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CNN INSIDE POLITICS

Will New Jersey Allow Democrats to Enter a New Candidate to Replace Torricelli?; Is the White House Promoting the Assassination of Hussein?

Aired October 1, 2002 - 16:00   ET

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 Worcester, Massachusetts, where the candidates and one of the hottest governor's races in the country square off tonight.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider in Elk Point, South Dakota. We're here to find out what people are talking about on Main Street in the Heartland.

WOODRUFF: Also ahead: Is the White House promoting the assassination of Saddam Hussein?

(BEGIN VIDEO CLIP)

QUESTION: I'm asking you if you intend to advocate, from that podium, that some Iraqis, you know, person put a bullet in his head.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: Regime change is welcome in whatever form that it takes.

(END VIDEO CLIP)

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

WOODRUFF: Thank you for joining us.

I am in Massachusetts because tonight I will be moderating the debate between gubernatorial candidates Mitt Romney and Shannon O'Brien here in this state, here on the campus of Worcester Polytechnic Institute.

This second debate between Romney and O'Brien will be more widely televised than their first, so it could be a pivotal moment in this close and contentious race.

We'll have more on that and on other big state House battles in the next hour.

But first: the showdown with Iraq. As the Senate prepares to debate military action to disarm Saddam Hussein, President Bush today warned the Congress not to tie his hands by limiting his options. But the words that the White House really caught reporters' ears came from Press Secretary Ari Fleischer.

Listen to what Ari Fleischer said when he was asked about the estimated billions of dollars that it would take -- that it would cost to wage war against Iraq.

(BEGIN VIDEO CLIP)

FLEISCHER: The president has not made any decisions about military action, and what military option he might pursue. And so I think it's impossible to speculate.

I can only say that the cost of a one-way ticket is substantially less than that. The cost of one bullet, if the Iraqi people take it on themselves, is substantially less than that. The cost of war is more than that.

(END VIDEO CLIP)

WOODRUFF: Our White House correspondent Suzanne Malveaux is with us now.

Suzanne, are people saying that Ari Fleischer spoke out of turn?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, people were definitely surprised by his comments earlier today. Ari Fleischer really making amends -- right after the briefing making a point to talk to reporters to clarify his statements.

Because a lot of reporters were asking questions: Was it a signal from the Bush administration that now the administration was supporting some sort of assassination attempt by the Iraqi people to Saddam Hussein? Ari Fleischer saying, absolutely not, that he was making a rhetorical point.

What he was saying was that is there is no change in U.S. policy that bars the assassination of foreign leaders by U.S. officials. What he was trying to say, however, is that no one would cry over the loss of Saddam Hussein.

And he did clarify, saying that this administration does support those Iraqi opposition groups both inside and outside of the country, to help Saddam Hussein -- get him out of the country, perhaps exile him, but certainly not to assassinate him.

But yes, some very harsh words coming from the White House spokesman earlier today -- Judy.

WOODRUFF: All right, Suzanne, thanks very much. Suzanne reporting from the White House.

We'll have more on Iraq later in the program, including the administration's reaction to a new agreement between the United Nations and Baghdad on weapons inspections.

Now to the -- now to politics and the legal and political wrangling after Senator Robert Torricelli dropped a bombshell and announced that he will not run for reelection after all.

The New Jersey Supreme Court today agreed to hear a Democratic petition to put a new candidate on the state ballot, even as party leaders tried to figure out who Mr. Torricelli's replacement will be.

CNN's Deborah Feyerick has been following the court proceedings in Trenton, New Jersey. She's with us now

Hello, Deborah.

DEBORAH FEYERICK, CNN CORRESPONDENT: Hey there, Judy.

Well, it is in the hands of New Jersey's State Supreme Court. They decided to hear the case, bypassing any lower court decision.

Now the Democrats are asking judges for several things. First of all, they want to be allowed to put somebody else's name on the ballot. But first the supreme court has to tell them that, in fact, they can do this, even though they missed the deadline to do so.

A judge has ordered all counties in this area to stop printing any ballot with Robert Torricelli's name on it. The Democrats say state law allows them to pick a candidate of their choosing, and they say that it's really a question of voters' rights.

(BEGIN VIDEO CLIP)

ANGELO GENOVA, NEW JERSEY DEMOCRATIC PARTY CHAIRMAN: We are not about changing the law. If you heard anything from me today, you must have heard one thing: We are about enforcing the law as it presently exists. We are about enforcing voter rights. We are about ensuring a competitive race. We are about preserving the electoral process and the integrity of the election.

I thank you very much.

(END VIDEO CLIP)

FEYERICK: The Democrats say that the Republicans want to be allowed to let their candidate run unopposed.

But the Republicans say, no, that's not it at all. They say absentee ballots have been sent out, military ballots have been sent out. And according to the Republican candidate, who's actually supposed to speak just at this podium behind me shortly, the Republican candidate, Doug Forrester, says some of these people have already begun to vote. He says this is an election that is underway.

Now, the supreme court has asked for papers from both sides. They're going to be reviewing those before the oral arguments tomorrow. The supreme court does want several questions answered, including: What happens to those absentee ballots? What happens to those military ballots? Those are questions that the Democrats and the Republicans are going to ask -- or answer, I should say.

In the meantime, top Democrats have been locked up at the governor's mansion all day. And don't be surprised if we begin hearing the name of a front-runner floated out soon.

But again, will that front-runner actually make it onto the ballot?

Judy.

WOODRUFF: Deborah, I'm already hearing people asking: What is the lineup of the State Supreme Court? How many Republican appointees, how many Democratic appointees? Do we know that?

FEYERICK: Yes, there are four Democrats, there are two Republicans and there's one independent.

I spoke to one analyst in this area, and he tells me that, in fact, they don't vote on partisan issues. It's not a partisan court, per se. It's pretty much middle of the road.

WOODRUFF: All right, Deborah Feyerick reporting for us today from Trenton. Thanks.

And now we want to bring you up to date on some of the Democrats who may be thinking about running in the -- to replace Bob Torricelli.

Here now our congressional correspondent Jonathan Karl.

Jon, before I come to you I'll say -- tell you that I spoke today with -- just a short time ago with former New Jersey Senator Bill Bradley who -- all he would say on the record is that when it comes to his running, it's not in the cards, but there are other Democratic names out there being floated.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Boy, they sure wanted him to run, though, Judy.

Yes, as a matter of fact, the Democrats, we think, are going to have a candidate, perhaps within the next hour or so. We understand there's a press conference underway at 5:30 to make an announcement.

The last two that were in the running, we've been told by sources in Trenton and here in Washington, were first Frank Pallone, who is a Democratic member of the House of Representatives from central New Jersey, which in a critical swing part of the state, a part where Democrats have a harder time going up against Republicans. That's one of the reasons leaving him as a leading candidate into the final hours of contention here.

Also, they've been looking at Frank Lautenberg, the former senator from New Jersey, who is somebody who could finance his own campaign.

Those were the last two people that the governor, Jim McGreevey was looking at.

But an interesting point here was touched on by Deborah Feyerick, and that is the New Jersey State Supreme Court, which will make the decision about -- whichever of these candidates is ultimately chosen -- whether or not that candidate will get on the ballot.

That court -- you heard Deborah talk about the political makeup of it -- but what's interesting is six members of the court were appointed by a Republican governor, by Christie Todd Whitman, and only one was appointed by a Democrat, by Jim McGreevey.

And not only that, Jim McGreevey has had a very public feud with the New Jersey Supreme Court, accusing it or being a political body.

I want to read you a quote from the Democratic governor just earlier this spring. He said: "We need to restore the intellectual capital, the integrity and the gravitas of the New Jersey Supreme Court. Unfortunately, these past years under the Whitman administration, it became an avenue for patronage from the executive branch."

So Jim McGreevey is now asking the New Jersey Supreme Court to put a new Democratic candidate on the ballot. And these are the very justices that he has accused of being, essentially, political hacks.

It's going to be a very interesting battle. And whatever happens there, there is a possibility that both sides are preparing for, that it could ultimately get appealed to the United States Supreme Court.

So stay tuned on this legal battle, Judy.

WOODRUFF: Now, where have we seen that before?

Jonathan, one other thing here: Bob Torricelli says he's not running, but are Republicans finished with him? What else are they saying about where he goes?

KARL: Oh, absolutely not. Republicans are going to be running against Bob Torricelli, regardless of who is on the ballot. I spoke to a senator who is also a top party strategist on races like this. And he said to me -- I'll quote you. He said, "we are not going to let Bob Torricelli go." He said, "we are going to portray this" -- this ballot maneuver -- "as Torricelli's last trick, and we're going to hang it around the neck of whoever the Democrats get to replace him."

So they're going to be running against Bob Torricelli even if Bob Torricelli is not on the ballot.

WOODRUFF: It gets interesting-er and interesting-er.

KARL: You've got to love New Jersey politics.

WOODRUFF: No kidding. Thank you, Jon. Appreciate it.

Well, we do expect the political fate of The Torch, as he is known, to bring out the fireworks between James Carville and Bob Novak. The duo from "CROSSFIRE" will be along a little later on INSIDE POLITICS.

We're going to zero in on the governor's race here in Massachusetts. When we come back, who has the momentum heading into tonight's debate?

Also ahead...

(BEGIN VIDEO CLIP)

BUSH: The United Nations must show its backbone. And we'll work with members of the Security Council to put a little calcium there.

(END VIDEO CLIP)

WOODRUFF: An update on the political and diplomatic debate over war with Saddam Hussein. How concerned are voters in the heartland?

And documenting George W. Bush's lighter side. We'll have the clips and the White House reviews. This is INSIDE POLITICS. The place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Tonight's gubernatorial debate here in Massachusetts could set the tone for the rest of this campaign. There's only one more debate scheduled before the election and that is one week before election day.

Earlier today, superior court judges here denied attempts by the Green Party and the Libertarian candidates and an independent candidate to join debate tonight between Mitt Romney and Shannon O'Brien.

Bill Delaney is with me now from inside the debate hall with more on today's showdown.

BILL DELANEY, CNN CORRESPONDENT: Thank you, Judy. You know, anyone interested in the issues driving this Massachusetts gubernatorial race -- well just imagine that most moderate position you can take on just about any issue out there. That will pretty much define the platforms of both the Democrat and Republican in this race.

In this not overly issues-driven, then, most Massachusetts voters expect it tonight to be looking to intangibles as they examine these two candidates. Their demeanor, just how well-liked they are, in this very tight race.

(BEGIN VIDEOTAPE)

DELANEY (voice-over): Once you get past the fact that Mitt Romney, Republican candidate for governor of Massachusetts, and Shannon O'Brien, Democratic candidate for the same office, don't share the same gender, trying to find dramatic differences between them isn't easy.

LOU DINATALE, UNIV. OF MASS., MCCORMICK INST.: Romney is aggressively trying to take Democratic issues off the table. He's trying -- you know from abortion to the minimum wage, he's been aggressively making it absolutely clear he's a moderate.

DELANEY: Good politics in a state only 14 percent registered Republican. Though the 36 percent registered Democratic aren't about to put anyone over automatically, either. Massachusetts' middle, what really matters. The state's fully 50 percent of voters unenrolled independents.

Though gender -- again here -- may be the brightest line. Mega-rich businessman and president and savior of the Salt Lake Olympics, Romney leads among men. But he trails dangerously among women. That's why he enlisted Republican activist Kerry Healy as his lieutenant governor running mate. And maybe a reason for this oft- repeated ad.

(BEGIN VIDEO CLIP)

ANN ROMNEY, MITT ROMNEY'S WIFE: We were in high school. We were teenagers.

MITT ROMNEY (R), MASSACHUSETTS GUBERNATORIAL CANDIDATE: She was a sophomore, I was a senior.

A. ROMNEY: Our first real date...

(END VIDEO CLIP)

DELANEY: Mush, which may or may not seduce women voters. Some concerned, for example, he's squishy on abortion. Though certainly a sweet spot in an otherwise not so nice campaign.

In a first, little-seen debate, what got most noticed Shannon O'Brien, the state treasurer, accusing Romney of handing out patronage jobs.

ROMNEY: Because I have not spoken with one person about a job in my administration. I haven't made an offer, I haven't discussed it. So you're just wrong.

DELANEY: She was wrong, O'Brien admitted, sort of, a day or so later.

SHANNON O'BRIEN (D), MASSACHUSETTS GUBERNATORIAL CANDIDATE: ... absence a tape recorded conversation. I withdraw the statement and I do apologize to Mr. Romney.

DELANEY: Relative pettiness at a time of huge budget shortfalls in Massachusetts that could turn off voters, especially those still undecided. Both camps vow to stay positive in Tuesday night's debate. A critical test, most agree, especially for Republican Romney in liberal Massachusetts.

DINATALE: This is a very tight race -- two points one way or another. Romney will need to beat O'Brien. Romney can even out-point her at all the debates. If he doesn't clearly beat her in a Democratic state, after 12 years of Republican incumbents, O'Brien may be good enough to win. So I think he needs to knock her out. And I don't know if he can. I don't know if she can be knocked out.

DELANEY: In O'Brien's corner in recent days, Senators John Kerry and Ted Kennedy, with Al Gore expected later in the week. (END VIDEOTAPE)

DELANEY: Republican Mitt Romney bringing in some marquis-level support of his own this week. On Friday, the president of the United States, George W. Bush, will be campaigning for Romney here in Massachusetts -- Judy.

WOODRUFF: And, Bill, is that expected to be a plus -- a big boost for Mitt Romney?

DELANEY: Well, interesting question, Judy. Perhaps more than any other state in the Union, George W. Bush's support here in Massachusetts has been sliding a bit. He's down in the '40s in his approval ratings here in this state so it's not crystal clear that in this state the support from the president of United States, that might help a candidate in a lot of other places is going to help all that much here -- Judy.

WOODRUFF: All right. Bill Delaney, thanks very much and I'll see you in a few minutes.

Well, for some candidates running for governor is their ultimate political goal. For others, it is a -- simply a platform to keep building the careers -- their own careers and the careers of their allies.

Our Bruce Morton on the importance of governors.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): To a voter, the governor matters because he's in charge of the state government. But for a presidential candidate governors matter for other reasons.

CHARLIE BLACK, FORMER BUSH CAMPAIGN ADVISER: If they speak on behalf of a presidential candidate, it gets a lot of attention. But more importantly, governors have political organizations and fund- raising organizations in their states. That's particularly important to a new presidential candidate who hasn't run before.

MORTON: Candidates like Bill Clinton in 1992, or George W. Bush in 2000, both, of course, governors themselves. State capitals produce more presidents than the U.S. Senate, though maybe not more wannabes. Having the governor helps but it doesn't guarantee success.

After John McCain trounced Bush in the New Hampshire primary, Michigan's popular John Engler said he was building a firewall to protect Bush in his state. But McCain won Michigan and Engler couldn't rebuild in November, either.

DAVID BRODER, "WASHINGTON POST": Last time, George Bush had help from Tom Ridge in Pennsylvania, John Engler in Michigan, Tommy Thompson in Wisconsin -- all three very popular and very effective governors. But they were not able to carry their states for the president.

MORTON: But they help.

President Bush lost Iowa narrowly last time. It's Democratic Governor Tom Vilsack is in a very tight race this time against Republican Doug Gross. And Bush had visited Iowa nine times since taking office, helping himself, of course, and hoping for a Republican statehouse when he runs in 2004.

CHARLIE BLACK, FORMER BUSH CAMPAIGN ADVISER: It does matter. And it helps you get attention and get your message across.

I think we lost Iowa by 7,000 votes in 2000. I would say having a Republican governor there could more than make up 7,000 votes.

BRODER: It's because they're there full-time and, as compared to senators, who run every six years, governors run every four years. And they are the ones who really are in touch, constantly, with the local officials, with the grassroots and with the voters of those states.

MORTON: Want to run for president? Get to know a governor, or two, or three.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: And more political fallout from Bob Torricelli's exit. When INSIDE POLITICS returns, Bob Novak and James Carville debate the next step for New Jersey Democrats in our "Taking Issue" segment.

But first, let's turn to Rhonda Schaffler at the New York Stock Exchange for the latest on the markets.

Rhonda, it looks like a turnaround -- at least the last time I looked.

RHONDA SCHAFFLER, CNN FINANCIAL CORRESPONDENT: You are right, Judy, this is quite a turnaround here.

Investors seem quick to put that disastrous third quarter behind them, buying stocks with a vengeance here today.

The buying did accelerate toward the end of the session, following word on U.N./Iraq deal on weapons inspections.

Some, of course, remain very skeptical. We are in a bear market. And some are saying stocks just got so beaten down that bargain hunters moved back in.

That said, the Dow still managed to rally 346 points, a gain of 4.5 percent. Nasdaq up 3.5 percent on the day.

In the early going, Wall Street ignored a pair of economic reports that showed a slowdown in manufacturing and construction. There was some encouraging news on the job front. An employment research firm says layoff announcements fell tot their lowest level in nearly two years in September.

Also some good news coming out from corporate America. After the closing well PC maker Dell Computer has just come out and upped its revenue guidance for the third quarter.

There is a silver lining for employees of bankrupt telecom firm Global Crossing. Chairman Gary Winnick has pledged to give $25 million to help those who've lost money on the company's stock in their 401(k) plan since 1999.

Winnick is under investigation for allegedly selling $123 million in Global Crossing stock based on insider information. He denies any wrongdoing.

That's the very latest from Wall Street,

More INSIDE POLITICS after the break, including opinions from the Heartland on the most important election issues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TORRICELLI: I am a human being. And while I have not done the things that I have been accused of doing, I most certainly have made mistakes.

There will be those who conclude that those mistakes bring justice this moment, because there's a price to be paid. When did we become such an unforgiving people?

(END VIDEO CLIP)

WOODRUFF: With us now from the CNN "CROSSFIRE" set at George Washington University, James Carville and Bob Novak.

Gentlemen, forgiving or unforgiving, should the Democrats be permitted to put another candidate on the ballot now that Bob Torricelli has bowed out, Bob?

ROBERT NOVAK, CO-HOST, "CROSSFIRE": It's an outrageous power play. It's like -- making like a football game, the quarterback is throwing interceptions so,you bring in a quarterback.

Well this isn't football, this is politics. The law is clear: Unless he dies, he stays on the ballot.

But if you have a majority on the New Jersey Supreme Court, I doubt that the federal courts want to get into that bramble again, they go back.

Now, what does that mean? Does that mean the Democrats will probably keep the seat? I guess so.

If Senator Torricelli wanted to get out, he should have gotten out months ago, weeks ago, at least before the deadline had passed him.

WOODRUFF: James...

(CROSSTALK)

JAMES CARVILLE, CO-HOST, "CROSSFIRE": This is a party that actually hates democracy. They tried to overturn a '96 election and they stole the 2000 election; of course they don't want the Democrats to be on the ballot.

The law, as I understand it, is solid. What happens, it will go to the supreme court. The supreme court of New Jersey has ruled in the past that the people ought to be presented with a choice.

They've got this right-wing clown who's done nothing as a candidate, and the only way he can ever be a United States senator is if nobody runs against him.

So they can do everything they can to keep people of New Jersey from having a choice, I understand that. They did everything they could to steal an election in 2000. They did everything they could to overturn the election in '96 (UNINTELLIGIBLE). And the Republican Party doesn't like democracy.

NOVAK: I think you repeated yourself. Mr. Carville thinks if he says it twice it has more impact.

But Judy, the fact of the matter is this is an important precedent for politics. I've been covering politics a long time, about half a century, and I have never seen a case where a guy is losing the election and there's -- the law clearly says it's too late to get out, so you put a new person in.

I just ought to add one other thing. I've known Bob Torricelli for a long time. I disagree with him on most things, but he's a tough guy.

What a weepy, lachrymose, sickening performance that was yesterday. "I'm a human being"? What kind of tough Jersey politics is that?

WOODRUFF: James? If the Democrats do get permission from the court to put somebody on, who's their best candidate?

CARVILLE: Right now, I guess -- I haven't kept up, but they were going through sort of a list of people. But my understanding is that Congressman Menendez is, what I'm told said he didn't want to...

NOVAK: He was their best candidate.

CARVILLE: He would have been a very good candidate. I mean, Congressman Pallone is a superb candidate. (UNINTELLIGIBLE) I don't want to go through the whole list of them.

NOVAK: You just about exhausted...

CARVILLE: Haven't even come close to exhausting the list.

But there will be somebody there. And I suspect that the New Jersey Supreme Court will side on the side of democracy and against the Republican Party, which loathes and detests democracy.

WOODRUFF: All right, we are going...

NOVAK: How is it that democracy would goes against the rules, I don't know.

CARVILLE: You did it in Florida, you did it in impeachment.

WOODRUFF: We are going to leave it there; democracy reigns.

All right, Bob Novak, James Carville, thank you both. We appreciate it.

And coming up next we have new polls in the California governor's race and the race for governor in Arizona next in our "Campaign News Daily."

Plus: the candidates get personal in the first Senate debate in the state of Tennessee.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines now in our "Campaign News Daily": Personal attacks dominated much of last night's debate, the first debate in Tennessee in the Senate race between Republican Lamar Alexander and Democrat Bob Clement. Alexander said Clement is too liberal for Tennessee and linked him to a $1 billion bank failure in the 1980s. For his part, Clement said Alexander is profiting from his political contacts by serving on the boards of big corporations.

Meanwhile, two new polls spotlight governor's races out West. In California, Democrat Gray Davis has added to his lead over GOP challenger Bill Simon. An "L.A. Times" poll gives Davis a 14-point advantage among likely voters. But 65 percent of those surveyed said they would like to see someone other than Davis or Simon on the November ballot.

Nearby, in Arizona, Republican Matt Salmon and Democrat Janet Napolitano are locked in a tight governor's race. The Grand Canyon state poll gives Salmon a slim three-point edge. You might recall that President Bush made a campaign stop for Salmon in Arizona just last week.

Question: Is the prospect of war with Iraq a campaign issue or not? Up next, we will hear voices from the Heartland and we'll talk to pollsters from both parties.

(COMMERCIAL BREAK)

WOODRUFF: Here in Massachusetts and some other places outside the Washington Beltway, the political debate over Iraq does not appear to be dominating the political air, if you will, as it is in Washington.

We sent our Bill Schneider out on the road to see what's going on.

(BEGIN VIDEOTAPE)

SCHNEIDER: In Washington, it's about Iraq, stupid. But here in South Dakota, the campaign is about other things, lots of other things. And the voters are not stupid.

(voice-over): Elk Point, South Dakota. This is where South Dakota, Iowa and Nebraska meet, the heart of the Heartland, and the heart of the 2002 campaign, with some of the nation's hottest political races. What issues are on the voters' minds?

Here's a farmer.

UNIDENTIFIED MALE: Probably for farmers, it's the grain price that is the biggest thing, and the drought aid in some of the places.

SCHNEIDER: Here's a man who just voted by absentee ballot. His biggest concern:

UNIDENTIFIED MALE: Mine was the economy, no question about it.

SCHNEIDER: People here are talking about issues that are not being talked about much in Washington right now.

UNIDENTIFIED FEMALE: Oh, I would say the taxes, and, right now, crops, the farmers' issues on that, and health care, Medicare, things like that.

SCHNEIDER: Talk to voters here and you get the strong impression that health care is the sleeper issue.

UNIDENTIFIED MALE: The big concerns that we have here in South Dakota are primarily Medicare, health care issues, health care-related issues.

UNIDENTIFIED MALE: Health care and the cost of long-term care in a nursing home, Medicare cuts to nursing homes.

SCHNEIDER: The problem is cost.

UNIDENTIFIED FEMALE: You know, the prices are too high for them. So they don't know if they can afford a lot of it.

SCHNEIDER: Health care costs have been rising fast. And in this state, an unusually high number of people are in business for themselves, like farmers. And they have to pay those costs.

Not a single person mentioned Iraq. Is Iraq an issue here?

UNIDENTIFIED MALE: Not insofar as I can see.

UNIDENTIFIED FEMALE: I haven't really heard anything on that yet.

UNIDENTIFIED MALE: No, not really. I just trust that whoever is in charge is going to do the right thing.

UNIDENTIFIED MALE: I'd just as soon not get in a war. But I guess we'll try to have to talk it out.

SCHNEIDER: How can you have a nation on the brink of war and a campaign that's about everything but war?

UNIDENTIFIED MALE: A lot of people are saying that maybe we should wait until after the election and not turn it into a political issue.

SCHNEIDER: The biggest reason why candidates and voters here are not talking about Iraq? They don't think war should have anything to do with politics.

Bill Schneider, CNN, Elk Point, South Dakota.

(END VIDEOTAPE)

WOODRUFF: And with us now: GOP pollster Linda DiVall and Democratic pollster Anna Greenberg.

Let me ask you both. You heard what Bill Schneider found when he traveled to South Dakota. What about around the rest of the country? We're hearing so much talk about Iraq in Washington. But what are voters in these races around the country hearing?

Anna Greenberg?

ANNA GREENBERG, DEMOCRATIC POLLSTER: Well, I can tell you the piece is exactly right.

In the races that we're working in and the race that I'm reading about, it's clear that people are talking about Social Security and retirement security, and prescription drugs and health care costs more generally. The underlying subtext, of course, is the state of the economy, which, over the past four or five months, has been rising as an issue that people are concerned about and now is equal with, if not stronger than sort of security concerns and even the war with Iraq.

WOODRUFF: Linda DiVall, how are you seeing it?

LINDA DIVALL, REPUBLICAN POLLSTER: Well, we see it a little differently.

Voters have two preoccupations. One, quite clearly, is the state of the economy, the cost and availability of health care, Social Security, prescription drugs. But they are also focused on and thinking about and talking about combating terrorism and the situation in Iraq. If you talk to members of Congress, if you look at our polling data and asks what's the most important issue before Congress, clearly there's more emphasis on the domestic issues and the economy. But there are a significant number of people who are concerned and have their focus on combating terrorism and want to hear more from the president on the situation in Iraq. Campaigns are being successful because they are talking about the economy. So what Republicans have to deal with, obviously -- and Democrats -- the world is changing. And the situation in Iraq is ever-evolving. Republican candidates are successful because they are talking about these economic issues that people are focused on. Democrats don't have that stage to themselves anymore.

GREENBERG: But I think we need to be clear here.

When you look at what people say they are going to vote on -- which is very different than what are the most important matters in front of Congress at this moment -- two-thirds of people say: "We're going to vote on domestic issues. We're going to vote on Social Security. We're going to vote on the economy." And these are all issues where the Democrats have an advantage.

WOODRUFF: Well, let me cite something to you all. Today, the stock market happened to be up. But look at these numbers: financial markets down at least 17 percent in the third quarter of this year. September, we saw consumer confidence at its lowest level in almost a year. Consumer spending was up below projections, 0.3 percent. Housing prices are up.

What would it take, Linda DiVall, for the economy to overtake Iraq and some of these other international concerns in a way that might be a problem for the Republicans?

DIVALL: Well, as Anna said, the economy has -- is in the No. 1 position.

The point that I am trying to make is that Republicans are engaged in that issue. And most voters clearly understand that the Republican Party and President Bush is not responsible for the state of the economy. They look to September 11. They look to the normal business cycle. They understand that the Republican Party is not the problem here. And Republicans are engaged in talking about economic issues.

So it's not like Republicans have their head in the sand and aren't engaged in a discussion on issues that are relevant to voters. And that's the one thing that I think the Democrats are having a real problem with: that Republicans are talking about the relevant issues. And because of that, we are winning.

WOODRUFF: Anna Greenberg, what about that?

GREENBERG: I think that it's clear that people don't blame the president for the state of the economy. People understand that there are economic forces that are beyond the control of any one individual, the president.

And it's true, certainly, that there are a number of consultants and advisers within the Republican Party who have said, "We have to talk about domestic issues" -- all that is true -- and when you look at the contested rates, both at the Senate level and the congressional level, that they're fighting over issues like Social Security, prescription drugs, and the economy.

But what I think is important is not that the Democrats -- the Democrats have an advantage on these issues, because the economy, in and of itself, is important. But the way the economy hits home to people on a daily level is their concerns about retirement security, their 401(k), the cost of their prescription drugs, the cost of going to a doctor. These are all areas where Democrats have a double-digit advantage over trust on handling these issues over the Republicans.

DIVALL: Except for this fact: The Republican House passed prescription drugs. It's sitting there in the Senate. So Republicans are engaged on these issues and doing something and providing solutions.

WOODRUFF: Fascinating how the two parties see it differently.

We thank you both for joining us. Anna Greenberg, Linda DiVall, good to see you both.

GREENBERG: Thank you.

DIVALL: Thank you.

WOODRUFF: Thanks very much.

And INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: As we've been telling you, I'm in Massachusetts to moderate tonight's gubernatorial debate in the Bay State between Mitt Romney and Shannon O'Brien. This debate comes five weeks before November 5, when a number of important governor's races will be decided.

Our Candy Crowley has been taking a look at them.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): 2002 is a year of governor's races offering a smorgasbord of delights for the political connoisseur. Fall features two of the biggest surnames in politics: Kathleen Kennedy Townsend in Maryland.

KATHLEEN KENNEDY TOWNSEND (D), MARYLAND GUBERNATORIAL CANDIDATE: And make sure it is a winning message.

CROWLEY: Jeb Bush in Florida. They are household names running against little-known candidates with dragon-slayer possibilities. A rookie politician, Bill McBride, has pulled within single digits of Jeb Bush.

And in relentlessly Democratic Maryland, four-term Republican Congressman Bob Ehrlich is running even or a little ahead of Kennedy Townsend. An Ehrlich win would make him Maryland's first Republican governor since Spiro Agnew.

This year is also the year time runs out for 14 governors who took office when term limits were all the rage. It is a year that features a record number of female gubernatorial candidates from major parties, 10 in all. And it is a year of changing personal fortunes.

GOV. JESSE VENTURA (I), MINNESOTA: This will be a title match like no other title match they've ever seen before, because I have the power.

CROWLEY: Yesterday's rising star, the mercurial, one-of-a-kind Jesse Ventura is vacating the Minnesota governorship under fire. Three men, a Republican, a Democrat and an independent, wrestle for his spot. And Minnesotans argue over the Ventura legacy.

But in Michigan, Democrats think their star is rising. Jennifer Granholm, a young, dynamic, TV-friendly candidate with charisma, looks strong in her race against the Republican lieutenant governor, who struggles to get out from under the shadow of term-limited John Engler, who vacates the governorship after 12 years.

2002 may also be the year the biggest state features the lowest turnout. In California, voters seem cool to the race between Democratic Governor Gray Davis and neophyte politician Bill Simon. Neither man currently hits the 50 percent approval mark.

There are, in all, 36 governor's races this season. Two are currently held by vacating independent governors, while Democrats defend 11 governorships and Republicans man the barricades for 23 of their seats. Even Republicans tacitly concede the numbers favor Democrats.

MARC RACICOT, RNC CHAIRMAN: And we've had a lot of Republican governors for a long period of time. So we know we are going to have to work very, very hard to maintain a majority of statehouses with Republican governors.

CROWLEY: 2002 may in fact be the first time since 1994 that Democrats held the majority of governorships. But Democrats insist this is not about numbers, but about policy.

TERRY MCAULIFFE, DNC CHAIRMAN: Oh, I think any connection today to George Bush is very harmful to anyone running for office. This man is presiding over one of the worst economic times in the history of our country.

CROWLEY: That is, of course, a matter of debate and dispute, which is why they hold elections.

(END VIDEOTAPE)

CROWLEY: Adding spice to the mix is this: All of the states, or at least most of them, with gubernatorial contests posted deficits in their budget last year. And you can bet that many of those same races will be the most expensive ones ever -- Judy.

WOODRUFF: All right, Candy, thanks very much.

Well, speaking of that, as people here in Massachusetts get ready for tonight's governor's debate in this state, our political analyst Ron Brownstein takes a look at these governor's races in the context of tight budgets and tight races.

What about the shrinking fiscal situation? We don't hear much about the shrinking surplus at the national level these days, Ron. To what extent is it an issue in these governor's races?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, Judy, in fact I think that's the biggest difference between the state and federal races in this cycle.

As you said, at the national level, there's been very little debate on the campaign trail about what caused the disappearance of that once-estimated $5.6 trillion federal surplus. On the other hand, you can look at about nine states where the budget problems are really at the very center of the race.

And these would include Democratic-held states like California, Iowa, Alabama and Maryland, Republican states like Wisconsin, Tennessee, Arizona, now Florida, and Minnesota, where the budget shortfall was a big factor, one of the key factors in Jesse Ventura deciding not to run again. There are another five or six states where it's a factor, but not the central factor. So it's a very big difference between the state and federal level in this election.

WOODRUFF: Ron, what determines whether it is a big factor or not at the state level? Is it the size of the deficit that matters or something about the way the candidates are playing the issue?

BROWNSTEIN: Well, I think the size of the deficit is important. It also is the kind of solutions: for instance, in Wisconsin, where Scott McCallum, who succeeded Tommy Thompson as governor, originally had a proposal to cut back aid to state and local government. That was very unpopular.

The big difference, Judy, is, in the states, they have to balance their budgets. At the federal government, the hard choices about what to do about the decline of the surprise and the return of deficits have been pushed down the road. They are funding the government now with Social Security money. So they really haven't had to defend spending cuts or tax increases, whereas, in the states, they've had to do both.

You have a number of states now where you have Republican candidates going after Democrats, saying they have a secret plan, in so many words, to raise taxes after the election. The choices are much sharper because they have to make them more immediately in the states.

WOODRUFF: So, Ron, is it automatically a negative for a governor running for reelection when the deficit is an issue? BROWNSTEIN: I think it is automatically a negative, but it's not necessarily a fatal negative.

You have someone like Tom Vilsack in Iowa, who was hurting quite badly earlier this year under the weight of the budget shortfall, but who has recovered and regained the lead by focusing other questions on his Republican opponent. Still, it's probably not a coincidence, Judy, that, from 1990 to 1994, the last time the states were in a serious fiscal squeeze, 12 incumbent governors were defeated; whereas, from 1996 to 2000, when they were rolling in money, increasing education spending, and cutting taxes, only three incumbent governors were defeated.

I think we are going to see something, a little bit of a reversion back to the old pattern, with a lot more volatility this year, directly tied to these state shortfalls.

WOODRUFF: OK, Ron Brownstein, we've got five weeks to find out. Thanks. But we'll see you before that. Appreciate it.

BROWNSTEIN: All right. Thank you.

WOODRUFF: We return to the days of election 2000 when we come back: scenes from a light-hearted documentary on the last election and a relaxed candidate who would later become president.

(COMMERCIAL BREAK)

WOODRUFF: It was journalists, White House officials and congressional Democrats all who gathered last night in Washington at the Library of Congress to look at a new documentary on election 2000. But this film is different from most political documentaries, because it features a behind-the-scenes look at then candidate George W. Bush in a relaxed and often playful mood.

The film was created by network producer Alexandra Pelosi, daughter of House Minority Whip Nancy Pelosi.

(BEGIN VIDEOTAPE)

ALEXANDRA PELOSI, DIRECTOR, "JOURNEYS WITH GEORGE": When NBC assigned me to go on the campaign trail, I brought my camera along. Just like you bring along your camera to go on a road trip, I brought my camera along. And I started sticking it in everybody's face. After a while, the president saw what I was doing and he just started engaging.

(BEGIN VIDEO CLIP, "JOURNEYS WITH GEORGE")

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Is this movie going to be called "George & Alexandra"? Is that the name of this movie?

PELOSI: I don't know. What do you think it should be called?

BUSH: I don't know. "Journeys with George"? (END VIDEO CLIP)

PELOSI: The minute that Bush named the movie on the bus in New Hampshire, I knew we were making a movie. He used to always say: "Pull the camera out. Let's shoot another scene for our movie."

(BEGIN VIDEO CLIP, "JOURNEYS WITH GEORGE")

PELOSI: OK, let's be serious. If you were a tree, what tree would you be?

(LAUGHTER)

BUSH: I'm not. I'm a bush. See, I'm a little quicker than you think, Alexandra.

(END VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: It's great. It's a must-see. It's very enjoyable. People get to see another side of politics that you really don't get to see after somebody is elected president.

(BEGIN VIDEO CLIP, "JOURNEYS WITH GEORGE")

BUSH: This is the ultimate test of patience for this campaign, is putting up with Alexandra.

(LAUGHTER)

BUSH: We have an opportunity to -- if I get elected, so help me God.

So help me God.

(END VIDEO CLIP)

(END VIDEOTAPE)

WOODRUFF: "Journeys With Judge" is the title, at the request of the future president. It debuts on November 5 on HBO, for those of you who are not watching the election returns that night.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: That's it for INSIDE POLITICS in Worcester, Massachusetts.

But, before we go, one quick correction: That "Los Angeles Times" poll I told you about has Gray Davis 10 points ahead of Bill Simon, not 16, as I reported. We regret it.

"WOLF BLITZER" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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