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President Bush Not Impressed With Economic Rebound; What Factors Caused U.S. Economic Surge?

Aired April 26, 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. We'll tell you what the new surge in economic growth may mean for elections this year and in 2004.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: I'm Major Garrett with the president in Texas. And I'll tell you why Mr. Bush still doesn't sound too impressed by the economic rebound.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on the "Capitol Subway," where I talked to Kay Bailey Hutchison about Karen Hughes, homesick Texans and struggle to balance work and family.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider in Washington. I'll tell you who is speaking a whole different language in the political play of the week.

ANNOUNCER: Live from Washington, this is INSIDE POLITICS WITH JUDY WOODRUFF.

WOODRUFF: Thank you for joining us. Well, ever mindful of the lessons from his father's White House loss, President Bush tends to greet good economic news with caution. So it was again today, even though the U.S. economy posted its strongest growth in the first quarter since late 1999.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That's a very encouraging sign for American workers and American families. Yet as encouraging as this number is, I am not content. We've got more to do.

(END VIDEO CLIP)

WOODRUFF: Our White House correspondent, Major Garrett, is with the president in Crawford, Texas. Major, the president used this occasion to make yet another pitch for a permanent tax cut. But what's the political calculation here?

GARRETT: The political calculation, Judy, is to try to make Democrats who voted for the Bush tax cut last year vulnerable on the tax issue in this election year. That's not an easy thing for the White House to do. But by talking about making the Bush tax cut -- which is due to expire in 2010 -- permanent, it wants to force those Senate Democrats in states like Missouri, Georgia and South Dakota vulnerable on the tax issue; to make the tax issue a relevant part of this year's election campaign, with Republicans pounding on those Democrats.

Tim Johnson in South Dakota, Jean Carnahan in Missouri, and Max Cleland in Georgia -- forgive me -- vulnerable on the tax issue by saying if you're not going to vote to make the tax cut permanent, you're really in favor of raising taxes. Republicans want to pound that message.

The president has been in all three states talking about making the Bush tax cut permanent. Privately, White House officials acknowledge making the tax cut permanent would not change the economic destiny of the country in the short term. But on the political side of the ledger, they want to make that issue very relevant in the 2002 campaign, so the Bush tax cut comes front and center, making those Democrats a little bit vulnerable -- Judy.

WOODRUFF: Major Garrett reporting from Crawford, thanks.

Question: are tax cuts really a driving force behind the new surge in the economy? Brooks Jackson reports on the factors at play.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): Cars selling, homes being built. Consumers still buying, big items and small. But now Commerce Department statistics confirm it: the U.S. economy has come back, and even more strongly than expected.

Economic output jumped at a rate of 5.8 percent in the first three months of the year -- nearly a full percentage point higher than the consensus forecast.

DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR'S: This is going to be the wimpiest recession in history.

JACKSON: A key factor: continued low interest rates. Cheap mortgage money keeps home selling and being built. Housing was up 15.7 percent. Zero percent car financing produced a surge of car sales last year, clearing out dealers' lots. And sales continue strong this year.

WYSS: In the first quarter, well, they were selling cars, but the cars were coming out of the factory instead of off the lots.

JACKSON: One reason for the buying: the tax cut, more money in consumers' pockets. And they are spending a lot of it. Disposable personal income after taxes jumped 10.5 percent.

And increased government spending, especially for the military, also gave the economy a boost. Defense spending up 19.6 percent. Business spending is still weak, recovering from the bursting of the high-tech bubble. But spending for new equipment and software fell only half a percentage point.

Consumer spending may slow soon. A key measure of consumer sentiment dropped sharply Friday. But economists see signs business spending will soon pick up.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: I think we've got very strong odds. We've got nice productivity growth, which will follow the bottom line which means we'll see nice profits this year. And there's nothing that feeds equipment spending more than stronger profits.

JACKSON: That would come just in time to keep the economy growing at a healthy pace.

(END VIDEOTAPE)

These better than expected numbers should translate soon into more jobs. Last year's recession is now clearly over, though not yet officially. And unemployment never got above 5.8 percent. IT's the lowest of any recession on record -- Judy.

WOODRUFF: All right, Brooks Jackson, thanks.

Now let's bring in our senior political analyst, Bill Schneider. So, Bill, is all this likely to have an impact on the midterm elections this year?

SCHNEIDER: Oh, yes. And it's likely to be good news for Republicans. Because research shows the economy does affect the outcome of a congressional election. The better the nation's economy, the better the president's party is likely to do at the polls.

Remember the last midterm in 1998? That was in the middle of the impeachment drama and the Democrats surprised everybody by gaining seats in the House of Representatives that year. It certainly surprised Speaker Newt Gingrich, who resigned.

And we found that voters who had prospered under Bill Clinton voted Democratic, to save the president.

WOODRUFF: So you're saying people vote their pocketbook.

SCHNEIDER: Well, not exactly. What matters most is how well voters think the country's economy is doing. People believe their own financial well-being is not much affected by politics. But they believe the nation's economy is very strongly affected by politics.

Now, let's take a look. Last year people's assessment of the country's economy was deteriorating long before September 11th. The number who thought the economy was in good shape dropped, from 67 percent in January 2001, just before President Bush took office, to 42 percent by mid-year, down to 29 percent this past January.

Now, we see that number has been moving up this year. Now 39 percent say the economy is in pretty good shape.

WOODRUFF: So is it too early to know whether this could affect the 204 presidential election?

SCHNEIDER: I think it's likely to have an effect. Look, every president wants the bad economic news to come early in his term. Then when he faces the voters again, things will be looking up. The economy was in terrible shape during the first two years of Ronald Reagan's presidency -- over 10 percent unemployment.

But by 1984, it was morning in America and voters had more or less forgotten the bad times. George Bush's father reversed that cycle and he paid the bitter price for it. The elder Bush had a recession during his last two years. And when he ran for reelection in 1992, it was not morning in America. It was the economy, stupid.

WOODRUFF: It was a different situation. All right, Bill Schneider, thanks very much.

A new school shooting prompts another conversation about kids and guns. Up next, I will talk about the deadly rampage at a German high school with one of America's top gun rights advocates, Wayne Lapierre of the NRA.

I'll ask Senator and DLC chairman Evan Bayh about election politics, and his family's escape from a fire in their home.

And later...

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: God bless you. How are you. Good to see you. Good to see you. All right. All right. Welcome to America.

(END VIDEO CLIP)

WOODRUFF: A familiar face draws fans outside the White House and takes time out for a chat with us.

(COMMERCIAL BREAK)

WOODRUFF: Wayne Lapierre, thank very much for joining us.

WAYNE LAPIERRE, NRA EXECUTIVE VICE PRESIDENT: Glad to do it.

WOODRUFF: Let me first ask you about Germany today. A 19-year- old expelled student opened fire at a school, killed 18 people, including himself. Somehow in a country with very strict gun laws, he was able to get hold of a handgun and a pumping action shotgun. How do we stop these kinds of shootings?

LAPIERRE: That's a good question, Judy. I mean, Germany, England and those countries have every type of law that the people that want to push for more laws in the United States say they want, and yet it still happens. You know, it's very tough.

I mean, it's hard to say. That's the point. I don't think it's the gun laws. If it was the gun laws, it wouldn't be happening in those countries. They have every gun law the other side wants. But it still happens. So I think it's better scrutiny, looking for the indicators and the signs as to what's going on with young people.

WOODRUFF: I'm going to ask you to move on to your conference here in the United States. You're in Reno, Nevada getting ready for your annual conference. We notice that Democratic Senator Zell Miller of Georgia is the keynote speaker. This is the first time in over ten years you've had a Democrat speaking there.

Are there more bridges being built for the Democratic Party since George Bush became president?

LAPIERRE: I think there are, Judy. I mean, what happened -- and we're pleased to have Zell. I mean, he's always been a great defender of firearms ownership and the second amendment. But what happened is in the 2000 election, Bill Clinton and Al Gore did everything they could to center the gun issue, and make it a referendum on guns.

They pushed for registration of guns and licensing of all gun owners. They said there is no second amendment, it only applies to the government. And mandatory federal testing before you could buy a gun.

And what they found was, among union households, gun ownership runs 48 percent to 90 percent. And of those union households that own firearms, up to 50 percent of the union members defected to Bush from Gore, based on the gun issue.

Now, what's happened since then is a sea change in the politics of the gun issue, where Democrats across the country are reevaluating their position and siding with the second amendment.

WOODRUFF: I want to ask you about a new book, at least an updated book, that's come out about gun control laws, by a man named Robert Spitzer. He finds that in five the seven Senate races in the year 2000 the NRA considered important, the candidate you favored was defeated. And four of those states, Missouri, Florida, Michigan and Washington, have sizable populations of gun owners. How do you explain that?

LAPIERRE: Well, I think he's looking at states to try to get where he wants to go. It's common knowledge that if -- that the gun issue was overwhelmingly rejected in the 2000 elections. All the studies show that it probably cost Al Gore the presidency.

And that's why you have the new prototype of Democratic campaigns. I think it's probably Mark Warner in Virginia, where he says he supports the second amendment. We're pleased to have Zell Miller here at this convention. And I mean, there's...

WOODRUFF: Well, another finding from this book was that Gore may have lost the election in smaller states, but it says he did well among gun owners in the biggest gun-owning states, like Michigan and Pennsylvania. Do you dispute that?

LAPIERRE: Oh, absolutely. I mean, the fact is that the gun issue kept Al Gore tied down in Pennsylvania to the point where he had to keep going back and back and back to Pennsylvania, and spending resources on it. And meanwhile, he lost Arkansas, Tennessee and West Virginia.

I mean, I don't think anybody looks at Pennsylvania and says Al Gore's position on guns was a plus to him in that state.

WOODRUFF: Not many people knew that the smaller electoral vote states were going to make such a difference.

Finally, earlier this year, you questioned some new laws that the Bush administration was trying to enact regarding security, At one point you said we witnessed a fire sale of American liberties at bargain basement prices, in return for what you call the false promise of more security. Do you believe American liberties have been sold out?

LAPIERRE: Well, I think it is a great coming issue in politics, is the whole issue of privacy and freedom versus those that would trade our liberties away to try to buy a little security. And you look at societies who have done that, they end up with less freedom and they've never been more secure.

I think American freedom is the most precious freedom the world has ever known. And we need to guard the entirety of the whole, of the individual freedoms we have in the Bill of Rights. That's what makes our country different.

WOODRUFF: And you're saying that's what perhaps wasn't done?

LAPIERRE: I think it's the great coming issue in politics. You look at proposals out there, they range from making everyone carry national ID cards to -- my gosh, technology is out now there that can look at your emotion, the signs on your face, and through optical scanning the computers try to tell you what's in your heart.

And I know the companies will be pushing the technology, I think we Americans are going to have to be very vigilant, in terms of our freedoms and our privacy, down the road in the future.

WOODRUFF: All right, Wayne Lapierre, executive vice president of the National Rifle Association. We thank you very much. It's good to see you.

LAPIERRE: Thanks, Judy.

WOODRUFF: Meanwhile, NRA President Charlton Heston will be a guest tonight on "NEWSNIGHT WITH AARON BROWN." That's at 10:00 p.m. Eastern.

Some visitors to the White House were certainly left with a good impression today.

(BEGIN VIDEO CLIP)

BUSH: Say "economic recovery."

(END VIDEO CLIP)

WOODRUFF: The story of our photo op with this funny man is still ahead.

And we will also have a more serious look at the economic recovery in our daily debate.

(COMMERCIAL BREAK)

WOODRUFF: Time now for a look at the INSIDE POLITICS newscycle. Germany is trying to come to grips with a school shooting that left 18 people dead today, 13 of them teachers. Apparently the gunman was a recently expelled student. Ironically, the massacre took place on the same day that Germany's parliament approved stricter gun control laws.

Some potentially good news for the U.S. economy. The nation's gross domestic product grew at an annual rate of 5.8 percent in the first quarter. That was a full percentage rate higher than the forecast of private economists.

In Philadelphia, six Catholic cardinals are attending a fund raiser tonight and the hopes is that they are in agreement on a zero tolerance policy towards sexual abuse by priests. Boston Cardinal Bernard Law is among those attending the Philadelphia event. The "Boston Herald" reports that Law may be reassigned to an unspecified position at the Vatican. A spokeswoman for Cardinal Law says the "Herald" story is -- quote -- "groundless."

With us now, Maria Echaveste. She is former deputy chief of staff of President Clinton. And Rich Lowry of the "National Review."

Rich, to you first. The "Boston Herald" report is being knocked down by the office of Cardinal Law. But separately the "Boston Globe" today reporting that the Vatican is talking about what he will do, whether he will stay on in his job. Should he stay on?

RICH LOWRY, "NATIONAL REVIEW": No, I think he should go. He has been part of an appalling betrayal of the faithful up there in Boston, and there's been a lot of speculation about him going. And it's going to continue until he actually goes.

And the smart betting has been the Vatican will find some way to kind of politely ease him out the door. Now, the problem, if the Vatican did act on the scenario that was reported in the "Herald" today, two potential problems with it.

One will play as though the Vatican is trying to protect him or is in some way promoting or rewarding him for his misconduct, by clasping this dishonored cardinal to its bosom. And also, once the Vatican sort of gives on the principle that misconduct, mishandling these cases means a cardinal or a bishop should go, well, then you might have other some dominoes falling.

That raises the question of what's going to happen with Cardinal Egan, what's going to happen to all the bishops now, spread out throughout the country, who had worked with Cardinal Law in the past in Boston and were involved in the scandal.

WOODRUFF: Maria, how do you rate the Vatican's handling of all this?

MARIA ECHAVESTE, FMR. CLINTON WHITE HOUSE DEP. CHIEF OF STAFF: Well, I think it took them a long time to recognize how serious a problem they have in this country with this scandal. This extraordinary meeting at the Vatican was but a first step. The statement that the pope issued was barely acceptable to many Catholics that I've spoken to.

And I think that, yes, this question about what happens to Cardinal Law, as a symbol, really, of what the hierarchy did in not protecting all of the children and all the families, has put the Vatican in a very, very tough spot. But I think if they want to hold on to the Catholics in America, they have to take some strong steps. And one of them is moving Cardinal Law.

WOODRUFF: Let's move to the U.S. economy. Rich, we just reported the domestic economy grew at a remarkable, robust rate, 5.8 percent in the first quarter. At the same time, we learn today that the federal budget deficit is more than doubling. It's going to be over $100 billion in this fiscal year. Which is the peace of news to focus on here?

LOWRY: I think the economy. I think the deficit numbers are a little bit of a lagging indicator. And the fact is, when you have a recession, you tend to have deficits and revenues go down. People don't make as much money so they can't send as much to the government.

And the fact is, next year revenues will be larger than expected and the deficit will be smaller, because those revenue numbers will reflect the growing economy. And you showed President Bush earlier, before we came to this segment, and he seemed almost giddy. And he should be, because this is fantastic news for him. And it shows the Democrats are going to have a lot of trouble getting traction on the economy, which they thought maybe they could this year.

WOODRUFF: And, Maria, something the administration is going to be able to tout now, is tax cuts. They're going to presumably say the tax cuts are part of the reason the economy is doing so well.

ECHAVESTE: Well, we're also facing the deficit number. I think the important thing is, it's a one-quarter number. We have to get underneath those numbers and find out what exactly is the source, or the basis. Can this economy, at this rate, be sustained?

The reality is that the tax cuts were irresponsible when they were enacted. I know Congress is trying to make them permanent. The one thing I certainly learned, being in the administration and the White House and looking at the budget, you can't go quarter to quarter.

If you're making decisions, you're making decisions for a long term. And I think anyone who is going to take a 5.8 and start making decisions is going to be very, very wrong. WOODRUFF: All right, we're going to have to leave it there. Maria Echaveste, Rich Lowry, good to see you both. Thanks very much.

From babies to the energy bill. Coming up next, our Jonathan Karl takes Senator Kay Bailey Hutchison in many different directions on the "Capitol Subway."

(COMMERCIAL BREAK)

WOODRUFF: Today's "Inside Buzz" comes from the Capitol Subway, courtesy of Senator Kay Bailey Hutchison of Texas, and her seat mate, our Jonathan Karl.

(BEGIN VIDEOTAPE)

KARL: We finally got a vote on energy, but it looks like most of the president's priorities, most of your priorities are not in this bill: no drilling for oil in Alaska at ANWR.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Well, we did get a lot that will move us a step forward for energy sufficiency from our own country. We do have conservation. We have renewable energy. And we have incentives for more production and more exploration for oil and gas.

KARL: But you have got to be a little disappointed that this energy bill is scaled back from what you wanted.

HUTCHISON: Oh, of course it is scaled back from what I want. It is a C-minus bill. We're hoping to make it a B bill in conference. And I think we have a chance to do better.

KARL: A C-minus in some schools, you can't even stick around. You could be thrown out.

HUTCHISON: But this isn't the final exam.

(LAUGHTER)

KARL: So, we're hearing that Don Nickles is thinking about challenging Trent Lott for Republican leader. What do you think about that? Do you think that he would have a chance?

HUTCHISON: Oh, I haven't heard anything like that. You're on a different pay grade from me.

KARL: Well, what would your inclination be? Do you think that Trent Lott serves another term as leader?

HUTCHISON: I do. I really like Don Nickles, but I think Trent is doing a terrific job. And I think that it's very difficult to run the Senate. Everyone is an independent person who has been elected by their own constituents. And it's hard to bring people together in that kind of a scenario.

KARL: Now, Karen Hughes was the big news this week: Karen Hughes going back to Texas. She misses Texas. And, of course, she has got -- her son is very homesick. And you get the pressures of family and work. What was your reaction to that, to Karen Hughes leaving town?

HUTCHISON: Well, I was very sad for her personally, but I understand totally. I've known Karen for 25 years. Her son has always come first. And he has three more years left in high school. And he really wanted to go home. And I think she made a mom decision rather than a Karen-Hughes-the-professional decision.

KARL: And how are you finding the weighing that balance between work and family? You have two babies at home now, two babies.

HUTCHISON: Two babies. I do. I do. And it's hard. It's very hard, because already I'm torn. I do bring them up. And I bring them back and forth. And I try to spend all the time with them that I can. And I do.

KARL: Are you getting a lot less sleep? I mean, you must be.

(LAUGHTER)

HUTCHISON: I have not slept through the night for a year. And I used to be the kind of person that said, "I have to have my eight hours." No longer. I now can get up. I can do a 30-minute feeding. And I can go back down and sleep like a baby. It is just amazing that you adapt, but you do.

(END VIDEOTAPE)

WOODRUFF: Senator Kay Bailey Hutchison talking with our Jon Karl.

And now a Democratic senator: Evan Bayh of Indiana. The Democratic Leadership Conference he chairs is holding a weekend retreat in New Orleans. And Senator Bayh is with us now from Capitol Hill.

Senator, first, the economic news today: the growth rate up 5.8 percent in the first quarter. Does this suggest that President Bush's tax cuts were the right way to go after all?

SEN. EVAN BAYH (D), INDIANA: Oh, it suggests a number of things, Judy, probably the foremost of which is that the rebuilding of inventories has gotten the economy going again.

Businesses late last year just stopped producing things in response to a sluggish economy. They sold off their goods. And now they have had to accumulate them, so that has gotten the economy going again. The tax cuts didn't hurt. Lower energy prices probably didn't hurt either, people drawing down some equity out of their homes to spend. All those things contributed to a growing economy.

WOODRUFF: Well, we also see, at the same time the economy is growing, the budget deficit is climbing, over $100 billion. What is that going to do to priorities like defense and like homeland security? BAYH: Well, it presents us with some very difficult decisions, particularly with regard to the long-term vitality of Social Security and Medicare. Deficits in the short run, when you're trying to stimulate the economy with tax cuts or spend money to fight a war on terror, that doesn't hurt you so much.

But, in the longer term, it is bad economics and it is bad social policy to return to the days of large ongoing deficits. And we've got to come to grips with that as a country, not just this year, but five, six, seven years down the road.

WOODRUFF: Senator, some Democrats have been criticizing the leadership of your party lately, saying that it doesn't have a message going into this year's congressional elections. Are Democrats searching for a message? And, as the head of the Democratic Leadership Council, are you clear on what the message is?

BAYH: Oh, I think you'll find the Democrats uniting around a core message, Judy, of economic growth. That's the foundation upon which everything else has to be built. Fiscal discipline, trying to get the budget back closer to balance is a part of that, for both economic reasons and also, as I mentioned, to preserve Social Security and Medicare, two bedrock parts of the social fabric in our country that are important to Democrats and all Americans.

WOODRUFF: Well, how is that any different from what the Republicans are saying?

BAYH: Well, they have to come to grips with the fact that their proposals, in the longer term, propose taking virtually the entire Social Security and Medicare surpluses to spend on other things. I don't think that is sound economics. And I don't think it is good social policy either, Judy. And we're going to be arguing that that's not good for America.

WOODRUFF: Senator, a little bit earlier this week, I was in New York to cover a Democratic voter registration event. And, among other things, the party chair, Terry McAuliffe, told a large crowd at New York University that the party, that they should never forget what happened to Al Gore in 2000. Is that a sound message, theme, for the party going forward, do you think?

BAYH: Oh, I think it doesn't hurt to help rally the party faithful, to remind them that the nominee did get the most votes, and that there was a great deal of controversy surrounding the Florida decision.

But I think we have to stand for more than just our resentments. And our message has to be more than just, "We was robbed." We have to have a positive message about the future, economic growth, fiscal discipline, and a cluster of values issues, Judy, foremost of which would be education and health care. When I go home to Indiana, I hear more about the cost of health care rising than I do about any other issue. And I think that addressing that needs to be a core part of the Democratic message also. WOODRUFF: Finally, Senator, you and the other members of your family safely got out of your house a couple of nights ago when it caught fire. How are you all doing? And what are you going to do about this?

BAYH: Well, Judy, thank you.

I may be the first member of the United States Senate to be a house-sitter at the same time. We're going to be out of our home for the next six to eight months, it looks like. But we're doing fine, thankfully. Susan and the boys are well. We got the kids out of the house.

And I'd say to all your viewers, check your smoke detectors to make sure the batteries are safe. That's what really saved us. Make sure your insurance premiums are up to date. And, most of all, hug your family, because you never know what can happen.

WOODRUFF: Boy, is that absolutely right. And I think a lot of people will be checking their smoke detectors after hearing you say that. It can happen to anybody.

BAYH: It sure can.

WOODRUFF: Senator Evan Bayh, thanks very much.

BAYH: Thank you.

WOODRUFF: Take care.

And now checking today's "Campaign News Daily": In the Michigan governor's race, a new poll shows the Democratic primary contest has tightened to a dead heat. The survey shows Attorney General Jennifer Granholm and former Governor Jim Blanchard both at 34 percent. Granholm is down 12 points from last month. Congressman David Bonior trails at 16 percent.

Tough guy actor Sonny Landham says he will run as a Republican in the Kentucky governor's race. Landham has played supporting roles in a number of films, including "Lockup, "Predator," and "48 Hours." Landham settled in Kentucky after an appeals court reversed his conviction on federal charges of making threatening and obscene calls to his former wife.

And in Minnesota: If Governor Jesse Ventura does indeed run for reelection, will he campaign via video games? The former wrestler's campaign committee is exploring the idea of distributing free computer games in which the governor presumably would put the heat on his opponents. And we want to be the first to see that when it comes out.

Our Candy Crowley will be along next to review President Bush's relationship with Muslims.

And speaking of international relations:

(BEGIN VIDEO CLIP) STEVE BRIDGES, COMEDIAN/IMPRESSIONIST: It's a pleasure to have you. Appreciate the French. Appreciate your people. You're good people.

UNIDENTIFIED MALE: (SPEAKING IN FRENCH)

BRIDGES: Yes, he's speaking French now. He's speaking some French. All right. Croissant.

(END VIDEO CLIP)

WOODRUFF: The language of laughter. That story is still ahead.

(COMMERCIAL BREAK)

WOODRUFF: A vote on a resolution in the House supporting Israel has been postponed at the request of the White House. A spokesman for Majority Whip Tom DeLay said the White House made the request and DeLay agreed. Secretary of State Colin Powell told House leaders yesterday that the administration would be uncomfortable with such resolutions, which could, he said, inflame the situation.

As the American Muslim Council holds its meetings today and in the next few days in Alexandria, Virginia, we want to look at relations between Americans and Muslims. It was during the presidential campaign that they were courted. After September the 11th, they were comforted.

Well, now the relationship between Muslim-Americans and the Bush administration has changed, as our Candy Crowley reports.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): You may not have noticed.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Church and charity, synagogue and mosque lend our communities their humanity.

CROWLEY: But to Muslim-Americans, a single word, mosque, meant the world.

IMAM JUHARI ABDUL MALIK, CHAPLAIN HOWARD UNIVERSITY: For my children to sit and watch and hear that the president understands that we are in America, and that we are not going anywhere, that we are a part of this country, was important.

CROWLEY: He was the first candidate to openly court Muslim- Americans. And surveys by national Muslim groups indicate George Bush won 70 percent of their vote. And then, in those early, angry post- 9/11 days, he won their hearts.

BUSH: Let me quote from the Koran itself: "In the long run, evil in the extreme will be the end of those who do evil."

MALIK: Coming to the mosque in Washington at the Islamic Center, and reading from the Koran, and saying that the Koran is a good book, that Islam is a good religion, that meant a lot to the community. And I believe it probably saved probably hundred, if not thousands of lives.

CROWLEY: It came in the worst of times, but it was the high point of the relationship between George Bush and Muslim-Americans. It may now be bordering on a new low: profiling; public raids; public arrests; months in jail for minor visa infractions; coercive, abusive behavior. Even supporters are reeling.

KHALED SAFFURI, ISLAMIC INSTITUTE: The incidence of the lady and her teenage daughter were handcuffed for several hours for doing nothing. The Department of Treasury claimed they resisted the searches. They said totally different stories. There is a story, the officer that told her, "We treat you better than police in your country." And the girl said, "I was born in this country."

CROWLEY: And it is not just deeds, but words. Earlier this year, Attorney General John Ashcroft was quoted as saying: "Islam is a religion in which God requires you to send your son to die for him. Christianity is a faith in which God sends his son to die for you." Justice says that does not accurately reflect the attorney general's views. But damage was done.

They understand that this post-9/11 world is a different place. But still...

SAFFURI: When you are under fire, when you are the ones that are being hit, it is very difficult for you to understand the circumstances.

(END VIDEOTAPE)

CROWLEY: Now, the Justice Department has a lengthy list of meetings it has held with Arab-Americans and Muslim-Americans in attempts to address their concerns. And, in the Islamic community, they do say that some of these stories may well be -- have taken on an urban-legend-sort of flavor.

Still, they cannot help but feel, they say, that the president who seemed so promising at the beginning now, at the moment, seems to have singled them out -- Judy.

WOODRUFF: All right, a very tough situation. Candy Crowley, thank you.

Many Europeans are horrified by a recent French election, but our Bill Schneider says it reminds him a recent American primary. He'll explain why when we come back.

(COMMERCIAL BREAK)

WOODRUFF: The results of Sunday's presidential primary in France sent shockwaves through Europe. Observers were left wondering how French voters could put ultraconservative Jean-Marie Le Pen into the run-off. Well, our senior political analyst, Bill Schneider, says there is actually a logical answer to that question -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: There is.

The question is: Are the fascists taking over France? That's what you might think from the reaction to the first round of French presidential elections this week. Well, you may be surprised to find out who really won those elections and who gets "Le Jeu Politique de la Semaine."

(BEGIN VIDEOTAPE)

(voice-over): For democracy to work, you have to be able to throw the bums out. But, in this year's race for president of France, the two leading candidates were both incumbents: President Jacques Chirac, a conservative, and Prime Minister Lionel Jospin, a socialist, and, a lot of voters thought, both bums.

They have been governing France together for five years now, in an arrangement the French call -- oh, those naughty French -- Cohabitation.

PHILIPPE MOREAU DEFARGES, POLITICAL ANALYST: And it's clear that the masters of the game in France are too old and they are not adapted to the present situation.

SCHNEIDER: The present situation is that French voters are worried about crime. So, what's a disgruntled voter to do? Look at the results of last Sunday's primary. Chirac came in first with just 20 percent of the vote, hardly a vote of confidence in the incumbent. Jospin came in third with 16 percent.

LIONEL JOSPIN, FRENCH PRIME MINISTER (through translator): I am going to retire from political life.

SCHNEIDER: The sensation was the second-place finisher, who now goes into the May 5 run-off: Jean-Marie Le Pen, an unsavory character from the extreme right, with a reputation for bigotry. Europe was outraged.

Remember how shocked Americans were when Pat Buchanan won the New Hampshire primary in 1996?

(BEGIN VIDEO CLIP, 1996)

PAT BUCHANAN (R), PRESIDENTIAL CANDIDATE: Mount up, everybody, and ride to the sound of the guns!

(END VIDEO CLIP)

SCHNEIDER: Imagine if Pat Buchanan had won the Republican nomination. Now you understand how many French people feel.

But the real winner was not Le Pen. His 17 percent showing was only a couple of points better than he did the last two times he ran. The big winner was the record 28 percent of French voters who abstained, a lot more than voted for any candidate. The abstainers threw the system into turmoil. And they made their point: A choice between two discredited incumbents and a bunch of extremists is no choice at all.

That's the message and the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: The polls predicted Chirac and Jospin would go into the runoff. What French voters said on Sunday, many by refusing to vote, was: "Give us better choices."

Can you say that in French?

(LAUGHTER)

WOODRUFF: No. I know French, but not well enough. I sort of say (SPEAKING IN FRENCH), but that's not it.

SCHNEIDER: (SPEAKING IN FRENCH)

WOODRUFF: (SPEAKING IN FRENCH)

SCHNEIDER: (SPEAKING IN FRENCH)

WOODRUFF: (SPEAKING IN FRENCH) Schneider.

We better stop while we're ahead.

(LAUGHTER)

WOODRUFF: Well, now for a more detailed look Bill's "Play of the Week," you can go to CNN.com/INSIDEPOLITICS. And while you're there, send us your ideas and opinions about the program.

More INSIDE POLITICS ahead: What's wrong with this picture? Keep those eyes open and stay tuned.

But, first, Wolf is here with a look at what's coming up on "WOLF BLITZER REPORTS" -- Wolf.

WOLF BLITZER, "WOLF BLITZER REPORTS": Thank you very much, Judy.

Coming up, we'll take you to the scene of one of the worst school shootings. And we'll also report -- follow up on that report that a cardinal may be replaced. Also, a CNN exclusive: tapes of a confession that appear damaging to an ex-NBA star. We'll also follow up on Matthew Chance, CNN's Matthew Chance. He got caught in the violence in Ramallah. Look at that.

It's all coming up right at the top of the hour right after INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Finally, I was at the White House earlier today, or close to it. And watch this.

(BEGIN VIDEOTAPE)

BRIDGES: It is a beautiful day. Just can't beat this weather. Good morning. Good morning. How are you? How are you? Good to see you. Good to see you. How are you?

Everybody smile. Smile like you're happy. That's right. Say "economic recovery."

(LAUGHTER)

BRIDGES: Look at this man. Hardworking, huh? That's right. Yes. He ain't buying it right here. He ain't buying it.

How are you, sir?

UNIDENTIFIED MALE: We're great.

BRIDGES: Good. Good.

UNIDENTIFIED MALE: How are you?

BRIDGES: Good. I'm good. Good to see you. How are you?

UNIDENTIFIED MALE: God bless you.

BRIDGES: Good to see you. God bless you.

UNIDENTIFIED MALE: Keep up the good work.

BRIDGES: You betcha. You betcha.

Good to see you. Good to see you here. How are you, sir?

WOODRUFF: All right, so we are walking through Lafayette Park on our way to do an interview. And we happen upon the president of the United States.

Mr. President, it is an honor to see you.

BRIDGES: Well, Judy, it's a pleasure to see you. Let's just shake on it. I appreciate you. I see you there on television. And you do an excellent job.

WOODRUFF: Thank you.

You know, it is extraordinary that you would have the time, with all the responsibilities you have, to actually take a walk in the park across the street from the White House.

BRIDGES: Well, I like to do that. I like to jog. I like to jog about three miles a day, have a good breakfast. And every now and then, I just get an itch to walk. And I like to get out here and say hey to the folks and meet the folks here in D.C. WOODRUFF: Well, you know, yesterday you were in Texas at the ranch. Of course, you were meeting with the crown prince of Saudi Arabia.

BRIDGES: Right.

WOODRUFF: Tell us about your meeting with Crown Prince Abdullah.

BRIDGES: Well, we had a good meeting. We did. We had a good Texas barbecue. He liked that. He had his barbecue sauce everywhere. We had a good time. And we talked about the Middle East. And we had a good time. He liked Crawford, Texas. He said it was a nice little town. He did. The problem is, I think he wanted to buy it.

(LAUGHTER)

WOODRUFF: All right, now, tell us about your Middle East policy. You and I were just discussing that.

BRIDGES: Well, Judy, I've been criticized about some inconsistencies. And I want to clear that up. I do. I want to clear it up right here and clear it up right now.

But, before I do, I just want to ask you, do you have any ideas?

(LAUGHTER)

BRIDGES: I'm stumped. This is a tough one.

See, Judy, I want to bring people together. That is what I want to do. I really do. That's where my heart is. I want to take everybody from New York and California and just shove them into Oklahoma.

(LAUGHTER)

WOODRUFF: All right.

BRIDGES: Just bring the two of them together just like that. That's what I want to do. That's where my heart is, yes. So, I'm excited.

WOODRUFF: Well, Mr. President, it is really a treat to talk to you. And, of course, Mr. President is Steve Bridges, who is a comedian who has done an extraordinary job of transforming yourself into George W. Bush.

How do you go about doing that? What happens?

BRIDGES: Well, when he started to run for office, I immediately started working on the voice, I mean, right away, just watching television and getting the mannerisms down, because it is the most recognizable character, the most recognizable person, really, in the world.

And you can do a great impression of somebody, but unless people know who it is, it doesn't make any difference. And everybody knows the president. And, as you pan around, you see.

WOODRUFF: All right, if you could say one thing to these people, Mr. President, what would you want them to know?

BRIDGES: If I were to say one thing, Judy, one thing I would say: "That money in your pocket, get it out of there and let's stimulate this economy. Let's get it going." That's what I'd say. "You're doing a good job. God bless you. God bless you all. And God bless the United States of America."

(END VIDEOTAPE)

WOODRUFF: President Bush -- err, Steve Bridges at the White House today.

Now on to "WOLF BLITZER REPORTS."

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