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Security Tightens for Winter Olympics; Congress to Vote on Campaign Finance Reform

Aired February 8, 2002 - 16:00   ET


JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington. New tests today of airline security, before the kickoff of the Olympic Games.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: I'm Kelly Wallace at the White House. President Bush is in Salt Lake City, where he's mindful of security as he prepares to meet with Olympic athletes.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow on Capitol Hill. Supporters of campaign finance reform consider a key change before the vote in the House next week.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider in Washington, with billions of reasons for awarding the political play of the week.


WOODRUFF: Thank you for joining us. Just hours before the Winter Olympics open in Salt Lake City, security is uppermost in the minds of many people in this country and around the world. Particularly after U.S. official have acknowledged that the Games could be a target of terrorists.

Adding to the jitters, an Atlantic coast airlines flight from Indianapolis to New York was diverted to Cleveland today, after a passenger lit a cigarette, acted strangely and talked about the September 11th attacks. He was taken into custody.

And in Atlanta, a bomb threat was called in against a Delta flight preparing to leave for Boston this morning. No bomb was found. These incidents come after fellow passengers say that a man tried to force his way into the cockpit on a flight from Florida to Argentina yesterday. CNN's Mark Potter is in Miami, where the suspect appeared in court a short time ago. Hello, Mark.

MARK POTTER, CNN CORRESPONDENT: Hello, Judy. Yes, he did. He appeared in the courthouse behind me, the Miami federal courthouse, for his initial appearance. That's 29-year-old Pablo Moreira. That appearance only lasted about five minutes. He appeared before magistrate Peter Palermo, who read the charge against him, which is interfering with a flight crew. It's a very serious charge, and it carries a maximum penalty of 20 years in prison.

Now, Moreira is currently being held without bond. There will be another hearing on Tuesday to see if that continues. The U.S. attorney's office is recommending that he stay in prison until his trial, on the grounds that this man from Uruguay is a flight risk, and also a danger to the community.

Now, he was represented by two attorneys, two former prosecutors, who issued a statement saying that Moreira is now a terrorist, and is not associated with any terrorist organization. but they did not explain why he kicked in the bottom of a cockpit door of the flight from Miami to Buenos Aires early yesterday morning.

The U.S. attorney here, Guy Lewis, said this was a very serious and frightening incident. And he said he was particularly concerned about a statement Moreira allegedly made, after he was subdued on the plane. Moreira was reported to have said, "I wanted to destroy everything." And the U.S. attorney also said that anyone else considering an action like this on a flight would be dealt with very seriously by U.S. prosecutors -- Judy.

WOODRUFF: All right, Mark Potter, we take it seriously when someone tries to kick in the cockpit door.

Well, after that break-in, Homeland Security Chief Tom Ridge says the United States still is not where it needs to be in terms of airline security. But Ridge tells CNN's "NOVAK, HUNT AND SHIELDS" he still doesn't believe that pilots should be armed. As for the security of the Olympic Games, Ridge says authorities will focus most on the skies.


TOM RIDGE, HOMELAND SECURITY DIRECTOR: There have been some additional personnel, some additional security, obviously. Not only at venues, but outside in some of the public arenas. But primarily, it had to deal with the potential of an aviation problem. And that's where they have concentrated.


WOODRUFF: Among those being asked today about Olympic security, President Bush, who now he is the ground in Salt Lake City. Our Kelly Wallace is at the White House. Hello again, Kelly.

WALLACE: Hello to you, Judy. Well, before the president left here from the White House early this morning, he was asked by a reporter if he believes the Winter Games will be safe. He responded, yes. And a short time ago, as he was touring the Mormon Temple in Salt Lake City, he was once again asked about the security situation. He said he is so confident about the security situation that he's decided to go and visit at the Olympics.

The president also though, saying it will be a very emotional event tonight. He said that U.S., of course, hosting these games. He said the United States, still a nation under attack. Little bit later this evening, the president will be meeting with U.S. athletes. Also on hand will be officers representing the Port Authority of New York and New Jersey. You see the president and the first lady, arriving in Salt Lake City earlier this afternoon.

The president is expected to talk about how the Olympics represent an opportunity to celebrate peace and freedom, since the September 11th attacks. He is expected to salute the heroism of those who responded and tried to help on September 11th. And also, to salute the heroism of athletes -- athletes who have overcome a number of obstacles and odds to get to the Olympic Games.

So the president definitely mindful of security, but also saying this will be a magnificent moment for the country and the world, later tonight -- Judy.

WOODRUFF: Kelly Wallace at the White House.

Over the years, a number of presidents have tried to use the Olympics as a platform. Our senior political analyst Bill Schneider is here to tell us how they did, how they scored -- Bill.

SCHNEIDER: You know, presidents have often used the Olympics to make a political statement. But they cannot be too obvious about it, because politics is dirty, and sports are clean. So we're told.


ANNOUNCER: This impossible dream comes true!

SCHNEIDER (voice-over): At the 1980 Winter Games, the U.S. hockey team's surprise victory over the Soviets rallied a demoralized nation. President Carter staged a he celebration at the White House. Even hopeless causes might be won.

Later that year, President Carter ordered U.S. athletes to boycott the Summer Games in Moscow.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: The Soviet Union sought to enjoy both the fruits of aggression in Afghanistan, and the prestige and the propaganda value of being the host of the Olympics at the same time.

SCHNEIDER: The president made a statement, but he also forfeited any chance he might have to cast an Olympic glow over his reelection campaign that year.

UNIDENTIFIED MALE: Up, and down. Up.

SCHNEIDER: Ronald Reagan didn't miss that chance when he ran for reelection in 1984. The Soviets boycotted the Games in Los Angeles that year, but President Reagan didn't fret. It just meant more medals for the U.S.

1996 was a big year for women Olympic athletes -- something President Clinton did not fail to notice. WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: The United States Congress passed something called title 9, which made it possible for a lot of the women athletes to be here today.

SCHNEIDER: This year's Winter Games in Salt Lake City, coming just five months after the September 11th attacks, give President Bush a chance to showcase American strength and resilience.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The participation in the torch relay represents the strength shown by so many families after September the 11th.

SCHNEIDER: And something else.

RIDGE: It's a worldwide stage. We project a very open forum, but a very safe forum as well.

SCHNEIDER: The administration hopes to use the Olympics to telegraph the message: America is secure. The government will protect you.

DONALD RUMSFELD, SECRETARY OF DEFENSE: We literally have more people in the area around Salt Lake City for the Olympics than we do in Afghanistan.


SCHNEIDER: The risk is that there will be another incident like the still-unsolved bombing at the Atlanta Games. That kind of tragedy would have far greater repercussions this time than ti did six years ago -- Judy.

WOODRUFF: More reason for all the security.

SCHNEIDER: Absolutely.

WOODRUFF: Bill, we'll see you later on the program.

SCHNEIDER: That's right.

WOODRUFF: U.S. officials and Olympic organizers would no doubt argue that the Games are nonpolitical. But is there any correlation between Americans' views of the Olympics, and politics? A new Gallup Poll showed more moderates plan to watch a great deal or a fair amount of the Winter Games than conservatives. And more conservatives expect to watch than liberals.

Breaking it down another way, fans of President Bush's job performance appear to be fans of the Olympics in greater numbers, than those who disapprove of Mr. Bush's presidency. In a few days, we'll tell you what all that means.

On the record and on the subway. Coming up next, Senator Mitch McConnell on campaign finance reform. Next week's vote, and whether a political train wreck will follow.

From the left and the right, Donna Brazile and Bay Buchanan will mix it up on the big political stories. And later...


UNIDENTIFIED MALE: I don't feed to you the high moral ground of not knowing what life is like in the ditch.


WOODRUFF: The inside buzz on that angry face-off between the Treasury secretary and the senator. This is INSIDE POLITICS.


WOODRUFF: "On the Record" this Friday, campaign finance reform. Enron's spectacular collapse focused attention on the company's sizable political donations and gave new life to the legislative debate. In just a moment. a conversation with Senator Mitch McConnell, of course, the leading opponent of the current bill. But first, an update on the status of the legislation from CNN's congressional correspondent, Kate Snow.

Kate, what about this idea that supporters of campaign finance reform are going to try to change the date that the reforms would go into effect?

SNOW: All of the sponsors will tell you, Judy, that they don't want to do that. They'd rather have it be effective right away. But I've been talking to folks all day today, and I'm told that there is serious debate underway within that coalition of sponsors of campaign finance reform. And one aide puts it, there is serious consideration being given to changing that date. They probably will change that date, this aide says, to be effective later, probably the day after the general election. That's because, of course, as one election wraps up, the next campaign finance round is already starting -- Judy.

WOODRUFF: Kate, in the run-up to these votes next week, tell us about what both sides are doing?

SNOW: It's a madhouse around here on that front. The Democrats -- about a half-dozen Democrats, I'm told, are considered to be up in the air. These are members of the Congressional black caucus, and they are the real target right now. Mr. Gephardt, the House minority leader, had been meeting one on one with some of them, making some phone calls. And I'm told that many of them are asking for assurances that they will get cash, that they will get money for their campaigns through Democratic channels. That's what they want to be assured of.

Both sides are also focused on about 35 or 40 moderate GOP members, who in the past, have voted for campaign finance reform. I'm told that Senator John McCain, who is recovering from surgery at his ranch in Arizona, is making some phone calls. On the other side of that, I'm told that that's also the focus of the folks who want to stop this campaign finance reform bill. In fact, Speaker Dennis Hastert went to the White House yesterday, basically, I'm told by aides, talking to the president, raising the prospect of presidential support for their side to stop this campaign finance reform bill. According senior White House aides, Mr. Hastert asked the president whether the president would consider supporting some changes that they might be able to make to the bill. And we're told by that aide that the president said he would take up -- take a look at each of these amendments they might make next week, and might individually agree to make some phone calls for them. But he certainly is not going to issue a veto threat -- Judy.

WOODRUFF: It will be a very interesting week.

SNOW: Absolutely.

WOODRUFF: Kate Snow, thanks very much.

One of the most outspoken and longtime opponents of campaign finance reform is Republican Senator Mitch McConnell of Kentucky. Jonathan Karl caught up with the senator on the Capitol Hill subway earlier today, as part of our Subway Series.


KARL: Senator, welcome to the subway. The House vote is going to be next week. Right about the same time, Ken Lay is going to be up on the Hill testifying before the Senate one day, the House the other day. I mean, this is going to complicate your efforts, realistically?

SEN. MITCH MCCONNELL (R), KENTUCKY: You know, soft money had about as much to do with Enron failing as Martha Stewart had to do with Kmart failing. This is a corporate scandal, completely unrelated.

KARL: But realistically, though, as a PR effort, there.

MCCONNELL: I think there's been a major effort by the press to use Enron to further advance their goal, which has been to make it more difficult for candidates and parties get their message across, which of course, enhances the power of the press.

KARL: Speaker of the House has basically said, this thing passes, Republicans can kiss goodbye the control of the House. It's going to kill the Republican Party. Do you agree with that?

MCCONNELL: I think it will be very difficult for both parties, because it does nail both parties. But the advantage to the Democrats is that they have outside groups, like the labor unions, the trial lawyers and Sierra Club, that operate just like a division of their party. They will be unrestricted by this, and will just end up spending more money. So it takes the money away from the parties (UNINTELLIGIBLE). We don't have any such outside groups. In that sense, I think the speaker is right, the Democrats will come out much better.

KARL: The big question really is, how involved is the president going to be on this?

MCCONNELL: No one knows. The president has been very closed- mouthed about this. I can tell you that the vice president and the chief of staff said Sunday a week ago that they thought there ought to be a conference between the House and Senate, at which point, presumably, they would become engaged in negotiating a bill that presumably would be something that everybody could...

KARL: Something that John McCain and his allies do not want.

MCCONNELL: They would rather not have a conference. They want to jam the president and give him no choice at all, no opportunity to negotiate. And just challenge him to either sign it or veto it.

KARL: If this thing ends up passing, does the president sign it? As you know, the White House has been coy about this. They're saying that they can't count on the president to veto a bill, but he's not promising to sign, either.

MCCONNELL: I have no idea what the president is going to do. I know what his principles were, and none of them are in this bill. But I can't speak for him and I don't know what he'll do. They've kept their cards pretty close to their vest.

KARL: But could you envision a signing ceremony at the White House, where John McCain and Marty Meehan and the others are standing there with the president, signing a bill into law?

MCCONNELL: I think it could well happen. That would be the ceremony one day. And the thing to be covered the next day is Senator McConnell and his allies going to court.

KARL: That's what would happen?


KARL: Going to court against something the president signed.


KARL: Well, Senator, that's the end of the ride. Thank you very much.

MCCONNELL: You're welcome. Good to see you.

KARL: Good to see you.


WOODRUFF: Mitch McConnell, talking with Jonathan Karl.

Well, Bay Buchanan and Donna Brazile take issue with some of the week's top political stories next. Plus, an update on the INSIDE POLITICS news cycle. President and Mrs. Bush head west for tonight's opening ceremonies at the Winter Games.


WOODRUFF: Checking the INSIDE POLITICS news cycle this hour, President Bush is in Salt Lake City for tonight's opening ceremony of the Winter Games. The president and first lady are scheduled to meet with U.S. Olympic athletes before attending tonight's big event.

The man accused of trying to force his way into the cockpit of the United Airlines flight appeared in a Miami courtroom today. Pablo Moreira is a Uruguayan bank employee who faces a felony charge of interfering with a flight crew.

Former Enron chairman, Ken Lay, may testify about his company's collapse when he returns to Washington next week. Senator Byron Dorgan said today that Congress committee lawyers have been in talks with Lay's attorneys and so far, Dorgan says, there is no indication that Lay plans to assert his right to remain silent.

Joining me now with more on the political impact of the Enron collapse, and to take issue with some of the other big stories here in Washington, Bay Buchanan. She is president of the American Cause. And Donna Brazile, former campaign manager for Al Gore.

At this stage, Donna Brazile, is either party hurt more than the other one when it comes to this Enron story?

DONNA BRAZILE, FORMER GORE CAMPAIGN MGR.: Absolutely. The Republican Party is hurt because Bush, he has a problem. Enron was his biggest contributor during the campaign. His administration had to recuse itself, his attorney general recused himself, his chief of staff of the attorney general recused himself. There were other officials who received consultant fees, and we still know that Enron officials actually gave advice to Dick Cheney. So they're in trouble right now. It's a perception problem as well as political problem, for the Bush administration.

WOODRUFF: Bay Buchanan?

BAY BUCHANAN, FMR. BUCHANAN CAMPAIGN CHWMN.: It's not at all. What Enron is all about is a corporate scandal. It's about the incredible greed, unimaginable level of greed, of corporate executives today. And it's about them thinking that they can buy anybody and anyone with their money. And they tried to buy Washington -- Democrats as well as Republicans, as well as media members now, we find out.

But the key is, in order to be a political scandal, Judy, you have to see that they did get something political that was inappropriate. That they received some kind of gift or reward, or some kind of grant that would be illegal and inappropriate. There is absolutely no evidence whatsoever. And in fact, I don't believe Ken Lay has even had a night at the Lincoln Bedroom. So far, we don't know any of this.

WOODRUFF: Let me turn your attention to this comment today. Today, on the CNN program "AMERICAN MORNING" this morning, no less a figure than John Dean was asked about this decision by the White House not to turn over the documents to the GAO and the energy task force.

And here's what John Dean said: "It's very difficult for me to accept that this is just a matter of principle. What this appears to be to me is the first step of a cover-up. Now, I want you to know that as, just a few moments ago, we had a response coming in from the White House to John Dean's remarks, and I'm going to quote a senior administration official. We don't have a name.

"Washington has a typical way of responding to scandals. Mr. Dean's comments are coming from a different planet. The suggestion that the conduct of this administration is similar to the law-breaking that took place under the Nixon administration is not only factual but it is insulting. And it appears to be a cry for attention by someone from a different era," end quote. That's from the White House.

Donna Brazile, what do you make of this?

BRAZILE: Well, different era, but the same time of trickle down of information from the White House. They haven't fully disclosed all of their contacts with Enron, all of their conversations with officials. And look, Bay, 75 percent of the Enron funds went to Republicans, because Republicans rely on powerful special interests. The Enron officials had unparalleled access to the White House during the last couple of months. I think the White House needs to come clean and comply with whatever disclosure that they need to, to help satisfy members of Congress.

BUCHANAN: You seem to have overlooked the quarter-million dollars that (UNINTELLIGIBLE). These are huge sums of money. Another Democratic senator took even more than that. But the key here is, what is the GAO doing? This is the General Accounting Office. They are financial, they audit things. What are they doing worrying about who the vice president of the United States met?

If Congress wants this information, let Congress get a little courage, a little backbone, and subpoena the White House for the records. But the White House should not be responding to the GAO.

BRAZILE: Well, I disagree. I think the White House should respond, because that's all. The GAO is only asking for names, times and topics discussed. They are not asking for confidential information between the vice president and some of the special interests, lobbyists that he met with. They're only asking for what the American people, and the investors an the taxpayers and everyone else want to know.

BUCHANAN: They're acting as a front for Congress, because Congress does not have the courage. This is very clear. The Democrats in Congress want this information. They're not willing to stand up and ask for it. But the key here is, the General Accounting Office is about financial information. I worked with them when I was in the government. They have no business asking the vice president of the United States, with whom he met, and what it is they may or may not have said.

BRAZILE: Their role as an oversight agency to help Congress investigate the executive branch of government, to provide oversight to the executive branch of government. And they have every right to request this information. Dick Cheney should come forth with it. WOODRUFF: I'm going to turn our attention to a former vice president, Al Gore. We learned today, Bay and Donna, that he is going to be making a major speech on foreign policy, national security next week. Donna, is he edging closer to running for president again?

BRAZILE: Well, we don't know yet. But what we do know is last week, Al Gore said that he would rejoin the national debate, and he would talk about four important issues. Foreign policy was the No. 1 issue that he mentioned in that speech last week. I believe Al Gore has a great deal of credibility to talk about foreign policy, to outline what steps should be taken in the future.

We all know that we will win the war on terrorism, but what are we going to do about nuclear proliferation? What are we going to do about bioterrorism? And Al Gore should speak up.

BUCHANAN: The first question Al Gore should answer -- and he certainly has every right to step forward -- but the first question he should answer is, how is it that we got ourselves in this mess? How is it that, after eight years of Clinton and Gore, that we had such a problem with terrorism, and that we were so unprepared for it.

Things happened under their watch, and we should be taking much, much stronger response. And very likely, we would have stopped what happened on September 11th. I believe they have to answer some questions for that.

WOODRUFF: Are you suggesting the former administration was responsible...

BUCHANAN: I'm not suggesting they are responsible, but...

WOODRUFF: ... in some way for lapse of security?

BUCHANAN: Yes. There should have been more taken. Why is it we didn't know more? What is it that did when the two embassies in Africa were bombed, and then the USS Cole? Was that reaction tough enough? If it had been tougher, would we not have set these people back some?

BRAZILE: And I do think that Al Gore will give a credible answer on the steps that both Bill Clinton and Al Gore took to stop the terrorist attack on America and more terrorists attack.

You know about the incident that took place in Seattle. They stopped that. That was on their watch. They increased the budget to fight terrorism. And, you know, some of the Republicans in Congress really prevented the administration from acting on some of the things that they wanted to.

WOODRUFF: Last word, Bay Buchanan.

BUCHANAN: You know, it's going to be real hard for them to start blaming Congress for something that was within the guard of foreign policy and terrorism. Good luck on that one.


BRAZILE: Well, I think Al Gore will give a great speech next week.

WOODRUFF: We are going to leave it there. Donna Brazile, Bay Buchanan, we hope to see you both back soon. We appreciate it.

And if you are watching and would like to voice your opinion on what you just heard, just log on to You can go to the INSIDE POLITICS page and drop us a note.

Now checking some of the headlines in our "Campaign News Daily": Rudy Giuliani is in Georgia to endorse Congressman Saxby Chambliss for the Senate. Chambliss is in the running to take on Democrat Max Cleveland in the fall. Giuliani met Chambliss through the congressman's work on the House Terrorism Subcommittee.

Florida Governor Jeb Bush and his father are hitting the links to raise money for the state Republican Party. For $25,000 a person, donors can play 18 holes with the former president, the governor, and hall of fame golfer Greg Norman.

The Reverend Al Sharpton plans to visit two states crucial for anyone running for president. Sharpton will make appearances in both Iowa and New Hampshire later this month. A news release calls the trips part of a -- quote -- "getting-to-know-you tour."

Well, in Massachusetts, the state house speaker has issued what some are calling a veiled threat by suggesting that state judges should be elected rather than appointed. Thomas Finneran is accusing the Massachusetts high court of overstepping its bounds as the justices consider ways to enforce the state's so-called clean election law.

CNN's Bill Delaney has more on the case and the controversy.


BILL DELANEY, CNN CORRESPONDENT (voice-over): In the proud annals of political shenanigans in the state of Massachusetts, not much can compete, say critics of the current legislature, with what is up these days on Beacon Hill.

(on camera): You see, four years ago, voters here overwhelmingly supported a so-called clean elections law, giving candidates the option to fund their campaigns with taxpayer money. But the legislature refused to actually release any money, even though the state Supreme Court has now said: Fund it or repeal it or we will suspend this fall's election.

(voice-over): With that ultimatum still hanging out there, one justice suggested candidates seek individual court orders for funds rather than just funding anyone who qualifies, bewildering for out-of- the-loop types like voters, and many legal experts, too, who say they aren't sure at all what happens next -- the uncertainty of a problem for gubernatorial candidate Warren Tolman. He will only run with clean election funds.

WARREN TOLMAN (D), MASSACHUSETTS GUBERNATORIAL CANDIDATE: That is what this battle is about, getting special interest money out of the political process and level the playing field.

DELANEY: Politicians who refuse to fund the law, though, say newcomers should find their own money just like they did.

JOSEPH WAGNER, MASSACHUSETTS STATE HOUSE: If I take dime one of public money, people in my district are not going to be happy about that. They do not want me using their public tax dollars to fund my political campaigns. I know that.

DELANEY: Further thickening the plot, meanwhile, Republican Governor Jane Swift is sort of both against the law and for it.

GOV. JANE SWIFT (R), MASSACHUSETTS: I did not support the initiative petition, but the voters voted for it in 1998, with two- thirds of their vote saying we should enforce it. And we should honor the will of the people. There is no reason to cause an impending constitutional crisis out of stubbornness.

DELANEY: Though the stubborn fact remains: In Massachusetts, no one knows the fate of public funds for this fall's election or even if there will be an election.

Bill Delaney, Boston.


WOODRUFF: The "Inside Buzz" is next on INSIDE POLITICS. President Bush's State of the Union address is history now, so why is a leak about the speech making waves?


WOODRUFF: Here in Washington, many people still are buzzing about a testy exchange between Senator Robert Byrd and Treasury Secretary Paul O'Neill. During a hearing yesterday on the federal budget, the West Virginia Democrat and the former corporate executive argued over who better represents public interests and who had more of a hard-scrabble youth.


SEN. ROBERT BYRD (D), WEST VIRGINIA: I just wanted to remind you, Mr. Secretary, a lot of us were here before you came. And with all respect to you, you are not Alexander Hamilton.

PAUL O'NEILL, TREASURY SECRETARY: What I had in my mind and what I deeply believe is this: that where we have rules made by men that restrict the realization of human potential, they should be changed. We had rules that said colored don't enter here. That was a manmade rule. And there are lots of those same kind of rules that limit the realization of human potential. And I have dedicated my life to doing what I can to getting rid of rules that so limit human potential. And I'm not going to stop. But I would also like to say, because there was an inference in your remarks that somehow I was born on home plate and thought I hit a home run.

Senator, I started my life in a house without water or electricity. So I don't cede to you the high moral ground of not knowing what life is like in the ditch.

BYRD: Well, Mr. Secretary, I lived in a house without electricity, too, no running water, no telephone, a little wooden outhouse.

O'NEILL: I had the same.

BYRD: I started out in life without any rungs on the bottom ladder.


WOODRUFF: A stunning exchange.

We're joined now by our congressional correspondent, Jonathan Karl.

Jon, what are the people you are talking to on the Hill saying about that?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, just a little while ago, Judy, I spoke with Senator Byrd. And I can tell you that on day two of this, there is no kiss and make up with this situation.

The two men have not spoken since that exchange, which, by the way, lasted about 15 minutes. It was really an argument about the Senate rules. But, as you can see, it got very personal. I spoke with Senator Byrd. And he said that he respects Secretary O'Neill. He wishes the man no ill will.

But explaining why he went on with those remarks, he said to me -- quote -- "When I met with an arrogant witness who attempts to hold the Congress in utter contempt, I feel that Congress is being demeaned."

Senator Byrd is an ardent advocate of the Senate rules, the very rules that you just heard there Secretary O'Neill criticizing. And he is standing by that. And these two men are not going to be shaking hands and making up any time soon, although Senator Byrd said, of course, he will continue to work with the secretary, as he has worked with every treasury secretary since he first got in Washington 50 years ago.

WOODRUFF: I don't remember another exchange like that one. All right, Jon Karl, thanks.

Well, joining us in Washington with some more "Inside Buzz," our Bob Novak.

Mr. Novak, first of all, I understand some news on the Republican position on campaign finance reform.

ROBERT NOVAK, CNN POLITICAL ANALYST: Talking to the House Republicans, after this Enron scandal, Judy, I think they have just about given up on trying to stop it or even amended it. They admit that the ball game is over.

You know, they had a conference call with the Republican National Committee, which is very worried about what this is going to do to Republican chances, with Congressman Bob Ney of Ohio, who is running the bill in the House. But the White House is staying out of it. And when the president says, "I will sign anything," the Republicans have very little negotiating leverage.

WOODRUFF: Still on the Republicans, you are learning something about the Republican leadership strategy on Social Security.

NOVAK: They had a meeting this week. And they are worried about getting hit on the Social Security issue again. And they are talking about mailing out -- the Social Security Administration -- mailing out to every old-age recipient, like me, a certificate saying, "You will get every cent that you have been promised." I think it is a pretty interesting gimmick which would remove some of the Democratic steam.

WOODRUFF: To South Dakota, now, a contest for the open House seat coming up?

NOVAK: I love this story. There's an open House seat there. And Governor Bill Janklow, Governor Janklow, he's been governor off and on forever. I'm told next week he will announce his candidacy. Now, why does he want to come in as freshman congressman? Because former Senator Larry Pressler is the favorite to win the seat. He is a Republican. And Janklow detests Pressler. They have a feud going back to their college days. If Pressler stays in, that will be one of the meanest Republican primaries in America.

WOODRUFF: And, finally, last but not least, this fascinating story about the wife of a White House speechwriter. And what is this about?

NOVAK: Danielle Crittenden, who is a Washington writer -- she appeared on CNN's "TAKE 5" -- wrote in pride e-mails to all of her friends -- I don't know how many, 60 -- saying that it was her husband, White House speechwriter David Frum, who wrote the famous phrase "axis of evil" in the president's speech. Now, you know that is a no-no, identifying it, particularly in this White House.

So I called -- David Frum is a very good speechwriter. He was a prominent Canadian journalist before he took this job. And I called two senior people at the White House to see if he was going to get the can because of that. And they said, "No, no, that is just a little wifely indulgence."

But they said he was very embarrassed. And one aide said, "If I were him, I would be mortified." But there is a little buzz about it. I think he hopes that the president is as indulgent about it. I think he probably will be.

WOODRUFF: Is the White House confirming that that was his term, that he came up with the term?

NOVAK: They would never confirm something like that.

WOODRUFF: They would never confirm something like that.

NOVAK: But let me tell you something. I think it was.


WOODRUFF: All right, Bob Novak, thank you. We'll see you next week.

With several major primary elections just weeks away, campaign ads on the air are across the nation, including California and Illinois. Several outside interest groups have joined the spending spree as well.

CNN's media consultant David Peeler has more on the big spenders in some of the key races.


DAVID PEELER, CNN MEDIA CONSULTANT: Some of the toughest ads are in California, where Democratic Governor Gray Davis is trying to use the abortion issue against potential GOP opponent Richard Riordan. The latest ad features Riordan's own words from 1991.


RICHARD RIORDAN: I surprise myself on my emotions on the abortion issue, because I feel very -- I think it's murder.


PEELER: A spokeswoman for Riordan, who is running even with Davis in one poll, called that add -- quote -- "a total distortion." Of the $4 million Gray Davis has spent so far, $2 million has been for abortion ads. Riordan has spent more than $2 million on his own campaign.

One of his Republican primary opponents, Bill Simon, has spent $850,000. What we are seeing is abortion emerging as an early wedge issue in 2002. Governor Davis is trying to create an early impression in the minds of the California voters about who Richard Riordan really is. In effect, can he keep his word? Because California is filled with a large number of media markets, this promises to be a very long and a very expensive campaign.

The abortion issue was also front and center in the Illinois governor's race. Republican Corinne Wood is trying to paint her primary opponents as extremists. (BEGIN VIDEO CLIP)

CORINNE WOOD (R), ILLINOIS GUBERNATORIAL CANDIDATE: Both Jim Ryan and Patrick O'Malley oppose abortion even in the case of rape and incest.

UNIDENTIFIED FEMALE: Even rape and incest? That's just too extreme for me.

WOOD: Way too extreme.


PEELER: A coalition of abortion rights groups have joined the attack, using this ad featuring a Chicago woman who was drugged and raped.


UNIDENTIFIED FEMALE: I don't know what I would have done if I had become pregnant. Jim Ryan would force victims of incest and rape to maintain the pregnancy.


PEELER: Attorney General Jim Ryan has been forced to respond.


ANNOUNCER: The truth is, Jim Ryan will support reasonable restrictions on abortion, like parental notification, a waiting period and a ban on partial-birth abortion.


PEELER: Corinne Wood is the big spender in this race. And she has outside help as well. She has spent almost $2 million, $360,000 of those dollars on the abortion ad alone. Planned Parenthood has kicked in an additional $130,000. Jim Ryan and Peter O'Malley have spent $850,000 each on their own campaigns.

The abortion ads have forced Jim Ryan to spend a lot of time defining his position on abortion instead of talking about what he would do as governor. The danger here is that the fight over abortion could damage the eventual Republican nominee, giving a boost to the Democrats in the general election.

Abortion rights groups are spending money in other states as well.


ANNOUNCER: The greatest of human freedoms is choice.

(END VIDEO CLIP) PEELER: NARAL has spent $1 million in six states with key Senate races. NARAL is picking up where they left off. In 2001, they spent more than $10 million. The group is targeting Senate races because senators confirm judges. And the abortion rights groups, of course, rely heavily on the courts to protect their interests.

Environmental groups are also targeting members of the Senate, opposing new oil exploration in Alaska and advocating alternative energy research.


ANNOUNCER: We can invest in solar and wind power and build more fuel-efficient cars and trucks. Or we can continue the policies of the past.


PEELER: The group Save Our Environment is the big spender here, targeting 10 different senators. The Sierra Club and the Wilderness Society are also on air. The environmental groups have taken a cue from the abortion rights groups, taking to the airwaves early, when there is not a lot of political advertising out there.

This strategy worked very well last year in Virginia and New Jersey governor's races. And I think it will be very interesting to see if buying ads early will do the trick again this year.

For INSIDE POLITICS, I'm David Peeler.


WOODRUFF: And, in the midst of an election year and the war on terrorism, there is no shortage of partisan bickering over the federal budget.

In that debate, our senior analyst, Jeff Greenfield, sees something bigger at stake.

JEFF GREENFIELD, CNN SR. ANALYST: It is a yearly Washington ritual as certain as the appearance of cherry blossoms. The president proposes a budget. The competing interest groups lobby the Congress. And eventually the battle ends.

But inside the numbers this year rests a fascinating glimpse at how one of the oldest struggles in American life is now being played out: the struggle between two competing visions of what the country is supposed to be.


(voice-over): On one side is the vision set down by Thomas Jefferson, principal author of the Declaration of Independence. That is an essentially Libertarian document, suspicious of large, distant government, stressing the freedom of the individual. On another side: the vision of Alexander Hamilton and, to some extent, James Madison, principal authors of "The Federalist Papers," the essays that urged ratification of the new Constitution. Hamilton especially argued for a central government powerful enough to encourage commerce and embark on ambitious public works.

The 20th century just passed was, in broad strokes, a series of victories for bigger government: Teddy Roosevelt in conservation and his battle against giant trusts; Franklin Roosevelt's New Deal.




GREENFIELD: Harry Truman's post-war commitment to fight the Soviet Union; Eisenhower's interstate highway system; Lyndon Johnson's Great Society. Even Ronald Reagan, the conservative hero, left office with the federal government as big as when he was elected.

Now, what has happened to this balance after September 11? On the one hand, it has, like all wars, made the federal government more central to our national life. You don't privatize wars. You don't fight them locally.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It costs a lot to fight this war.

GREENFIELD: The president's request for a $379 billion military budget demonstrates that.


GREENFIELD: But the wartime budget and the recession has done something else. It's taken some $4 trillion in projected surpluses off the table. So any notion of an ambitious government domestic program to shore up Social Security and Medicare, or to start some new public works program like, say, a high-speed rail system, almost surely out of the question.

In other words, the same set of facts that made us think more communally than individually has made it all but impossible to act on that communal impulse.

I'm Jeff Greenfield for INSIDE POLITICS in New York.

WOODRUFF: Jeff will be back with "GREENFIELD AT LARGE" tonight at 11:00 Eastern.

The "Political Play of the Week" is straight ahead. And 10- gallon hats are all the rage on the president's trip out West.


WOODRUFF: Leading off our "Back Page: the importance of taking care of the home folks.

And for more on that, I'm joined once again by our senior political analyst, Bill Schneider -- Bill.

SCHNEIDER: Yes, indeed.

Well, we got an e-mail this week from Eric Clark (ph) of New York City praising his senator, a certain Hillary Clinton, for fighting to get federal aid for his home town.

"I watched her during the hearings," Eric writes us, "and she handled the situation with class and brilliance." Well, sounds like a fan, also sounds like the "Political Play of the Week."


(voice-over): A senator's job is to bring home the bacon. Last fall, President Bush pledged $20 billion in federal aid to help rebuild New York City. When the White House released its budget proposal this week, the senator was displeased.

SEN. HILLARY CLINTON (D), NEW YORK: I am particularly concerned that there isn't any direct reference to aid for New York in the budget.

SCHNEIDER: When White House Budget Director Mitch Daniels complained that New York lawmakers were treating the matter as a money-grubbing game, the senator pounced and the budget director capitulated.

CLINTON: Do you speak for the president when you call New York's request for emergency disaster aid a money-grubbing game?

MITCH DANIELS, WHITE HOUSE BUDGET DIRECTOR: Well, Senator, it is a very fair question. I remember that Winston Churchill once said that he frequently had to eat his words and, in general, he found it a wholesome diet. So maybe I'm in that position.

SCHNEIDER: President Bush, on a trip to the Big Apple, felt he had to admonish his budget director and make his position clear -- three times in one day.

BUSH: And when I say 20, I mean 20.

SCHNEIDER: For Senator Clinton, it was a moment of triumph.

DANIELS: Please tell New Yorkers we love them, we admire them and we're going to keep the president's commitment to the last.

CLINTON: That's very welcome news. And I appreciate that tremendously.

SCHNEIDER: And it was the "Political Play of the Week."

(END VIDEOTAPE) SCHNEIDER: Senator Clinton had another triumph on Tuesday evening when she gave a bravura performance at the Washington Press Club's annual congressional dinner. Now, at one point, Senator Clinton wondered allowed why Attorney General John Ashcroft wasted more than $8,000 in curtains to cover up a few bare-breasted statues at the Justice Department when he could have bought some burkas for $15 in Kandahar -- Hillary the hilarious. Who knew?


WOODRUFF: She does have a sense of humor.

SCHNEIDER: Apparently.

WOODRUFF: All right, Bill Schneider, thank you.


WOODRUFF: And, at the back of our "Back Page," a picture we couldn't pass up: En route to the Olympics, President Bush spoke to members of the cattle industry in Denver. Well, many in the audience wore their broad-brimmed Western hats, but the first Texan apparently wanted to stick with a more presidential demeanor and he kept his hat in his hand -- as you can see there, in his left hand.

We will have more INSIDE POLITICS after this.


WOODRUFF: CNN's coverage continues now with "WOLF BLITZER REPORTS."

Thanks for joining us. I'm Judy Woodruff.




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