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CNN INSIDE POLITICS

Will the Pledge be Upheld as Unconstitutional?; Supreme Court Approves School Vouchers; Will Congress Give Seniors Prescription Drug Benefits?

Aired June 27, 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. The sparks still are flying after a court ruling against the Pledge of Allegiance. Are the judges behind the decision as out of step as their critics claim?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm Bill Schneider in Washington. That appeals court may have overruled the phrase "under God," but the Almighty is quite a player in our public life.

KATHY SLOBOGIN, CNN CORRESPONDENT: I'm Kathy Slobogin at the U.S. Supreme Court, where the justices have handed President Bush and other supporters of school vouchers a victory.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow on Capitol Hill. As the House moves toward another vote on a prescription drug benefit, why is it that seniors still might not get a break?

WOODRUFF: Thank you for joining us. The U.S. Supreme Court issued two major rulings today affecting the nation's schools. But many Americans are still seeing red over a lower court decision that is widely expected to be overturned.

On this day after that decision declaring the Pledge of Allegiance unconstitutional, the condemnation still is coming from virtually all political quarters.

(BEGIN VIDEOTAPE)

(voice-over): In Canada for the G-8 summit, President Bush suggested the judges lacked common sense, and that despite the separation of church and state, God belongs in our civic life.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America is a nation that -- is a nation that values a relationship with an almighty. The declaration of god in the Pledge of Allegiance doesn't violate rights. As a matter of fact, it's a confirmation of the fact that we received our rights from God, as proclaimed in our Declaration of Independence.

WOODRUFF: At the U.S. Capitol, members of the House and Senate stood today to speak the pledge, "under God" included. Across the country, most people said they thought the court decision went too far.

UNIDENTIFIED FEMALE: I think they should be able to recite it, you know. If the child doesn't want to, so be it, let them sit down. But the other ones, sure.

UNIDENTIFIED MALE: It's obvious to me that there is a god. And just by making it pretty much general -- saying god and not specifying on a belief -- I don't think that's a problem at all.

WOODRUFF: But there were some dissenting voices.

UNIDENTIFIED MALE: I agree with the court decision, actually. I think parents and students, as they get older, have the right to select whether or not they want to participate in saying the Pledge of Allegiance.

WOODRUFF: A soldier CNN interviewed in Afghanistan said she opposed the court decision.

UNIDENTIFIED FEMALE: I feel that this is a part of our history and no one has the right to change it.

WOODRUFF: But she also said she thought the whole debate was a little -- quote -- "silly," given the serious problems facing America. The man who successfully sued to keep his daughter from having to recite the pledge was undaunted by the widespread condemnation, especially from Washington.

MICHAEL NEWDOW, PLAINTIFF: They're politicians, and they know that 93 percent of the country believes in God. And if you want to get votes, you sometimes avoid the Constitution and you go for political power.

(END VIDEOTAPE)

WOODRUFF: A short while ago, the Senate weighed in on this issue again, reaffirming its support for the "under God" phrase added to the Pledge of Allegiance in 1954.

The pledge ruling has shined a harsh spotlight on the Ninth Circuit Court of Appeals in California -- a court decried by critics as an out of touch bastion of liberalism. Let's bring in CNN's legal analyst, Jeffrey Toobin.

Jeffrey, tell us, geographically, where is this court? What states are we talking about?

JEFFREY TOOBIN, CNN LEGAL ANALYST: It's really the nine westernmost states of the United States. The court is based in Sacramento and south San Francisco, California. It's the biggest geographical district of the 12 circuits. And it's historically been the most liberal. And it's historically, at least for the last generation or so, been the court most likely to be reversed by the United States Supreme Court. WOODRUFF: In what way?

TOOBIN: Well, they have been in virtually every part of contemporary jurisprudence, whether it's prisoners' rights, whether it's criminal law, the rights of defendants, whether it's separation of church and state. They have been more liberal. They have ruled to the left, in ways that the United States Supreme Court has slapped down.

WOODRUFF: There are a number of other judges, obviously. This was a three-judge panel that handed down this ruling. Is it possible that the Ninth Circuit itself could reverse this ruling?

TOOBIN: It's very possible. I'd say it's even likely. The two judges who were in the majority here -- remember this was a three- judge panel and it was a 2-1 vote -- are among the more liberal appointees. Certainly Judge Reinhardt, who didn't write the opinion but was the second vote for the opinion, is known as perhaps the most liberal vote on the court.

Judge Goodwin, who was a Nixon appointee, is also known as a liberal judge, notwithstanding the fact that he was appointed by Richard Nixon. They are often in the minority, even in the Ninth Circuit. So I think the odds are very likely that this will be reversed before it even gets to the United States Supreme Court.

WOODRUFF: Jeff, how do you compare this Ninth circuit court with other circuits around the country? The Fourth, for example, which is seen as much more conservative.

TOOBIN: You know, one of the funny things about these circuit courts is it's very much the luck of the draw under whose presidency do vacancies occur. In the Ninth Circuit there were a lot of vacancies, as it happened, during the presidency of Jimmy Carter.

Jimmy Carter appointed a lot of liberal judges, like Judge Reinhardt. And in fact, Carter appointed many more liberal judges than Bill Clinton did in the Fourth Circuit and in the D.C. circuit, which are -- on the screen there is the Fourth Circuit, which is based in Richmond.

You have vacancies that came up overwhelmingly during the presidency of Ronald Reagan and the first George Bush. They didn't even have a black judge until this year. So it's very much the luck of the draw, which president appoints them.

WOODRUFF: That's just one more reminder of just how powerful presidents can be, in appointing these judges. All right, Jeffrey, we're going to let you go but we're going to bring you back in just a minute, because there were some other rulings today that we want to ask you about.

Now we want to move on to the U.S. Supreme Court and a ruling on an issue that has generated a lot of political debate. In a 5-4 decision today, the justices upheld a school voucher program in Cleveland. That program uses taxpayer money to help poor people send their children to private or religious schools. The court said the program does not violate the separation of church and state.

(BEGIN VIDEO CLIP)

CLINT BOLICK, INSTITUTE FOR JUSTICE: This is a huge decision. It's the most important education case since Brown versus Board of Education. It's a great day for schoolchildren all across America, especially in Cleveland. This was the Super Bowl for school choice and the kids won.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BARRY LYNN, AMERICANS UNITED FOR THE SEPARATION OF CHURCH & STATE: This is probably the worst church-state case in the last 50 years. It really brings a wrecking ball to the part of the wall of separation between church and state, regarding funding of private religious schools. I don't know what country these justices are living in.

(END VIDEO CLIP)

WOODRUFF: President Bush is calling a ruling a victory for the American family. For a closer look at the program that's at the center of this case, here is CNN's Kathy Slobogin.

(BEGIN VIDEOTAPE)

SLOBOGIN (voice-over): This is what the fuss is all about. Taxpayer dollars pay the tuition for more than half the students at this Catholic school.

SCHOOLCHILDREN: In the name of the father, and the son and in the holy spirit, amen.

SLOBOGIN: Ninety-nine percent of the voucher students in Cleveland go to religious schools. It wasn't intended to be that way, but very few nonreligious private schools participate in the program, or have tuitions the $2,500 state voucher can cover. Sister Karen, principal of St. Francis, says parents choose her school for its brand of education, not its brand of religion.

SISTER KAREN, PRINCIPAL, ST. FRANCIS SCHOOL: We have 20 children out of our 260 children who are Catholic. So we're not here to make more Catholics. That's not our purpose. We're here to educate children with a moral base.

UNIDENTIFIED FEMALE: Does anyone know what the first commandment is?

SLOBOGIN: That means half-hour religion class every day, tailored to the students' eclectic mix of faith, but nevertheless, religion. Parents here seem hungry for a moral dimension they feel they can't get in public schools.

VICTORIA POPE, VOUCHER PARENT: They encourage the things that I'm trying to teach them at home. It gets reinforced here.

SLOBOGIN: For Sister Karen, the fight over church and state misses the point.

SISTER KAREN: I think it's about children. I think it's about education. I think it's about parent choice.

SLOBOGIN: For Linda Hartwick, principal at a public school just over a mile away, it's about money.

LINDA HARTWICK, PRINCIPAL, FOREST HILL PARKWAY ACADEMY: Less students, less money.

SCHOOLCHILDREN (singing): My eyes are looking forward, I'm standing straight and tall, my hands are on my shoulder and I'm ready for the hall.

SLOBOGIN: Hartwick's school is a model school. But they scramble for every dollar. It doesn't help struggling inner-city schools, say educators here, to have state aid diverted to private schools -- private schools that, unlike public schools, can throw out any student who doesn't measure up.

HARTWICK: And when they are let go from the voucher schools, where do they come? They come to the public schools.

SLOBOGIN: Despite the odds, Cleveland public schools may be doing a better job than many voucher parents think.

(END VIDEOTAPE)

SLOBOGIN: When evaluators compared the academic performance of voucher students to those in public schools, they found there really wasn't any difference. Now, the whole point of the voucher program was to offer poor children a way out of failing schools. Today's court decision ends the legal debate. But the argument over whether vouchers really help schoolchildren is far from over -- Judy.

WOODRUFF: All right. Kathy Slobogin at the U.S. Supreme Court. Thanks, Kathy.

Well, meantime, our new poll suggests that Americans will be divided over the Supreme Court ruling on school vouchers. Forty-three percent of those surveyed favor, they say, using government money to help children attend religious schools. But 54 percent say they're opposed.

The public is likely to be more supportive of another high court ruling today allowing random drug testing for students in extracurricular activities, not just for athletes. Our new poll shows 70 percent of Americans say school districts should be allowed to test students for drugs before they can participate in nonathletic activities.

Now let's bring back our legal analyst, Jeffrey Toobin. Jeffrey, we just heard Kathy say that the legal angles of the ruling on school vouchers, pretty much are settled here.

TOOBIN: They really are. But it's important to emphasize that the political battle is far from over. This is obviously a centerpiece of President Bush's plans for education. And this is of course a big victory for him.

But it's worth remembering that in 2000, voters in California and in Michigan voted down these kind of voucher programs. The school -- the teachers unions, which are very powerful players in our politics, are devoted to beating these ideas back. And this battle will continue in a different form. It's now closed as a legal issue, but the politics remain wide open.

WOODRUFF: Now, Jeffrey, the other ruling today permitting random drug testing for students, even if they're not athletes, even if they're just participating in the school band, this builds on earlier decisions. What kind of precedent does it set, though?

TOOBIN: Well, this is how the Supreme Court often works, sort of in a gradual way. The decision seven years ago said it was OK to have random drug testing of student athletes. Now we have all extracurricular activities.

The interesting question will be, will the court approve random drug testing of high school students, period? Because as I read the opinion, there is really not much in the way of limitation that the justices -- at least the five in the majority, seem to think that these are relatively minimal intrusions in privacy, that the government has a strong interest in students being drug free. So the move to random drug testing of all high school students in public schools seems likely to be approved by the justices eventually, if and when that case gets to them.

WOODRUFF: You're right, this seems to be a pretty comprehensive ruling. All right, Jeffrey Toobin, thanks very much.

TOOBIN: OK, Judy.

WOODRUFF: With so many legal rulings affecting American schools, we're going to talk next on INSIDE POLITICS with Education Secretary Rod Paige. He'll go on the record about drug testing, vouchers and the Pledge of Allegiance.

Are Californians laughing at Governor Gray Davis' expense? We'll look at a new ad that mocks Davis and discuss the troubles with his reelection bid.

And later, we'll return to the pledge and how Americans use God's name in daily life.

(COMMERCIAL BREAK)

WOODRUFF: Three of today's biggest stories affect the public schools: the Pledge of Allegiance, drug testing and school vouchers. U.S. Education Secretary Rod Paige is with us now from Capitol Hill to go "On the Record" about these issues. Mr. Secretary, thank you for being with us. I want to ask you first about the school voucher ruling. We know you like it, the president likes it. You both put out statements about it. But what about the comments from critics that, to support vouchers from private schools takes money away from public schools?

ROD PAIGE, EDUCATION SECRETARY: We hear that a lot. But I think that's completely without foundation. There's no evidence that that happens.

In fact, the evidence would suggest that public schools are benefited by the competition. There's a charter school study that shows where students left to go to charter schools, the public schools responded by getting better. That's exactly what's going to happen this time.

WOODRUFF: Does the Bush administration now plan do you expect, to go ahead and try to get congressional approval for further federal fundings of this kind?

PAIGE: Our emphasis right now is on the implementation of HR1, the no child left behind act, which has considerable choice in it.

WOODRUFF: But are there any plans, I guess is what I'm asking, on the administration's agenda, to try to promote any sort of voucher program?

PAIGE: We think these kinds of programs would be a necessary condition for our public school reform. And by the way, it should be clear that what we're trying to accomplish here is reform of public schools. And we think this is a step in the right direction.

We don't have any specific plans right now. But we don't want to foreclose any opportunities to improve public schools.

WOODRUFF: I hear you saying that. And yet, we hear the head of the National Education Association is saying that by taking money away from the public schools, how do you then turn around and expect the public schools to improve?

PAIGE: Well, what you hear is a focus on the structure of the schools. Our focus is on the child. We want the child to learn. And we know because of evidence that -- plus, I'm not just whistling Dixie at this. I've had seven years of experience of managing one of the nation's largest public school systems. And I saw it function the other way. I saw the schools in Houston grow because of the choice opportunities we have here.

WOODRUFF: Mr. Secretary, I also want to ask you about the Supreme Court, the other Supreme Court ruling today, supporting random drug testing for students -- not athletes, but those in any extracurricular activities. We already now have critics saying this opens the door to any sorts of invasions of privacy on the part of junior high and high school students.

PAIGE: We certainly receive with glee the Supreme Court's ruling on random drug tests for our students that are involved in activities in schools, including activities like band and choir and other activities like that. We think that too is a step in the right direction.

WOODRUFF: What makes you think students in the band or students in choir are students who are susceptible to drug use?

PAIGE: We don't think they're any more susceptible than any other students. We have -- susceptibility is not the issue right here right now. The issue is, those students who are representing the school in activities should be subject -- there should be some assurance that they are drug free.

WOODRUFF: Should any students be sheltered from these kinds of random drug tests, do you think?

PAIGE: Well, that's something to be considered. I don't know if I want to go on the record supporting that right now. But I guess maybe I would say that I think all students should be subject to random drug tests.

WOODRUFF: Let me finally turn to...

PAIGE: By the way, Judy, not only students. I think that those of us who are in kind of activities we're in should be, as well.

WOODRUFF: Let me also ask you, Mr. Secretary, about the Ninth Circuit Court of Appeals ruling yesterday, that the Pledge of Allegiance is unconstitutional because of the words "under God," that it's a violation of the separation of church and state.

Now that this ruling has been handed down, for the time being, the states that are under the Ninth Circuit jurisdiction are no longer permitted to say the pledge, or to say the pledge with those words. Is your department now going to give guidance to the schools in these states, as to how they deal with this?

PAIGE: Well, the schools in the states should obey the law. We can't take a position where the law should not be obeyed. But we would hope for an early overturning of that ruling.

WOODRUFF: On what ground?

PAIGE: On the grounds that we think that that's a reading of the Constitution that's unwarranted.

WOODRUFF: All right, Secretary of Education Rod Paige. And I'm going to ask you to stand by as I read to our audience an Associated Press wire that's just been handed to me out of San Francisco. And that is, one of the federal appeals court judges who declared the Pledge of Allegiance unconstitutional has today -- quote -- "blocked his own ruling from being enforced."

Now, we don't have any more information beyond that. We don't know which of the two judges who signed on to this ruling yesterday, the Ninth Circuit out of San Francisco, this is. That's all we know. But clearly this is something we're going to be following. An intriguing development, one day after that appeals court ruled that the Pledge of Allegiance is unconstitutional.

Mr. Secretary, did you want to comment on that?

PAIGE: Well, no. I think that that's very interesting. But we are a nation of laws. This is a way we interpret our laws. But it does call into question the kinds of -- the thinking of some of the judges we have in positions like that. And that is one of the reasons why I would encourage the Senate to move forward on the president's appointments.

WOODRUFF: All right, Secretary of Education Rod Paige, thank you very much. Good to see you.

PAIGE: Thank you.

WOODRUFF: Thanks.

Straight ahead, taking issue over "under God." Bay Buchanan and Donna Brazile have their say on the Pledge of Allegiance controversy. That and more, coming up.

(COMMERCIAL BREAK)

WOODRUFF: Breaking news just developing. The San Francisco Bay appeals court judge who wrote the ruling yesterday handed down declaring the Pledge of Allegiance unconstitutional because of the words "under God" has just now staid his own decision, saying that it may not be enforced.

Judge Alfred Goodwin just moments ago, the Associated Press is reporting, has staid his own decision, which means the ruling that he and another judge handed down in a 2-1 decision out of the Ninth Circuit in California, will not be enforced. This information just coming in to CNN just in the last few minutes. As soon as we get more on it, we will share it with you.

Meantime, the Federal Aviation Administration is banning flights near the Statue of Liberty, Mount Rushmore and the St. Louis gateway arch during the July Fourth holiday. Concern over possible terror attacks against the national landmarks is behind this ban. For the Statue of Liberty, the ban started Tuesday and runs through September 30.

Meantime, U.S. and Indonesian sources say police in that country have arrested an important al Qaeda figure. Sources in Washington describe Kuwaiti national Omar al-Farooq as a significant fund raiser for the terrorist network. He was arrested on June the 5th.

With us now, former Gore campaign manager Donna Brazile and Bay Buchanan. She's the president of American Cause.

Well, as you're hearing, Bay and Donna, the judge who wrote this opinion yesterday that has half the country up in arms is now saying, I'm taking it back. What are we to make of this, Bay, Donna? BAY BUCHANAN, AMERICAN CAUSE: I can tell you now, Judy, you said half the country is up in arms. I think the whole country is up in arms, across the board. This is an outrageous decision. I think there's been a number of phone calls probably been placed here to inform him that this is probably not the best battleground for a liberal agenda. And he's done the right thing and staid this so the kids don't pay the price.

DONNA BRAZILE, FMR. GORE CAMPAIGN MANAGER: Well, I believe it's Judge Goodwin, who is a Republican nominee, not a liberal Democratic nominee. But look, I guess some people go to bed at night and say, "God lay me down," and when this judge remembered he had to use the word "god," perhaps some light bells went on his head.

The pledge is a fabric of our life and I'm glad that the Congress is moving swiftly to do something about this.

BUCHANAN: But you know, what this really tells us, to even believe that it had gotten this far really does show, Judy, what we have allowed this radical liberal agenda to push us so far. And it's as much the responsibility of the traditionalists in this country. We have been so intimated that we have not really pushed back. And I think this is an opportunity to say we not only want that pledge back in there. We want prayer back in there and we want the 10 Commandments in there and we're not going to take it anymore.

BRAZILE: I don't think this has anything to do with radical liberals or radical conservatives. This is somebody who clearly wasn't thinking right when he made this decision.

BUCHANAN: Well, who took this to trial? It was yours friends, not mine.

BRAZILE: Not mine. I'm not an atheist, last time I...

(LAUGHTER)

BUCHANAN: Fair enough. But the ACLU are your friends.

BRAZILE: They did not take this to trial. The ACLU did not have anything to do with this. Although they applauded the ruling today, they did not have anything to do with it. This came from a concerned parent who thought his child should not have to recite "under God." And I disagree. And I think most Americans would disagree with that.

WOODRUFF: All right, we're moving on.

We also have this ruling today from the Supreme Court saying public school vouchers, given to parents whose kids were in public school to allow them to attend private schools, it's OK. There's not a problem with separation of church and state. Where do we go from here on this?

BUCHANAN: This is an excellent decision. It is superb, for two reasons. First of all, it is going to give competition to those public schools. It has been brought upon the public schools because of the terrible performance they have put on in the last couple years. The education has become secondary to a social experiment in these schools. And so it's really good from that point of view. But the decision said the money goes to the parents. And that's why it is not unconstitutional. That is key, because now it is less likely the government is going to get into the back door of the private and religious schools.

BRAZILE: Bay, this was bad public policy.

And President Bush this year, in the Rose Garden ceremony, where the Democrats as well as Republicans said the federal government has a new role in public education -- we are going to hold people accountable. Private schools are not held accountable to the same standards that public schools are held. Public schools are held the higher standards in terms of testing students, in terms of licensing teachers, opening up schools to all students, making sure that schools who are disabled, who are slow learners -- our public school are improving. They are leading the way and helping to bring about new standards. And we should support our public schools.

BUCHANAN: Why is it, then, that parent don't want their kids going to the public school, but want them to go the private and religious schools? Why is that? Because they teach morals and they teach uplifting ideas and they teach the history of the country as the parents want.

The competition is there that is being brought upon because the public school has failed the children and the parents.

BRAZILE: And you know there is no proof right now that those schools in Cleveland have done anything to improve testing.

BUCHANAN: But the parents are happy.

BRAZILE: Look, 33 percent of the students who are using those vouchers were already enrolled in private schools. And so they're just picking up a subsidy and draining $40 million from the Cleveland public school system, a school that desperately needs federal resources as well as state resources.

BUCHANAN: You know -- go ahead, Judy.

WOODRUFF: All right, quickly to one other question, and that is, the Pew Research Center putting out a poll today showing there has been somewhat of a shift in the last few months in the public's view of the president's handling of the economy. A few months ago: the public evenly split, the president is doing a good job, maybe not doing a good enough job on the economy. Now, by 2-1, people saying the president should be doing more about the economy.

BRAZILE: Kitchen-table issues I think will drive voters to go out in massive numbers and replace some of these politicians who are not focusing on the economy, on jobs, on health care, on the environment. And I think it's time that Congress stopped diddling around and passed serious legislation that could help our economy, and not just these little tax breaks for the wealthy.

BUCHANAN: You know, Judy, if you look at the whole poll, there is 70 percent approval rating for the president. He's got 53 percent approval rating on the economy. It's in one area they think maybe he should be doing more. If all he did was three or four events around the country on this issue, the polls would turn around, because it's perception. I think if you look at that poll, you see the president is strong. Congress is what's weak. And I think that's where you're going to have real

(CROSSTALK)

WOODRUFF: You're saying this is not a deeply-held...

BUCHANAN: Absolutely not; 53 percent the president is on the economy, his approval of the people.

BRAZILE: Look, I'll tell you this. If we don't focus on jobs, some of these politicians will lose their job in 2002 and 2004.

BUCHANAN: I'm all for that.

(LAUGHTER)

WOODRUFF: Glad you both have a job working with us.

BRAZILE: Thank you. Thank you.

WOODRUFF: All right, Donna and Bay, thank you both. Good to see you. Appreciate it.

BUCHANAN: Good to see you.

WOODRUFF: Up next: the "Inside Buzz" on Congressman J.C. Watts' big announcement. Also ahead, our Bob Novak has the inside story on how Rudy Giuliani is raking in big bucks.

(COMMERCIAL BREAK)

WOODRUFF: Sources tell our Kate Snow that Congressman J.C. Watts is scheduled to make a much-anticipated announcement about his political future on Monday in his home state of Oklahoma. It's not yet clear whether he will stay or leave his post as fourth-ranking Republican in the House. Associates say Watts truly has been struggling with the decision. His chief of staff says -- quote -- "This is not just some sort of mental exercise for him. This is a really sober decision."

House Speaker Dennis Hastert and Majority Whip Tom DeLay have asked Watts to stay on. But other colleagues say they are tired of hearing Watts complain that he's unhappy. One GOP leader indicated that he would not try to sway Watts, saying -- quote -- "I not going to make myself available for more pouting" -- end quote.

Well, here now with some "Inside Buzz," more "Inside Buzz": our own Bob Novak.

And the first thing is, eyes glaze over when you mention the debt ceiling, but it is a story today.

ROBERT NOVAK, CNN POLITICAL ANALYST: Well, they wouldn't glaze over if people aren't getting their Social Security checks because the debt limit has not been raised.

There's going to be a big story breaking almost instantly. And that is, the House Republican leadership has about 99 percent decided to succumb to pressure from the White House and the Treasury and put in a debt ceiling raising bill, stand-alone bill. That's what the Democrats have insisted on. The Senate has passed it. The White House wanted it. The House Republican leadership wanted to bury it in an appropriations bill.

That had created a standoff. And what I am told, there is a lot of suspicion, at least, that Secretary of the Treasury Paul O'Neill says he just cannot do the finagling and the juggling of numbers that will be necessary to avoid the debt limit, if the Congress went home for the Fourth of July without doing this. So, Judy, tonight, the House will pass a debt-limit bill, stand-alone bill.

WOODRUFF: In just a few words, why is that so important to the administration?

NOVAK: Because it is absolutely necessary that the United States not default on its debt. And we would be in danger of defaulting if we sent out the Social Security checks without authorization to borrow money.

WOODRUFF: Quickly to a different story: a popular Democrat in the House dropping out of Congress. What are the repercussions?

NOVAK: Congressman John LaFalce announced yesterday -- Democrat from Buffalo -- not running again. The repercussions are that the top Democrat on the House Financial Services Committee, which regulates the banking industry, would be Barney Frank of Massachusetts. And the Republican fund-raisers are having a field day with bankers, who like to give money to Democrats. And Republicans say don't give money to Democrats. If Democrats win the House, Barney Frank, one of the most liberal members of Congress, will be regulating the banking industry.

WOODRUFF: Different story: Rudy Giuliani out there making money.

NOVAK: They are putting flyers out: "Rudy, America's Mayor." I bet you didn't know he was America's mayor.

This is for an event in Indianapolis September 4. You can pay $95 to hear Rudy. Besides that, they have a corporate sponsorship by Eli Lilly, the big drug company from Indianapolis. After all, Rudy is getting $100,000 a crack for these speeches, so somebody has got to pay for it.

WOODRUFF: Right up there with former President Clinton.

Last but not least, the energy bill, we haven't heard much about it lately. Where does that stand?

NOVAK: Believe it or not, today they started the Senate-House conference to resolve the different versions of the energy bill, House and Senate very different. And guess what? They're on television. I've never heard of a Senate-House conference on television. It's not big-time television, but it's going to be rebroadcast on C-SPAN, a couple presidential candidates, 61 members of that conference.

Can you imagine how hard it is going to be to get anything done when they see those television cameras there?

WOODRUFF: All right, Bob Novak, we always learn about it first from you. Thanks very much. Appreciate it.

NOVAK: Thank you.

WOODRUFF: And now checking the headlines in our "Campaign News Daily": Massachusetts gubernatorial candidate Mitt Romney is out with a new ad billing him as the man who cleaned up the Olympic Games. The statewide spot goes on to say that Romney will clean up the mess in Massachusetts' government. It's Romney's first ad since the state board threw out a Democrat challenge to the Republican's residency status two days ago.

In California, a newly released poll shows Governor Gray Davis' job-approval rating is lower than it has been at any time in almost two years. The survey shows 39 percent of Californians approve of the way the Democrat is handling his job as governor; 52 percent disapprove. Davis' Republican rival, Bill Simon, is even trying to put an even bigger dent in the governor's ratings with new statewide ads attacking Davis' fund-raising practices.

(BEGIN VIDEO CLIP, SIMON CAMPAIGN AD)

UNIDENTIFIED ACTRESS: Next we do the governor's office.

UNIDENTIFIED ACTRESS: What's this, Sue?

UNIDENTIFIED ACTRESS: Oh, leave that be. That's how things work around here.

UNIDENTIFIED ACTRESS: Why so much money?

UNIDENTIFIED ACTRESS: Well, that's Governor Davis. All he ever does is fund-raise for his campaign.

(END VIDEO CLIP)

WOODRUFF: A second Simon ad shows a receptionist refusing to permit people to see Governor Davis unless they fork over money.

Straight ahead, we'll bring you up to date on that news that came out just minutes ago: the judge who wrote the opinion out of the federal Appeals Court in California declaring the Pledge of Allegiance unconstitutional, the judge who wrote the opinion now saying he will stay the decision. It will not be enforced. We're trying to get more information. We'll bring that to you as soon as we get it.

Also coming up, CNN's Bill Schneider tells us where God and government intersect. Plus, lawmakers on Capitol Hill talk a lot about prescription-drug coverage for seniors, but will they do anything about it?

Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: The headline at this hour: One day after a federal Appeals Court judge in California handed down a ruling saying the Pledge of Allegiance is unconstitutional because of the words "under God," that same judge has issued a stay, saying that his own opinion will not be enforced.

Judge Alfred Goodwin, who was a Nixon appointee, has -- all we know at this point is, he issued a stay, pending further appeals. The decision that came down yesterday was made by a three-judge panel in a 2-1 ruling. The full court in the Ninth Federal Circuit has yet to consider this matter. We know that school officials where the lawsuit began have already vowed to appeal the ruling. So, the latest is, the judge who wrote the opinion is saying that it will be stayed at this point.

Well, meantime, the phrase "under God" in the Pledge of Allegiance is not the only way, we know, that God is invoked in public life. The question is: Are there chinks in the wall between church and state?

Our Bill Schneider has been thinking about that.

(BEGIN VIDEOTAPE)

SCHNEIDER: God is certainly a player in American public life, nonpartisan, we believe. But where does God's role come from? And what does it mean? Let's attacks some questions about God.

Question: Is God mentioned in the United States Constitution? Answer: no, not once. Religion is mentioned in the First Amendment, which says: "Congress shall make no law respecting an establishment of religion or prohibiting free exercise thereof." That's it. But it's a lot.

Does the Supreme Court recognize a supreme being? Yes. Records going back to 1820s show the marshal opening every session of the Supreme Court with the phrase, "God save the United States and this honorable court." The phrase, inherited from the British, was likely used even earlier.

When did "In God we trust" start appearing on our money? It started appearing on coins during the Civil War. President Teddy Roosevelt didn't like the idea of mixing God and money. But after a public outcry, he changed his mind and signed a bill requiring "In God we trust" to appear on all coins. The phrase didn't get on to folding money until the Cold War. Congress declared "In God we trust" the national motto in 1956. And it has appeared on all paper currency since 1957.

Now, let's go back to Inauguration Day.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: So help me God.

SCHNEIDER: Is that part of the oath in the Constitution? Answer: No. The phrase, "So help me God," is added by the new president. The oath specified in the Constitution does not mention God. The Constitution doesn't require that the oath be taken on a Bible either.

So, what meaning does God have in American public life? Generic religion plays a central role, including belief in a supreme being. Americans say they would have no problem voting for a president who was black, Catholic, female, or even homosexual. But an atheist? Most Americans have trouble with that.

Americans believe religion and God should be a part of their public life. In fact, they should be honored, as long as no particular religion is favored. Americans believe in the separation between church and state, not between God and state -- Judy.

(END VIDEOTAPE)

WOODRUFF: Bill Schneider, thanks very much.

In her race to win reelection, Senator Susan Collins of Maine would already win the good-timing award, if there was one. The first TV ad in the Republican incumbent's campaign starts airing Friday. The spot was produced well before yesterday's Court of Appeals decision, but it shows her and a group of school children reciting the Pledge of Allegiance.

A cliffhanger appears to be in the works in the House. Up next: Will Congress help seniors pay for costly prescription drugs? Our Kate Snow looks at the political wrangling, as a vote comes close.

(COMMERCIAL BREAK)

WOODRUFF: This story just in to CNN: A judge in California has denied a request by actor Robert Blake that he be released from jail with bail. But the judge in the case said that he will keep an open mind. Blake is accused in the murder of his wife, Bonny Lee Bakley. She was murdered in May of last year.

Politicians here in Washington have been promising for some time to do more to help senator citizens pay for prescription drugs. Well, the House is moving toward what is likely to be a close vote on such a plan.

Our congressional correspondent Kate Snow explains why lawmakers have been at loggerheads on this issue.

(BEGIN VIDEOTAPE)

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: ... about today! It's not about politics!

SNOW (voice-over): The Democratic leader nearing spitting fire talking about the need for prescription-drug coverage.

GEPHARDT: It's about what is right for the wonderful people that built this country! We need a vote for the people today!

SNOW: The outrage cutting across party lines.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: This is something Republicans want to fix. And we want to fix it now.

SNOW: But if it sounds familiar, it should. Remember the last campaign season?

(BEGIN VIDEO CLIP, 2000)

AL GORE, VICE PRESIDENT OF THE UNITED STATES: I will pass a prescription-drug benefit for seniors under the Medicare program. And together we'll make that happen.

BUSH: Prescription drugs for seniors is going to be a priority, not only a priority. We're going to get something done.

(END VIDEO CLIP)

SNOW: So why hasn't it happened? For one thing, sharp disagreements: Republicans wants private insurance to play a major role, have seniors bear some of the cost. Democrats would spend twice as much to cover more expenses, with the government in charge. Another reason, plain and simple: election-year politics. Already, the ads are running.

(BEGIN VIDEO CLIP)

ANNOUNCER: Tell him to keep fighting for more prescription-drug costs.

(END VIDEO CLIP)

JAMES THURBER, AMERICAN UNIVERSITY: Some observers call this plan a wedge issue. A wedge issue in Washington is an issue that both parties know they will not resolve. But it will be used as a wedge, as a way the win the next election.

SNOW: Polls show how important the issue is to seniors, who turn out to vote in higher numbers than other groups, especially in off- year elections. Each party accuses the other of playing politics, with seniors caught in the middle.

REP. MIKE ROSS (D), ARKANSAS: Twenty months ago, the Republicans were sounding like Democrats when it was an election time on this issue. Here we are now, less than five months before an election, and all of the sudden, the Republicans want to have a debate on the prescription-drug issue. That's a good thing. What is sad is that, back in January, I had a bipartisan bill. They refused to give us a hearing or give us a vote on that bill.

(END VIDEOTAPE)

SNOW: Now, Democrats charged that the Republican bill would give a big boost to prescription-drug companies that are aligned with and give money to the GOP. Republicans deny they're doing any favors for the drug industry. And they say Democrats are simply pushing a bigger plan because they want an issue they can take on the campaign trail, tell voters that they voted for even more coverage.

Republican strategists also admit, though, Judy, that this is an issue where Democrats have an advantage. They see that. And that's why they are trying to get out ahead on it, too. Democrats, on the other hand, need an issue. They can't fight the war on terror. That's not their president, so they are picking up on this one to try to win some votes -- Judy.

WOODRUFF: All right, Kate Snow, with the latest from the Capitol, thanks.

I will be back in a moment, but now let's take a look at what's coming up on "WOLF BLITZER REPORTS" -- hi, Wolf.

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

How close is al Qaeda to mounting a cyber-attack on American power systems, hydroelectric dams, and other facilities? We'll have a special report. Also, your kids, your schools: two important decisions today. We'll tell you all about that. And Martha Stewart and her reputation: We'll speak with a crisis-management expert.

All that coming up at the top of the hour, right after INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Oklahoma Governor Frank Keating is the man America's Catholic bishops have chosen to police their priests. We'll get his perspective on how to punish those clerics guilty of sex abuse. Also, we'll have Bill Schneider's "Political Play of the Week."

That's it for INSIDE POLITICS for now. "WOLF BLITZER REPORTS" is next. Thanks for joining us. I'm Judy Woodruff.

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