dinner the other night.

NOVAK: Last Saturday night -- we talked about it on Monday -- was the Alfalfa Club dinner, very exclusive, black-tie. Very few Democrats ever get invited. But the senator majority leader, Tom Daschle, was to be inducted.

And guess what? He didn't show up. Everything said, "Where is Tom Daschle?" He was in Naples, Florida at a Senate Democratic campaign fund-raiser. And what I love is, he stayed the night at the home, the palatial home of Jack Kelly, who's a lobbyist for US West, BMW, and a lot of big companies. Only a lobbyist, I think, could keep somebody from being inducted into the Alfalfa Club.

WOODRUFF: This was a fund-raiser for Daschle or for Democrats?

NOVAK: For the Senate Democratic Campaign Committee.

WOODRUFF: OK.

(END VIDEOTAPE)

WOODRUFF: And that was Bob Novak just a few minutes ago.

Judging by the new Federal Election Commission reports, challengers in some of the top Senate races this year are giving the incumbents a run for their money. In South Dakota, incumbent Democratic Senator Tim Johnson had $1.7 million in the bank as of the end of last year. His Republican challenger, Congressman John Thune, had $1 million.

In Missouri's special election, Democratic Senator Jean Carnahan, who now holds her late husband's seat, had $2.8 million cash on hand. Former Republican Congressman Jim Talent had $1.3 million. In Minnesota, incumbent Democratic Senator Paul Wellstone had $2.1 million as of the end of the year. The Republican former mayor of St. Paul, Norm Coleman, had $1.4 million.

And, in North Carolina's open seat, top GOP candidate Elizabeth Dole had $2.5 million in the bank. The top Democrat, former White House Chief of Staff Erskine Bowles, had $1.5 million. Well, Arizona Senator John McCain does not have an election to worry about this year. And for now, he's more concerned about cutting campaign money -- cutting it -- than he is raising it. McCain should get a vote on campaign finance reform in the House soon. House Speaker Dennis Hastert tells our Kate Snow that he wants a quick vote on the issue so that this doesn't -- in his words, "isn't hanging over us."

Well, McCain himself is feeling pretty optimistic.

CNN congressional correspondent Jonathan Karl caught up with the senator on the Capitol Subway to talk about campaign finance and the looming battle between the White House and the GAO.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN (R), ARIZONA: Well, it's nice to be on the subway with you, Jon. It's not exactly the Straight Talk Express, but it's...

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: But it's close enough.

The Government Accounting Office is going to go forward with their lawsuit against the White House.

MCCAIN: Yes.

KARL: What is your take on that?

MCCAIN: I understand why the White House would be reluctant to give out information that is basically, in their view -- and I think to some degree correct -- privilege. But we are in a scandal. And I think that they are going to have to, sooner or later, under either in the face of a lawsuit or public pressure, give up these documents.

KARL: So you would certainly advise the vice president to turn it over?

MCCAIN: Well, having been involved in a major scandal and observing a number of others in this town, it's all going to come out. That's one the of lessons. And I have always felt that the best way to handle is get it all out. And then, the sooner everything is revealed, then people make judgments and you move on.

KARL: I remember one of your lines, a big applause during the campaign, the heat of the campaign, of George Bush: "If he is a reformer, than I'm an astronaut."

(LAUGHTER)

KARL: So my question to you: Are you planning any trips to outer space soon, or do you think George Bush is going to work to defeat campaign finance reform?

MCCAIN: I am of the impression that President Bush would sign a bill. I think that Enron -- as I have also predicted that there would be more scandals because there is so much money. So I think and hope the president will sign a bill passed through the House and Senate.

KARL: A company like Enron would still be able to give money to all those members of Congress, except they would actually give more because the hard money limit would be raised? A company like Enron still has a lot of influence.

MCCAIN: I think companies and corporations will still have some influence. But the whole key to this thing was their ability to get huge amounts of soft money.

If you squeeze it down to individual contributions, then their ability to gain this access is dramatically reduced. You will never eliminate money from American politics. But in the 1980s, before there was soft money, when I was first running, it was dramatically different.

KARL: Now, another big issue for you was the issue of some kind of an inquiry into what went wrong on September 11, how America was caught by surprise. The vice president and the president have been telling people up here that they don't want that. Leave the investigation for the Intelligence Committee. Keep most of it closed, is their message.

MCCAIN: Well, the reason why I disagree with that is that I think that everybody realizes it was not just simply an intelligence failure. It was diplomatic. It was economic. It was a whole lot of areas where we failed that caused 9/11. And unless we are able to fully know what caused it, then we are not going to have confidence that we have taken whatever steps we need to to fix it.

KARL: Well, senator, thanks for taking a ride on the Straight Talk -- what is this -- Subway?

MCCAIN: The Straight Talk Subway?

KARL: Thank you.

MCCAIN: Thanks.

(END VIDEOTAPE)

WOODRUFF: We'll call it Straight Talk Subway.

Well, time now to step back from the sometimes bare-knuckle politics of Washington to a much bigger battle scheduled for this weekend.

More from senior analyst Jeff Greenfield of CNN's "GREENFIELD AT LARGE."

JEFF GREENFIELD, CNN SR. ANALYST: Judy, today, I am going to put aside trivial matters, war and peace, prosperity and recession, justice and security, and turn to a matter of genuine significance: Who should a politically committed American, liberal or conservative, root for on Sunday?

It's easy if you are from St. Louis or New England, but what about the rest of us?

(BEGIN VIDEOTAPE)

(voice-over): Now, if the Washington Redskins are playing, it's easy. Everybody roots against them, liberals or conservatives. Washington is the city where big shots write tax laws to help the rich and where bureaucrats write intrusive federal rules.

And it's still OK to root against a New York team. It's the money, and fashion, and media capital, three things that cause teeth- gnashing among millions. And it was OK to root against Los Angeles. That is where Hollywood's trash and flash lives. And its warm weather inflames jealously among the shivering middle Americans. But, of course, Los Angeles doesn't have a pro football team anymore.

And it would be great for liberals if Houston were playing: oil billionaires, polluters, Enron. But Houston doesn't have a team right now. You'll have to wait until next year.

Two years ago, the Super Bowl was a microcosm of the Democratic primary battle. The St. Louis Rams, from the home state of Bill Bradley, narrowly defeated the Titans of Al Gore's home state of Tennessee, not exactly an accurate preview of the primaries.

Now, what about Sunday? This is an easy call. New England plays in Massachusetts, the home of Ted Kennedy, Barney Frank, the only state that voted for George McGovern back in 1972. And they're playing against Missouri, the home state of one of today's conservative heroes, Attorney General John Ashcroft.

(END VIDEOTAPE)

GREENFIELD: So there you have it. If you are on the left, you've got to root for the New England Patriots. If you are on the right, you've got to root for the Rams. No, don't thank me. Just acknowledge this is the kind of political analysis you can't get anywhere else --- thank God -- Judy.

(LAUGHTER)

WOODRUFF: Jeff, I'm calling you up after the show, because I know conservatives who are for the Patriots and liberals who are for the Rams. But we can talk about it later.

GREENFIELD: Well, they're confused. They're confused.

(LAUGHTER)

WOODRUFF: OK. Jeff Greenfield, thanks.

A check of the INSIDE POLITICS "Newscycle" when we return, including the latest on potential terror threats against U.S. targets.

(COMMERCIAL BREAK)

WOODRUFF: Checking the stories in our "Newscycle": Former Attorney General Janet Reno was released from a New York hospital today after she fainted last night while delivering a speech. Reno says today she feels fine and does not expect the incident will affect her campaign for governor of Florida.

Sources tell CNN documents found in caves and safe houses in Afghanistan suggest al Qaeda operatives targeted landmarks, including the Seattle Space Needle and nuclear power plants, inside the United States.

The group claiming to have kidnapped "Wall Street Journal" reporter Daniel Pearl has extended the deadlines for it demands to be met. Yesterday, the captors said Pearl would be killed within 24 hours. But earlier today, an e-mail states that deadline has been extended by one day. This afternoon, "The Wall Street Journal" released an e-mail to the captors pleading for Pearl's release.

Well, sad to say, the United States has a good deal of experience dealing with hostage sagas. The question: Is this one any different?

Here now our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Judy, terrorists believe that by taking an American hostage, they can make the United States look helpless and the president look ineffectual. But that may not be the case anymore. Things have changed.

(BEGIN VIDEOTAPE)

(voice-over): For more than a year, President Carter's administration was immobilized by the hostage crisis in Iran: America held hostage. When a TWA flight was hijacked in Beirut, President Reagan tried to downplay the issue. His administration would not be held hostage. But he got tangled up in the charge that he violated his own principles in the Iran-Contra deal.

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: We did not, repeat, did not trade weapons or anything else for hostages.

(END VIDEO CLIP)

SCHNEIDER: Hostage crises have always made the U.S. seem powerless because two conflicting values are at stake. On the one hand, Americans have always endorsed the principle of no negotiations with terrorists. But that's an abstract principle.

Is it more important than saving innocent lives? In 1985, when American lives were on the line, the public felt, by better than 2-1, that saving the lives of hostages is more important than protecting broader national interests. Its seems different now with the kidnapping of American journalist Daniel Pearl by Pakistani militants. This hostage crisis has not immobilized the Bush administration. The media have not sensationalized the issue, nor has his family.

MARIANNE PEARL, WIFE OF DANIEL PEARL: But I have hope. I am not desperate.

SCHNEIDER: There is sense of resolve in the country, expressed by a former hostage.

TERRY ANDERSON, FORMER HOSTAGE: Nobody has the power to change U.S. policy in this case or in any other case.

SCHNEIDER: What has changed? The U.S. has been attacked. Terrorists threaten ordinary Americans here at home. If Americans are more resolute about hostage-takers now, it's because they have learned something about the world.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have come to know truths that we will never question: Evil is real and it must be opposed.

(END VIDEOTAPE)

SCHNEIDER: That doesn't mean Americans have become more callous about the fate of hostages. It means that they see the bigger picture. If you give in to terrorists' demands, everyone's life is put at risk -- Judy.

WOODRUFF: Something we need to remember. Bill Schneider, thanks very much.

SCHNEIDER: Sure.

A legendary cartoonist's surprising legacy -- that story next on INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Well, you might think his cartoons were legacy enough, but it turns on the late Herb Block left something behind that was even more, much more.

Here now our national correspondent Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Herbert Block, the longtime "Washington Post" cartoonist who died last year at 91, was a gentle man who loved his work.

HERBERT BLOCK, CARTOONIST: It's a great line of work to be in. You get to say what you think. You get to use your hands, draw it up. It's fun.

MORTON: He drew all the presidents, won all the prizes. This is President Clinton giving him the Medal of Freedom. But what nobody knew was that he was also a multimillionaire. FRANK SWOBODA, HERB BLOCK FOUNDATION: You wouldn't know he had a nickel. He wore the same sort of appropriately shabby clothes. He was not a snappy dresser. But he was a man of great generosity.

MORTON: Swoboda, a "Washington Post" colleague, will be leaving the paper to become president of the board of the Herb Block Foundation. Block left about $50 million. And the foundation gets his cartoons, too. What will the foundation do? What did his cartoons do?

BLOCK: Sometimes, what you do in a cartoon is something you think needs to be said that everybody else is not saying.

MORTON: The foundation will encourage political cartooning, maybe offer a prize. It may contribute to existing charities. But its main purpose?

SWOBODA: What he really wanted to do was give scholarships, full-freight scholarships for disadvantaged youth.

MORTON: Scholarships, help for kids who need help. Sounds like Herb Block, all right.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Herb Block, an extraordinary talent.

Every Thursday on INSIDE POLITICS, we plan to read some of many viewer e-mails.

On the Enron controversy, Dan Leahy of Santa Barbara, California, writes: "This story is not about Democrats politicizing it no matter how often Mary Matalin says it is. I don't hear Democrats politicizing it. I only hear Republicans accusing them of doing so."

Jay of Tucson, Arizona says: "It is mind-boggling how the Enron collapse is being treated by much of the press, with a 'Let's wait and see if any criminal activity surfaces.' This is not a little story waiting for an insider to spill the beans. The beans are spilled."

And our thanks to Kyle Kennett of Rockford, Michigan for this e- mail. He says: I teach American government to twelfth-graders. And we're all excited that INSIDE POLITICS is making its return. Thanks for devoting a show to D.C. politics that allows a novice to get excited about daily political news.'

And we thank you very much for those comments, Mr. Kennett. Whether it's good or bad, we want to know what you think. Keep those e-mails coming through our Web site at CNN.com/INSIDEPOLITICS.

Coming up: a preview of what is in the work for tomorrow's INSIDE POLITICS.

(COMMERCIAL BREAK) (INTERRUPTED FOR CNN COVERAGE OF LIVE EVENT)

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