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Inside Politics

Are Nation's Governors Putting New Pressure on President?; White House Wants Pearl Suspect Tried in U.S.

Aired February 25, 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: I'm Judy Woodruff in Washington. As the nation's governors meet here and worry about their bottom lines, are they putting new pressure on the president?

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: I'm Major Garrett at the White House. After the murder of an American journalist in Pakistan, why are administration officials intent on seeking justice in U.S. courts?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill, where there's an effort to revive a controversial plan to guarantee cheaper TV ads for politicians.

WOODRUFF: Also ahead: Who is "Taking Issue" with the creator of TV's "West Wing" for saying the press is going too easy on the real president.

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

WOODRUFF: Thank you for joining us.

The word from the White House today: U.S. officials want to, quote, "get their hands on" the top suspect in the murder of "Wall Street Journal" reporter Daniel Pearl.

Ahmed Omar Saeed Shaykh appeared today in court in Pakistan, where a judge ordered that he be held for at least two more weeks. The Bush administration says intensive negotiations are underway with Pakistan for Shaykh's extradition to the U.S.

And other government officials tell CNN that federal prosecutors are working on bringing criminal charges in the case. When asked today about Pearl's murder. President Bush said he is satisfied with Pakistan's response.

He said he had a telephone conversation with President Pervez Musharraf shortly after Pearl's death was confirmed last week.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I can tell from the tone of his voice how distraught he was, how disturbed he was that this barbaric act had taken place in his country. He knew full well that those killers did not represent the vast, vast majority of the people in his own country. And he vowed to me on the phone that he would do everything in his power to chase down the killers and bring them to justice.

(END VIDEO CLIP)

WOODRUFF: Mr. Bush added that the United States is always interested in dealing with people who have harmed American citizens. But why does the administration want to seek justice in U.S. courts?

For that question, let's turn to CNN's White House correspondent Major Garrett.

Major, why pursue the extradition of Ahmed Omar Saeed Shaykh?

GARRETT: Well the short answer, Judy, is to make a point in the overall war on terrorism, and also do something that the administration considers very important, which is, essentially, deal with a criminal act -- a vile criminal act committed against a journalist who was pursuing a legitimate story and who basically fell into the midst of these terrorist kidnappers.

The White House believes that obtaining extradition for Omar Shaykh and any others implicated in this case would be a significant signal worldwide about the consequences in the United States of any acts of terrorism committed against any American.

WOODRUFF: All right, Major Garrett at the White House.

And now let's quickly bring in our national security correspondent David Ensor.

David, what are you hearing about the Pearl Case?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, U.S. officials are saying, Judy, that they cannot rule out some kind of connection between Ahmed Omar Saeed Shaykh and Pakistani intelligence. Pakistani sources have been cooperating with Pakistani intelligence.

There are reports he turned himself in a week before Musharraf announced that he had been caught. And there is concern that Pakistanis may want to obscure ISA connections. The ISI is the Pakistani intelligence services.

As Major noted, the U.S. is preparing to ask for his extradition, and that was done with Ramzi Yousef under an existing treaty in the past. But some Pakistani observers are saying they do not think that he will be extraditing to this country if he, in fact, was providing intelligence, being a source, in fact, for Pakistani intelligence.

So it's a murky, complicated case, and difficult to see how it will turn out at this point.

WOODRUFF: Well, perhaps connected with that, what are you hearing now about these reports over the weekend that the officials are thinking that maybe Osama bin Laden is still in Afghanistan and alive?

ENSOR: Well that is, in fact, what I've been hearing for months -- that they felt that he was not dead. In fact, what they say is they're tracking all sorts of people and places -- they don't want to be too specific -- who would probably get word if he were to be killed. And that has not happened.

So their assumption is he's still alive. And they say that the most likely location remains Afghanistan, or perhaps just over the border into Pakistan. It's a rather porous border, as you know.

WOODRUFF: Separately, David, in Colombia one of the candidates for president there, a woman named Ingrid Betancourt, kidnapped over the weekend. Leftist rebels evidently behind this.

Now, this is raising questions about a potential -- another new front in the war on terror.

ENSOR: That's right, Judy. And I understand from U.S. officials that the president's national security council will meet tomorrow to discuss this issue. They'll be discussing how they can best assist the Pastrana government.

And at issue is whether to broaden U.S. support against the leftist guerrillas and declare that fighting them is an explicit goal of the U.S. war on terrorism. The U.S. is already seeking $100 million help Colombia protect an oil pipeline that belonging to a U.S. company.

Now, in the past, U.S. assistance has been limited by presidential directive and legislation to anti-drug cartel aid. There are some in Congress who fear that this could turn into a kind of Vietnam-style quagmire.

But others, including in the administration, are arguing for robust assistance to Pastrana in his time of need -- Judy.

WOODRUFF: David Ensor, thanks very much. Many fronts to follow.

Less than one hour ago, President Bush on the domestic front now, opened a meeting with the nation's governors, holding their annual conference here in Washington.

Mr. Bush touched on several issues high on the agendas in many states, including homeland defense. Many governors are struggling to juggle the cost of protecting their states against terrorism, along with funding Medicaid and other programs.

I spoke a little earlier today with two of the nation's governors meeting in Washington: newly elected Democrat Mark Warner of Virginia, and Republican John Rowland of Connecticut.

And I began by asking Governor Rowland how so many states' budget deficits got to be so bad.

(BEGIN VIDEOTAPE) GOV. JOHN ROWLAND (R), CONNECTICUT: Well, there's some good and some bad news. The bad news is that it's because revenue shortfalls in all of our states the economy has been dipping over the last few months, and probably will over the next several months.

The good news is, I think that we all see a rebound in sight. So all of us are going to have to pair back our budgets by, you know, 5, 6, maybe even 10 percent. And I think we'll be in good shape after that.

WOODRUFF: Governor Warner, you're new on the job, but...

GOV. MARK WARNER (D), VIRGINIA: Forty-four days into it. We've got a $3.8 billion deficit. It didn't come about just because of the recession, but during the late '90s in our state we dramatically cut revenues, at the same time dramatically increased spending and built our business plan as if the go-go days were going to last forever. It was like we had a dot-com business plan that the whole state was operating on. And that house of cards just collapsed.

WOODRUFF: So a lot off -- you all are talking about a number of remedies here. Among them, some taxes that are primarily regressive. How has that happened? I mean, why isn't anybody talking about taxes that don't hit the lower-income people hardest?

ROWLAND: I'm not sure a lot of states are talking about increasing taxes. I think some states will increase the cigarette tax; that will be about it.

In our case, our revenue shortfalls give us a deficit this year of about $500 or $600 million, which is relatively small of a $14 billion budget.

So we're going to take the growth of our spending, which was 5 percent this year, cut it down to about 4 percent. And we'll be able to get through it. And we are going to increase the cigarette tax because most of our increased costs, and Mark would agree, are generally in the health care areas.

WOODRUFF: Cigarette taxes, though, are regressive because they obviously hit people with the lower income. Same with the sales tax, which you're looking at in Virginia.

WARNER: What we're looking at, though, is giving the voters a chance to weigh in on a referendum. We have unmet needs in education across Virginia. We have particularly unmet needs in transportation here in northern Virginia and down in Hampton Roads.

And my approach has been, let's let the voters have a say. This problem has been created. They ought to have a chance in weighing in on a solution.

WOODRUFF: One of the things that's apparently causing you all great headaches right now is Medicaid, among the other expenses that you've got to deal with.

Are you going to get the kind of relief from the federal government that you'd like to get, do you think, Governor?

ROWLAND: I think we will. I mean, this is the beginning of the budget process. I've been at this now for seven years. And everybody starts off, you know, jockeying for position.

I think by the time the president comes up with his welfare reform plan and we have some Medicaid relief flexibility, a few extra dollars, we'll be in good shape.

But I think it's all going to work out. I've seen it start in this situation, and generally by the end of the budget cycle, we're in pretty good shape.

WOODRUFF: Governor Warner, are you as optimistic? I mean, right now Medicaid is not even on the federal -- is not even on the president's or the congressional agenda.

WARNER: Well, clearly it's on our agenda, to make sure the federal steps up their share to give us a little more flexibility.

One of the most disturbing things I heard yesterday, with anticipated Medicaid growth, that will eat up most of the revenue growth that most of our states will see over the next four to five years. That's a zero-sum gain. So we do need relief.

WOODRUFF: Let me ask you about highway funding. I'm told that this is, if not near the top, at the top of your agenda. The White House, as you know, is proposing a cut of something like 25, 27 percent of highway spending.

Governor Rowland, what are the states going to do to make that up?

ROWLAND: Well, it's really -- it's based on the revenues that come in from the various taxes at the federal level. So the White House isn't proposing the revenue cut. What's happening is they're talking about the actual revenue that can be derived from excise taxes, and I think there's some motor fuel taxes and a few other things.

So that revenue is reduced significantly in this quarter. So the Congress is really the one that's going to take the action. I don't think the White House will wait until probably later on in the process.

Again, I think you're going to see some back and forth. Members of Congress -- which I did for about six years -- generally do not like to see revenue reductions going back to the states. So I think you'll see them come through. The fight will be over the trust fund, whether to use those dollars or not.

WOODRUFF: Are you optimistic on this one, Governor Warner?

WARNER: We need it. And, again, my hope is, since we've got the overall transportation act being reauthorized next year, to take out these funds this last year of the IST (ph), I think would make no sense.

So we have needs; all across the country, there are needs. And what I was happy to see was virtual unanimity amongst all the governors, regardless of party, to urge the president to restore those transportation...

WOODRUFF: But were you surprised when you saw that cut of something like $8.6 billion?

WARNER: Well, and more specifically to Virginia, $178 million on top of our existing transportation shortfalls. And the fact that we have a recession right now, I don't think that would be the right approach.

WOODRUFF: Let me ask you all finally about homeland security. The federal government talking about something like $3.5 billion. But you, the governors, want this money sooner rather than later. Are you going to get it as soon as you need it, Governor Rowland?

ROWLAND: That's a good point. I brought that up in a discussion with Tom Ridge yesterday in an open hearing.

The total amount is $38 billion that will be going towards homeland security; $3.5 billion will be going directly to the states. And that will give us an opportunity to work with our mayors, and obviously work with our local law enforcement, the first responders.

So I think -- and asking Tom Ridge the question, he feels that it's coming along fairly well.

WOODRUFF: He was a governor himself...

ROWLAND: He was a governor himself.

I'd like to see it happen. I don't think the bidding is over yet. And there's a little bit of politics involved. And I think the number will probably go up because everybody wants to be in favor of dollars for homeland security.

So as governors, we're willing to sit back and let the beginning begin (sic) in the Congress and see what comes back our way.

WOODRUFF: If you don't get that money, Senator -- Governor Warner, what does that mean? Is it money...

WARNER: That means that kind of a -- assets we need to get to our first responders could be restrained.

We in Virginia have stepped up and done our share. We put forward 40-odd million dollars to make sure that we're doing our part. And I think Tom Ridge is doing a great job working very cooperatively with our office of homeland security in Virginia.

But anything we can do to move that process through the Congress so it doesn't just become one more part of the normal authorization process would be prudent. WOODRUFF: Governor John Rowland of Connecticut, Governor Mark Warner of Virginia, good to see both of you.

ROWLAND: Thank you.

WARNER: Thank you.

(END VIDEOTAPE)

WOODRUFF: And Senator Joe Lieberman hits the streets and goes on the record. Coming up next, he tells our Candy Crowley about his White House mauling and his new swipes at President Bush.

Also ahead: She's officially in the ring and Democrats are stepping up their attacks. We'll catch up with Senate candidate Elizabeth Dole.

Howard Kurtz has the score on why the Olympic games in Salt Lake City were such a golden opportunity for the media.

This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: On the record this Monday, a man who lost his race for vice president and now has his eye on the top slot on the next Democratic ticket.

CNN's senior political correspondent Candy Crowley catches up with Connecticut Senator Joe Lieberman in, of all places, California.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: San Francisco.

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: Yes.

CROWLEY: Located in...

LIEBERMAN: Great city.

CROWLEY: ... one of the most Democratic states in the country. And you came here to talk about what all the polls show, is one of George Bush's largest vulnerabilities, the environment.

So what are you doing here?

LIEBERMAN: I'm visiting a state that I love. Actually, going back to the Senate after running for vice president I, one, was glad to have the opportunity to continue to be in the Senate. And two, I feel that I've got an opportunity and really a responsibility to talk out on national issues; to continue to speak for my values and talk about the programs I think are important to the future of the country.

CROWLEY: Well, let me be less subtle. LIEBERMAN: Yes. I was going to build up to it, but too long. Go ahead.

CROWLEY: I was going to say, so tell me about 2004. This all looks to me like planning for 2004.

LIEBERMAN: Sure, I'm thinking about '04. You know, I'm keeping the door open to '04, although we're still a lot closer to '00 than '04, so I'm not rushing through any doors.

But part of thinking about it, is not only to talk to politicians, et cetera, et cetera, but to speak publicly about what matters to me. And one of the things that matters to me a lot is protecting the environment of this country.

CROWLEY: Now, what about Al Gore and how he factors into your thought process.

LIEBERMAN: Yes.

CROWLEY: Do you still feel that if he decides to run, you won't, or are you rethinking that?

LIEBERMAN: I do. No, I'm not rethinking that. I mean, that's a judgment that I made that came from my heart, and that's the way I feel.

So he's earned the right, in my opinion, certainly from me, to make the first decision about '04.

I must say that as I've gone around, people have been very warm. I made a lot of friends in the 2000 campaign. And people have been encouraging, which I appreciate. But I'm not asking anybody sort of who they're for, or whether they're for me, so...

CROWLEY: I want you to assess for me a couple of people that are currently your colleagues and maybe might be your opponents. I know you're not going to tell me their bad points, so...

LIEBERMAN: Yes.

CROWLEY: What kind of strength does, say, John Edwards bring to the table?

LIEBERMAN: I'm going to speak about them as colleagues. John Edwards is relatively new in the Senate. He's real bright. He's got a good capacity to speak about what matters to him. You know, he's been -- he's a rising star. He's been a good senator.

CROWLEY: John Kerry?

LIEBERMAN: John Kerry and I go back to our days at college together, believe it or not. Although, as he will rapidly point out, I was a year before him so, therefore, a year older.

CROWLEY: That's not nice. LIEBERMAN: No. But you know, John Kerry, a lot of experience, a long career in public service. A good guy.

CROWLEY: Dick Gephardt.

LIEBERMAN: Dick Gephardt I probably know less than the other two because I don't serve in the House. But, you know, a real fighter. And these are all people with good ideas that can contribute.

CROWLEY: George Bush?

LIEBERMAN: yes.

CROWLEY: Eighty-one-84 in the polls. How tough is he going to be in 2004?

LIEBERMAN: Well, the important thing to say -- two important things to say now, I think. One is that the popular support for the president reflects appreciation for the leadership that he's given us in the war on terrorism and the desire that the people of the country have to unite in response to the attacks against us on September 11.

But, two, there are other issues that are troubling people, like the lack of economic recovery; like the fact that the Bush administration is really taking us deeply back into a deficit in the federal government; like the lack of protection for the environment, or the lack of funding for health care.

And I think it's important for all of us in public life to begin to speak, as I try to do today, to what bothers us about what President Bush has done to the country, notwithstanding our support of his leadership in the war against terrorism.

CROWLEY: Thanks for the preview.

LIEBERMAN: Thanks Candy.

CROWLEY: I appreciate it.

LIEBERMAN: Good to talk to you.

(END VIDEOTAPE)

WOODRUFF: Candy with Joe Lieberman.

Well, checking the headlines in our campaign news daily, Joe Lieberman's former running mate has a message for young Democrats: Let's get to work. Gore told about 600 activists at a party fund- raiser he wants to help elect more Democrats to office this year. Tickets for the event aimed at the party's younger set cost $25 each.

Minnesota Senator Paul Wellstone revealed over the weekend that he has a mild form of multiple sclerosis. The Democrat says the condition affects only his right leg. And he says it won't affect his current campaign for a third term. Early voting is underway in Texas for that state's primary election. Voters can cast their ballots for governor, senator and other statewide offices between now and March 8. The Election Day is March 12.

Rich Lowry and Ruben Navarrette take issue with the creator of TV's "West Wing" just ahead.

And next in our "News Cycle," more Mideast violence, this time at a bus stop in Jerusalem.

(COMMERCIAL BREAK)

WOODRUFF: Checking the stories in our "News Cycle," U.S. officials are negotiating with Pakistan to extradite the top suspect in the kidnapping and murder of Daniel Pearl. Government officials tell CNN that federal prosecutors are working to bring criminal charges against Ahmed Omar Saeed Shaykh.

In Jerusalem, at least 10 people were wounded when two gunmen opened fire at a bus stop in as Israeli neighborhood. Police say they shot and arrested one of the gunmen, but the second shooter fled the scene.

Accused kidnapper David Westerfield has been charged with the murder of 7-year-old Danielle Van Dam. San Diego prosecutors said today that they were adding the murder charge even though the little girl's body has not been found. Danielle Van Dam has been missing since February 1.

Well, comments about President Bush by the man who gave us president Bartlett, and GOP efforts to attract the Hispanic vote. Those lead off today's "Taking Issue" segment.

Joining me from New York is Rich Lowry. He's editor of the "National Review." And syndicated columnist Ruben Navarrette Jr.

Ruben, let me begin with you. This "New Yorker" magazine piece, an interview with Aaron Sorkin, the creator and the writer of television's "West Wing" in which, among other things, Sorkin argues that the news media has gone soft on George Bush since September the 11th.

And I'll just read part of a quote. He says -- part of a point. He says: "We're simply pretending to believe that Bush exhibited unspeakable courage at the World Series by throwing out the first pitch at Yankee Stadium. The media is waving pom-poms. The entire country is being polite.

Ruben, what do you make of this?

RUBEN NAVARRETTE JR., SYNDICATED COLUMNIST: Well listen, I should say right off the bat that I'm a fan of the "West Wing," and I have nothing against Hollywood. I've lived in Los Angeles, I've lived in Boston, and now I live in Dallas. And it's clear sometimes that, depending on where you live, your perspective on this president can be very, very different. And clearly I think folks in Los Angeles -- and I put Aaron Sorkin in this category -- still don't get -- they frankly don't understand how it is that this kind of accidental president could hover at 80, 83 percent approval ratings.

And I think that people around the country understand that lesson a lot better. There's a whole aspect of George Bush that comments like that, I think, point to. And it's clear that he doesn't quite understand why this president is resonating with folks across economic lines. The little guy, the big guy, it makes no difference.

WOODRUFF: Rich Lowry, should the news media be, in a way, reflecting the president's public approval -- high public approval?

RICH LOWRY, "NATIONAL REVIEW": Judy, I think it would be impossible for the tenor of the coverage not to have changed somewhat.

This is a president who appears to be winning a war. So that's a pretty big deal. And he appears to have -- had a bold and creative policy in Afghanistan that worked.

But, that said, I don't think the media are just a bunch of lapdogs for President Bush or the administration or the U.S. military. Every time there is supposedly a mistaken strike in Afghanistan, it gets front-page play in "The Washington Post," in "The New York Times." The supposed disinformation policy that the Pentagon floated: widely panned by the media. It got big media pushback.

WOODRUFF: It was panned by the White House as well.

LOWRY: Well, that's true.

But, Judy, the point is, no one is going to mistake the mainstream media for "National Review," unfortunately.

(LAUGHTER)

LOWRY: So I think Aaron Sorkin is just off mark.

WOODRUFF: All right, quickly changing topics: Over the weekend, the Republican Party focused on outreach to Hispanic voters.

Ruben, are Hispanic voters, among others, going to be the determinative group coming up in the presidential election in '04?

NAVARRETTE: Well, Judy, it is clear that Hispanic voters are in play. I think we're trying out now what that means.

But Mexican-Americans, in particular, have demonstrated that they will, under the right circumstances, vote for individual Republicans. They did for Michael Bloomberg in New York. They may again for Richard Riordan in California's gubernatorial election. This certainly did for George Bush. These voters are in play. And I think that the Democrats are wise to get hold of this idea that they no longer have a lock on these voters. Republicans are smart if they aggressively go after those voters.

WOODRUFF: Rich Lowry?

LOWRY: Well, Judy, if you talk to White House advisers, this is one of their highest priorities. You get the sense that they all must have "Spanish for Beginners" on their desk. This is how seriously they take this.

And most of this, a lot of this outreach makes sense, especially things that were discussed over last weekend. But I think the White House occasionally gets too risk averse. Bilingual education, for instance, would be a great issue for the White House to champion, because it is a wedge issue that would separate most Hispanic parents, who want their kids to learn English, from the ethnic and liberal lobby groups.

And this is one thing especially notable about last weekend. Richard Riordan went to that meeting and said it is a travesty that the Board of Education out there in California appears to be stepping back and trying to roll back the end of bilingual education. That has been a great boon for Hispanic children. That is the kind of message Republicans should very aggressively take to the Hispanic community.

WOODRUFF: All right, we are going to leave it there, but we hope to see you both again soon. Rich Lowry, Ruben Navarrette, thank you both. Appreciate it.

And a quick reminder: You can share your thoughts on INSIDE POLITICS and the political news of the day at our Web site. You will find us at CNN.com/INSIDE POLITICS.

The "Inside Buzz" is next on INSIDE POLITICS. Is Republican Richard Riordan in trouble? Our Bob Novak has the scoop on new poll numbers in the California governor's race and on a White House speechwriter out.

(COMMERCIAL BREAK)

WOODRUFF: In our daily search for the "Inside Buzz," we go straight to Capitol Hill and our Jonathan Karl.

Jonathan, now that the Senate is dealing with election reform, some new surprises in the works?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, this one courtesy of New Jersey Democrat Robert Torricelli.

He, you may remember, was the author of a provision in the McCain-Feingold bill that said that broadcasters must sell advertising time to political candidates for the lowest possible rate, even during prime-time. But in the only significant change to the McCain-Feingold bill made by the House, that was stripped out. Now Torricelli is charging back, this time trying to attach his plan to election reform, which is right now under consideration by the Senate. So, Judy, watch this week for a furious lobbying campaign by the National Association of Broadcasters, which obviously opposes this.

WOODRUFF: Jonathan, separately, a big battle looming over judicial nominations.

KARL: Yes, this is Judge Brooks Smith, who is President Bush's pick to be circuit court judge from Pennsylvania.

Judge Smith has been targeted by liberal groups because of his conservative views and because of some alleged ethical lapses. But now there is a story in today's "Roll Call," the Capitol Hill newspaper, that is creating quite a buzz up here on Capitol Hill. Apparently, Judge Smith, some nine years ago in a speech to Pittsburgh Federalist Society, gave a speech that was harshly critical of none other than Joe Biden, a very senior and very outspoken member of the Judiciary Committee, which will hold the first hearing on Judge Smith's nomination tomorrow. So look for an interesting interplay between Biden and Judge Smith.

WOODRUFF: Maybe not so smart to criticize the members of the committee who are going to be voting on your confirmation.

Finally, Jonathan, we know that some Enron executives are going to be testifying tomorrow on the Hill. But what is this about not knowing where they are going to be?

KARL: Well, this is interesting.

Byron Dorgan, the chairman of the subcommittee that will be hosting this in the Senate, wanted to have Sherron Watkins, the Enron whistle-blower, Jeffrey Skilling, and Jeffrey McMahon, the current president, all at the table at the very same time right next to each other so they could be kind of cross-examined at the same time.

Well, it turns out that one of the three does not want to be at the same table as Jeffrey Skilling. We're told Skilling is fine with the plan. But either Watkins or McMahon -- and we don't know which -- is objecting to sitting next to Jeffrey Skilling during this process. So it's unclear what is going to happen now. And this is a decision that may not be made, in fact, until tomorrow morning just before this very interesting Enron hearing.

WOODRUFF: Given what she said about him, that is understandable.

All right, Jon Karl, thanks very much. And we'll see you later.

KARL: Sure.

WOODRUFF: Our Bob Novak joins us now with some "Inside Buzz."

And I can't wait to ask you about this one: news from the White House a speechwriter is out. ROBERT NOVAK, CNN POLITICAL ANALYST: You remember two weeks ago, Judy, that David -- we reported that David Frum's wife -- speechwriter David Frum's wife had sent out an e-mail to friends saying that her husband was the author of President Bush's famous axis of evil speech in the State of the Union address.

People at the White House said that didn't bother them. But, in fact, today is Mr. Frum's last day on the job -- very hush hush. Nobody but his closest friends knew about it until last week. There had been no plans for him to leave. He is telling friends that he is living on his own volition. The White House aides I talked to say the same thing. But there's a lot of suspicion that nobody does that with George W. Bush and stays long very long in the White House. There's suspicion he's been kicked out.

WOODRUFF: That is quite a story.

All right, another item from California: a tracking poll showing somebody in trouble on the Republican primary for governor.

NOVAK: The Democratic pollster -- Democratic pollster -- Jim Moore (ph) taking a poll of people voting in the Republican primary. A Sunday night poll showed the latest tracking, stunning results: Bill Simon Jr., the son of the late secretary treasury secretary, never run for public office, in first place with 35 percent; Richard Riordan, the former mayor of Los Angeles, who was way ahead in the polls, 40 points ahead when they began, second place with 27 percent; Bill Jones, secretary of state, in the third place with 22 percent.

Now, what is interesting is, tracking polls taken by Simon show about the same thing. My sources in California say Simon is going to win that primary. They're laughing in the Democratic governor's office, Gray Davis' office, because they have been trashing Riordan so hard, they said, "We are picking the Republican nominee."

Well, they did that in 1976 when they picked Reagan. And you know what they got. But this would be a huge turnaround. Riordan, if you remember, was talked about going into the race by the White House. He was the White House candidate. And now he is falling fast.

WOODRUFF: Last but not least: soft money, a big rush on to raise more of it.

NOVAK: You cannot believe the requests from lobbyists for soft money, because this is last year, if this campaign finance bill gets signed by the president, they're going to have it.

There are two huge soft money events tonight coinciding with the National Governors Conference. Democratic governors are going to raise $7 million. The Republican governors are going to raise a lot more than that at the Wardman Park Hotel. They are asking $100,000 individual contributions for the big corporations. And, if you do that, you can go to the ESPN End Zone for a little reception tonight. And you get to meet all the governors, what a treat, for $100,000.

WOODRUFF: Is that all? NOVAK: Well, no, you get to go to the dinner, too.

WOODRUFF: No, I mean, is it only $100,000?

NOVAK: Only $100,000.

You remember Ron Kaufman, the Massachusetts politico? He is the guy who is running that. And he is bringing in the money by the bushel baskets for the Republican governors. Jeb Bush is the big speaker tonight.

WOODRUFF: They're going to need a shovel.

Bob Novak, thank you. We have got news all around from Bob today. Thank you.

Well, President Bush -- speaking of him -- travels to North Carolina this Wednesday. And he is expected to raise, speaking of money, more than $1 million for state Republicans, including Senate candidate Elizabeth Dole. Dole formally announced her campaign, her candidacy, this weekend.

And, as CNN's Jeanne Meserve reports, Democrats were quick to pounce.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): She has been called Queen Elizabeth. But she would like to trade that title for another one.

ELIZABETH DOLE (R), NORTH CAROLINA SENATORIAL CANDIDATE: Today marks the formal launch of my campaign to succeed Jesse Helms in the United States Senate.

(APPLAUSE)

DOLE: I say succeed Jesse Helms, because we'll never replace him.

MESERVE: Helms, an icon of Southern conservatism, has given Dole his endorsement. And she is working hard to get his voters. Despite shifts rightward on abortion and gun control, some conservative are uneasy.

MARK ROTTERMAN, NORTH CAROLINA GOP CONSULTANT: She is going to have to state her position and stand with it. Remember, people always didn't like what Helms had to say, but they believed that he believed it.

MESERVE: The Democrats have taken out ads underlining the Helms- Dole connection in the belief that changing demographics makes Helms a liability. But Dole is sky high in the polls.

SCOTT FALMELN, NORTH CAROLINA DEMOCRATIC PARTY: There is no silver bullet in our arsenal to beat Mrs. Dole with. This is going to be one issue at a time.

MESERVE: Democrats have already fired off a TV ad playing up Dole's Enron connections.

(BEGIN VIDEO CLIP)

ANNOUNCER: ... to a secret fund-raiser hosted by Kenneth Lay.

(END VIDEO CLIP)

MESERVE: The Democrats hope it resonates with those who once worked in the state's textile mills shut down by competition from abroad.

NORMAN BEAVER, FORMER TEXTILE WORKER: I would like to sit down and talk with her.

MESERVE (on camera): What would you tell her?

BEAVER: Wake up. We better wake up before it is all gone.

MESERVE: Dole's Democratic opponent could be Erskine Bowles, President Clinton's chief of staff.

ERSKINE BOWLES (D), NORTH CAROLINA SENATORIAL CANDIDATE: The folks I have met here at home want a senator who knows North Carolina, who has lived here.

MESERVE: Bowles is trying the counter the perception that he is a creature of Washington, a liability Elizabeth Dole shares.

ROB CHRISTENSON, "RALEIGH NEWS & OBSERVER": She has not lived in the state since Elvis was king and Eisenhower was president. So she has to reestablish her roots.

MESERVE: But, in North Carolina, almost everyone knows her. And many embrace her as the local girl who made good.

UNIDENTIFIED MALE: She is basically the right person at the right time with the right skills, if she can do the job.

MESERVE: No one expects Elizabeth Dole to maintain her commanding lead. But with control of the U.S. Senate in play, this race will be pivotal. And many expect it will get very close, very expensive and could get very nasty.

Jeanne Meserve, CNN, Salisbury, North Carolina.

(END VIDEOTAPE)

WOODRUFF: Well, from North Carolina to Jeff Greenfield, who has headed West. When we return: his thoughts on the outsider advantage for candidates hoping to move from the statehouse to the White House.

(COMMERCIAL BREAK)

WOODRUFF: Most of the Democrats thinking about a run for president share a Washington-based resume.

But, in today's "Bite of the Apple," our Jeff Greenfield has some thoughts on the benefits of running from outside the Beltway.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST: If you look ahead to November, always a dangerous distance in politic, California Governor Gray Davis looks like he is in for a very tough reelection fight. That was not exactly what he or his supporters were planning for. They were planning for a landslide reelection that would position the governor for a possible presidential run.

And why not? With just about every other Democratic wanna-be coming from Washington, Gray Davis finds himself in the place where of our recent presidents have come from: a governor's mansion.

(voice-over): A generation ago, the picture was very different. In fact, from 1960 to 1972 -- that's four consecutive elections -- both major party nominees were current or former senators: Kennedy vs. Nixon; Johnson vs. Goldwater; Nixon vs. Humphrey; Nixon vs. McGovern.

But ever since 1976, at least one of the nominees has been a current or former governor. And in four out of the last five presidential races, the candidate with a governorship became the president.

Now, look at the current crop of Democratic presidential possibilities: Al Gore, Joe Lieberman, John Kerry, John Edwards, Dick Gephardt, four present or former senators and the House minority leader. Only Vermont Governor Howard Dean, who has been making candidate-like journeys lately, breaks the Washington model.

(on camera): This appeal of the not-from-Washington outsider always baffles Europeans. They never seem to grasp the enduring appeal of the outsider to American voters, who are skeptical of centralized government.

Now, that appeal may well be tested in the wake of September 11. That has Americans looking to Washington for answers. But, if the recent pattern holds, you can understand why Gray Davis, the governor of the biggest state in the Union, might find a race of a gaggle of Washingtonians so appealing. These days, it seems like a winning formula.

(END VIDEOTAPE)

WOODRUFF: And that was Jeff Greenfield.

Well, all the judges agree: NBC wins the gold when it comes to TV ratings. Up next: why Americans reversed recent trends and took so much interest IN the Winter Olympics.

(COMMERCIAL BREAK)

WOODRUFF: Well, it turns out that TV ratings for the Winter Olympics were 15 percent higher than the last Winter Games. And they brought NBC an estimated $75 million profit.

Joining me now with his thoughts on the Salt Lake City Games: Howard Kurtz of CNN's "RELIABLE SOURCES" -- Howard.

HOWARD KURTZ, "RELIABLE SOURCES": Judy, ice dancing, bobsledding, curling, these are not exactly America's most talked- about sports. So how did the Winter Olympics turn into such a huge ratings bonanza for NBC?

(BEGIN VIDEOTAPE)

(voice-over): It sure didn't hurt to have the Games in America in a time so patriotic that the country used a flag from the World Trade Center. And unlike the Olympics in Sydney two years ago, in Salt Lake there was less need for tape delays, which spoils all the fun. Would any normal person watch the World Series half a day late?

Another plus: The USA won nearly three times as many gold medals as four years ago, including one for the Cinderella skater, 16-year- old Sarah Hughes. But the real secret of Salt Lake's success has been controversy. A cute Canadian couple -- cute is important in these things -- was seen as being robbed of the gold medal by a backroom deal that gave the top honor to the Russians.

This was treated as the biggest international incident since the Cuban Missile Crisis. An outrage, critics said. Ice skating was no better than boxing, they said. Soon, Jamie Sale and David Pelletier were on "LARRY KING" and the cover of "TIME" and "Newsweek." The Russians were so teed-off at disputed calls that they threatened to pick up their marbles and their ice skates and go home.

Vladimir Putin declared the Games a flop. It was the Cold War all over again, minus the nuclear missiles. Even political pundits were required to have an opinion on the figure skating flap.

BILL PRESS, "CROSSFIRE": So why don't the judges do what they do in football? Replay the video, look at the video and say, "Well, we really blew that" and change their mind?

(BEGIN VIDEO CLIP, "THE O'REILLY FACTOR")

BILL O'REILLY, HOST: Now, this French judge -- I mean, she should be arrested. I think she should be arrested, and so that she'd be forced to tell what happened.

(END VIDEO CLIP)

(END VIDEOTAPE)

KURTZ: Oh, and one other thing: For months now, you couldn't turn on the television without seeing war, bombing, terrorism, recession, Middle East violence, Enron. Maybe viewers wanted a little relief: a competition where the only real damage is to the athletes' egos -- Judy.

WOODRUFF: Howard, I hate to ask you this question, but you are not suggesting that the American people may be more interested in sports than they are politics, are you?

KURTZ: Well, in politics, sometimes the outcome is kind of murky. Did we really win the war on terrorism in Afghanistan? Will campaign finance reform really clear up the system? In sports -- except for those figure skating controversies -- if you skate faster, ski faster, bobsled faster, you win. And I think some people like the clear outcome there.

WOODRUFF: Most of the time, clear outcome.

KURTZ: Most of the time.

WOODRUFF: We'll go along with that.

All right, Howard Kurtz, thanks a lot.

Well, now that Salt Lake City Games are over, chief organizer Mitt Romney says he is thinking about running for office in his home state of Massachusetts. By most accounts, he is looking at the governor's job. That may be why fellow Republican and acting Governor Jane Swift seemed a little uncomfortable when asked about Romney today and why one of her colleagues felt compelled to step in.

(BEGIN VIDEO CLIP)

ACTING GOV. JANE SWIFT (R), MASSACHUSETTS: Every conversation I have had with individuals who have talked to Mitt Romney have indicated that he is interested in contributing to Massachusetts and improving the Republican Party. And I have lots of ideas on how he could be helpful there.

GOV. JOHN ENGLER (R), MICHIGAN. I have to object, though, to Mitt Romney going back to Massachusetts. He was born in Michigan. He needs to come back to Michigan. We would like to have him in our state. We have got two United States Senate seats waiting for him.

(LAUGHTER)

(END VIDEO CLIP)

WOODRUFF: Governor John Engler and Jane Swift weighed in on Mitt Romney's future after they met with President Bush at the White House.

It is one of the most enduring images from the days after September the 11th. When we come back: What happened to bullhorn used by the president in his memorable trip to ground zero?

But first, let's find out what is ahead at the top of the hour on "WOLF BLITZER REPORTS" -- hello, Wolf.

WOLF BLITZER, "WOLF BLITZER REPORTS": Hi, Judy.

Just ahead at the top of the hour: a false sense a security. Did the Federal Aviation Administration fail the flying public? We'll tell you about a whistle-blower's harsh words for the government. Also: the challenge for the United States in bringing Daniel Pearl's kidnappers to justice. And is Osama bin Laden alive? The latest on the hunt for al Qaeda's top man right after INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: A quick glance at what is in the works on INSIDE POLITICS. We'll have more from our Candy Crowley on the road in California on the Republicans running for governor. On Wednesday, we will check on the Florida governor's race and join Democrat Janet Reno as she begins her pickup truck campaign tour across the state.

Finally, President Bush has received what he calls a historic memento of a day that he and the nation will never forget when he rallied rescue workers at ground zero three days after the September 11 attacks. In the Oval Office today, New York Governor George Pataki gave the president the bullhorn he used to get his message across. Mr. Bush says that it will be placed on exhibit at his father's presidential library in Texas.

CNN's coverage continues now with "WOLF BLITZER REPORTS." Thank you for joining us. I am Judy Woodruff.

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