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CNN INSIDE POLITICS

What Were the Top Political Plays of 2002?; What Will Be Hot in 2003?

Aired December 31, 2002 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CANDY CROWLEY, GUEST HOST: INSIDE POLITICS begins right now.
ANNOUNCER: Celebration and security. Another New Year's Eve spotlights new realities nit he world's hot spots and here at home.

What would Muhammad drive? We'll talk to the man behind a cartoon that's drawing controversy.

Find out who's in and who's out; what's hot and what's not in the coming political year.

What a play. Forgot football, we've got the top political wins and fumbles of the year.

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

CROWLEY: Thanks for joining us. Judy is off this week. I'm Candy Crowley.

If there is any place where the new year is fraught with anxiety, it may be Iraq. It is almost midnight there, and it is almost midnight in neighboring Kuwait, where U.S. troops preparing for a possible war against Baghdad, are preparing to ring in 2003.

We want to bring you these pictures now. What are you looking at is part of the 3rd Infantry Division. All of them based at Ft. Stuart in Savannah, Georgia. They are waiting for the countdown. I'm told, however, there are no clock for precise New Year's. It looks like they all have already begun to celebrate out there.

Once again, they are in the desert of Kuwait. There are about 3,200 in the brigade. Not all of them are there, of course. Not to be alarmed by the fire. What are you seeing -- this is a bonfire celebration. They set it off in the desert to celebrate the new year. Most of these men and women have arrived in this place beginning in September. And they are doing a number of exercises in Kuwait, including crew-level gunnery exercises. Once again, it is midnight in the desert in Kuwait. U.S. soldiers, men and women celebrating the beginning of the new year.

President Bush told reporters today he has not yet decided whether to wage war against Saddam Hussein. He also spoke out against North Korea's nuclear buildup, saying he's confident a peaceful solution can be reached.

CNN's Suzanne Malveaux is with the president in Crawford, Texas. So, Suzanne, sort of an explanation of the two approaches to both North Korea and Iraq?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, Candy. It was rather surprising, because President Bush visiting a coffee shop in Crawford, answered so many questions, but he answered the one question that so many people have been asking. And that is, why is the administration considering an armed conflict with Iraq that says it has no weapons of mass destruction and at the same time saying that it is not entertaining a military conflict with North Korea, that does have nuclear weapons and has been making something moves, perhaps, to even produce more?

Well, the president says when it comes to North Korea, that it is not a military showdown, but rather a diplomatic one -- that he still believes that this can be resolved peacefully with diplomacy. And despite the fact that Russia as well as South Korea both say that dialogue, not the U.S. policy of isolation, is the way to go, the president believes and is confident that he will win the support of North Korea's neighbors.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There is strong consensus, not only amongst the nations in the neighborhood and our friends, but also at the international organization, such as the IAEA that North Korea ought to comply with international regulations. I believe this can be done peacefully, through diplomacy, and we will continue to work that way. Take all options, of course, are always on the table for any president. But by working with the -- these countries, we can resolve this.

(END VIDEO CLIP)

MALVEAUX: President Bush contrasted this with the situation in Iraq, saying that Saddam Hussein had come close to building a nuclear weapon in the '90s and that he continues those efforts.

(BEGIN VIDEO CLIP)

BUSH: For 11 years, Saddam Hussein has defied the international community. And now we've brought the world together to send a clear signal. We expect him to disarm, to get rid of his weapons of mass destruction.

(END VIDEO CLIP)

MALVEAUX: Now, Candy, while, of course, military preparations in full force for a possible war with Iraq, President Bush saying that one of his New Year's resolutions is to handle all of these conflicts peacefully -- Candy.

CROWLEY: Suzanne, the president has a new economic team in place, but it seems like not just new faces but some new figures we're getting, coming -- the outgoing presidential adviser said he thought the war would be up to $200 billion. Now we're hearing $50 billion figures.

What's up with that?

MALVEAUX: Well, that's right. You're hearing dramatically different figures. The Office of Management and Budget saying they thought anywhere from 50 to $60 billion dollars that it would cost for a war with Iraq. The president was asked about this, and because so many people are concerned about the economy, and for the first time, he talked not only about the human cost of a possible conflict, but the economic cost.

Quoting -- "And I'm saying that the economy cannot afford to stand an attack. An attack from Saddam Hussein or a surrogate would cripple the economy." The president addressing that earlier today.

Of course, a certain level of sensitivity about that issue. So many people wondering whether or not this -- the administration can really afford to wage a war with Iraq, but again the president saying he has yet to make up his mind.

CROWLEY: White House correspondent Suzanne Malveaux in Crawford. Thanks, Suzanne.

Heading into the new year, nuclear tensions between the U.S. and North Korea have made headlines. But anti-American feelings were on display on the southern end of the Korean peninsula today.

CNN's Sohn Jie-Ae is in Seoul.

(BEGIN VIDEOTAPE)

SOHN JIE-AE, CNN SEOUL BUREAU CHIEF (voice-over): South Korea's candlelight protesters brought in the new year chanting anti-American slogans and singing nationalistic songs.

Some clashed with the thousands of police as they tried to march towards the U.S. embassy. "Move away, move away," demanded the demonstrators, who are angry with the U.S. military court's acquittal of two U.S. soldiers accused of negligence in the deaths of two South Korean school girls struck by a military vehicle.

While there were some families who came with children, the bulk of the protesters were young Koreans, calling for a revision of the State of the Forces agreement that governs the 37,000 U.S. troops in South Korea.

"To make sure this kind of case never happens again," says this young man, "we need to create a more equal footing between South Korea and the United States."

Sophomore Chae Wu-yung (ph) even believes American troops should pull out of South Korea.

UNIDENTIFIED FEMALE (through translator): I think American troops are standing in the way of reconciliations between the two Koreas.

SOHN: Kim Yung-dae (ph), a junior high school teacher, has a more moderate view.

"I wish we could unify South and North Korea and that would do away with the need for U.S. troops," he said. "But we must be realistic. "

this seems to be in line with the views of president-elect Roh Moo-hyun, who many believe rode in on such anti-American sentiment.

The new president told reporters South Korea needed to be consulted above all in formulating any North Korea policy on the part of the United States.

"Success or failure of U.S. policy towards North Korea isn't a life or death situation for the American people," he says. "But it is that for the Korean people."

For his part, the president-elect did call for a halt to the protests as he tried to deal with the North Korea nuclear issue. But it was a call that was evidently ignored.

(on camera): While anti-American protests may die down after this New Year's Eve rally, many believe that anti-American sentiments have grown so strong and prevalent that the new president will have to deal with it as a major force as he formulates his North Korea policy.

Sohn Jie-Ae, CNN, Seoul.

(END VIDEOTAPE)

CROWLEY: Security is especially tight in New York City this New Year's Eve. Mayor Michael Bloomberg says there's no indication anyone is planning a terror attack there, but he adds better safe than sorry.

We've got CNN's Jason Carroll in Times Square. Jason, security wise, does it look any different than it has in years past?

JASON CARROLL, CNN CORRESPONDENT: Oh, it looks much different.

I can tell you that I took a cab ride up here and you can really see the police presence as far away as 10 blocks before you even get to Times Square. So, security obviously a concern. The police department here in New York has a plan that is in place.

We can tell you that bomb squads and dogs from the city's K-9 teams will be conducting sweeps in Times Square and as well as throughout the city's transit system.

The city's Archangel package will also be deployed. That's a grouping of officers from emergency services, the bomb squad as well as the hazardous materials unit. They will all be mobilized to respond in the event of an emergency.

Also, counterterrorism snipers will be stationed on buildings throughout the area. Spectators who are entering Times Square will have to go through checkpoints. No bags will be allowed. No backpacks. The manhole covers have been sealed. Mailboxes have been removed, all in an effort to keep the celebration as safe as possible.

(BEGIN VIDEO CLIP)

RAY KELLY, NEW YORK POLICE COMMISSIONER: Clearly, we'll have a significant police presence. We'll have observers on rooftops. We'll have specially trained units able to respond for any eventuality. So I think it will be a very safe and festive event.

(END VIDEO CLIP)

CARROLL: Another security note. The FAA has actually restricted flights over the Statue of Liberty as well as midtown Manhattan. That started about a few minutes ago. And that will stay in effect until 4:00 a.m. But I know a lot of people, Candy, want to see more of Times Square.

I want to show you, all of the people that have already started to come out here. Hundreds of thousands of people already lining the area, getting ready to see that ball drop.

Let me just give you a quick look at where that will happen at about midnight. Right above the Discovery card Jumbotron there, where you see the 2003, that is where the ball will drop at about midnight.

Christopher Reeve will lend his talents in helping the ball drop. I've been told that disco diva Anita Ward will be out here to sing her standard "Ring My Bell." They're going to be handing out bells to all the people who are going to be gathering here in Times Square on this rather balmy night, I have to say. It's about 50 degrees. So things feel really good. Everyone hoping it's probably going to be a noisy new year, but a safe one -- Candy.

CROWLEY: Thanks very much, Jason Carroll. Not a bad gig on New Year's Eve.

CROWLEY: Coming up next, we'll talk to an editorial cartoonist who defends his spoof on the "What Would Jesus Drive" campaign against harsh criticism from Muslim-Americans.

Also ahead, who killed Chandra Levy? We'll revisit one of the year's many unsolved mysteries.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'll Bill Schneider in Los Angeles. If you've got the champagne and party hats, all you need to complete your New Year's Eve is my top political plays of the year. And the biggest bloopers too.

BUSH: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world by seeking weapons of mass destruction.

CROWLEY: It's time to check your "I.P." I.Q. Which world leader resigned on New Year's Eve, 1999? Was it a, Jiang Zemin, b, Ehud Barak or c, Boris Yeltsin. Stay with INSIDE POLITICS we'll tell you the answer later in the show.

(COMMERCIAL BREAK)

CROWLEY: Checking the headlines in campaign news daily. North Carolina Senator John Edwards poised to move a step closer towards a run for the White House. The first term Democrat is lining up a series of media interviews for this coming Thursday. Sources tell CNN they expect Edwards to create an exploratory committee to raise campaign cash. Fellow Democrats John Kerry and Howard Dean have already created campaign committees.

A syndicated political cartoon targeting Muslim extremists is drawing criticism and condemnation from Islamic-American interest group. The drawing, by Doug Marlette plays off the recent what would Jesus drive ad campaign against sport utility vehicles. Under the heading, "What Would Mohammed Drive," the cartoon shows a man driving a Ryder truck stuffed with weapons. Doug Marlette is also the author of a new novel called "The Bridge." He joins us from Raleigh.

Doug, thanks for taking the time on New Year's Eve. Above and beyond.

OK, so look. You look at this and can you understand why Muslim- Americans are upset with this?

DOUG MARLETTE, POLITICAL CARTOONIST: I understand it, but I have a lot of experience with fundamentalists of all stripes to Protestant to Catholic or any religious fundamentalist or even left wing going (UNINTELLIGIBLE) going literal, and becoming very upset about cartoons and images. There's something about them. You know, you can't say on the other hand in a cartoon. So I have had a lot of experience with it from the time I was 21. They all sound the same, Candy. It's all the same thing. And it's -- you know, essentially, it's, you know, you're way or the highway.

CROWLEY: I just wanted to read for the listeners, the reaction to your cartoon from C.A.R.E., which I know has flooded you with e- mails among other things. And their executive director said, Defamatory attacks on Islam and on the Prophet Muhammad by media outlets or religious leaders only serve to harm out nation's image worldwide and divide America along religious lines. Unfortunately, it now seems to be 'open season' on Islam in certain religious and political circles.

Is timing everything? Go ahead I do want you to react to that.

MARLETTE: That's not true. It's not an attack on Islam, but an attack on Islamic terrorists. It was not on the religion. All of my cartoons that I've done on any kind of religious issue or topic has dealt with the extremists. I hear now not only have I gotten e-mails from, you know, his people, but also their Muslim people who agree with the cartoon. He does not speak for all Muslims. But this is a group who, they also attacked the ruling on the 1993 World Trade Center bombing. And they considered that an assault on Islam. So, you know, you have to consider the source. CROWLEY: I know that the paper, at least the Tallahassee paper, didn't run the cartoon. And I'm wondering what you think about that. I mean the executive editor defended your right to draw it, but wouldn't play it. Do you....

MARLETTE: They -- it went on the Web site and they've not had this kind of experience with the onslaught. I've had 30 years of experience. So, you know, it was new to them and they were trying to figure out what to do. It has run in "Knight Ridder" papers and it's run on the Web site. You know, it's gotten out. It wouldn't have gotten out so much if it hasn't been for C.A.I.R., this public, you know, this group, this Islamic group.

CROWLEY: Tell me, can you quantify the reaction in terms of other things? I know, you won Pulitzer Prizes for Tammy Faye Baker and some other cartoons that you've done. Can you quantify it in terms of outrage?

MARLETTE: Well, this has been a lot, but I've had lots before. But it's been organized. We've had probably close to 10,000 e-mails, but it's this, you know, a new age of communication and these kinds of groups. I've always had that. What interests me is the similarity between all of these groups. I mean, they all sound alike. They are all very literal minded. They are treating the cartoon as if it's a position paper, as opposed to art.

Cartoons shade more towards art than editorials. It allows people to interpret it and interpret it wrongly. But the thing that interests me is the similarity between Catholic, Protestant, Muslim and the left wing literary types who assailed my book. They all are literal minded and there's a kind of authoritarian trend that runs through the personality.

CROWLEY: Doug Marlette, Pulitzer Prize winner and author of the book "The Bridge" it's a great read.

Thank you, Doug.

MARLETTE: Thanks.

CROWLEY: Turning to state politics and the states facing a budget crunch. Incoming Massachusetts Governor Mitt Romney and his Lieutenant Governor Carrie Healy said they'll not collect their salaries while in office. Romney said the move is symbolic of the sacrifices that lie ahead for state residents. He said part of the salaries will go towards pay raises for members of their senior staff.

As we moved ahead, we'll take a look back. Up next, one of the mysteries of 2002 that kept that Washington wondering.

(BEGIN VIDEO CLIP)

CROWLEY (voice-over): It's time again to check your "I.P. I.Q."

Earlier we asked which world leader resigned on New Year's Eve 1999? Was it A -- Jiang Zemin, B -- Ehud Barak or C -- Boris Yeltsin? The correct answer is C. On New Year's Eve in 1999 Russian President Boris Yeltsin asked a national television audience for forgiveness and resigned. His resignation made way for the current Russian president, Vladimir Putin, to take office.

(END VIDEO CLIP)

CROWLEY: All day on CNN, we've been looking at the year's unsolved mysteries. Only one of those cases cost a politician his job. For that, we're going to go to CNN's Martin Savidge -- Marty.

MARTIN SAVIDGE, CNN CORRESPONDENT: Hello, Candy. It was a grim discovery in a Washington-area park, the fourth Wednesday in May that reignited a national obsession. An autopsy revealed the human remains belonged to Chandra Levy.

The disappearance of the 24-year-old intern the year before monopolized news coverage prior to September 11. It was a story of political power, sex and intrigue with the intern linked romantically to California Congressman Gary Condit.

Though the discovery of Levy's body answered the mystery of whether she was dead or alive, hopes that it would reveal much more quickly faded. The medical examiner couldn't say how she died or whether she'd been sexually assaulted. On-scene evidence suggested she was killed while jogging.

Police theory shifted to an attack by a stranger. Congressman Condit felt vindicated, but it was too late to save his political career. Two months earlier, voters in Modesto denied Condit an eighth term in office.

For Levy's parents, though, the nightmare continues with their questions about how their daughter died and who was responsible still unanswered and still one of the great mysteries of 2002 -- Candy.

CROWLEY: Thanks, Martin Savidge from CNN in Atlanta.

The Chandra Levy case dominated the news during a relatively slow summer. Reporters find often themselves scrambling for stories during this time of year as well. As Bruce Morton reminds us, there are notable exceptions.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The cliche, of course, is Washington is quiet over the holidays. Nothing much ever happens. Not always.

Pearl Harbor came in December, of course, and what a holiday that was. Guys joining the service, factories tooling up for war.

Back in 1959, Cuba's Fidel Castro overthrew Fulgencio Batista on New Year's Day. The bulletin many have interrupted the Rose Bowl and Castro has vexed America's presidents ever since.

(BEGIN VIDEO CLIP) RONALD REAGAN, PRESIDENT OF THE UNITED STATES: While we have fundamental disagreements about how human community should govern themselves, it's possible all the same for us to work together.

(END VIDEO CLIP)

MORTON: President Ronald Reagan and the Soviet Union's Mikhail Gorbachev held a December meeting here in 1987. The city was busy that year.

And then in December 1991, the Soviet Union collapsed.

(BEGIN VIDEO CLIP)

MIKHAIL GORBACHEV, PRESIDENT OF THE USSR (through translator): If this is the way the process goes, I will resign.

(END VIDEO CLIP)

MORTON: Lots of missed holiday parties that year. Diplomats, politicians all trying to guess what would happen next.

(BEGIN VIDEO CLIP)

CASPAR WEINBERGER, FORMER SECRETARY OF DEFENSE: I'm, of course, extremely happy with the president's decision, because I am completely innocent.

(END VIDEO CLIP)

MORTON: Christmas Eve 1992 President Bush George Herbert Walker Bush pardons six Iran-Contra figures including former Defense Secretary Caspar Weinberger who hadn't been tried yet and who in any case had been against selling arms to Iraq. He was charged with concealing a diary which had information about Iran-Contra.

December 19, 1998, the House of Representatives impeached Bill Clinton on two counts: perjury before a grand jury and obstruction of justice. The president's backers held a pep rally on the White House lawn.

(BEGIN VIDEO CLIP)

AL GORE, VICE PRESIDENT OF THE UNITED STATES: We must all acknowledge that invoking the solemn power of impeachment in the cause of partisan politics, is wrong. Wrong for our Constitution, wrong for the United States of America.

(END VIDEO CLIP)

MORTON: Lots of news that holiday season. Bob Livingston admitted extra marital affairs and withdrew his candidacy for House speaker. And the U.S. bombed Iraq for four days, saying it had violated weapons agreements.

No news during the holidays? The FBI arrested nuclear scientists Wen Ho Lee in December 1999 and that story ran on for months.

It was December 12, 2000, 36 days after the election, that the Supreme Court ruled in favor of George W. Bush in the Florida recount flap. Al Gore conceded the next day. And the holidays were full of news, transition stats, appointments and so on.

And if that isn't enough, Enron filed for bankruptcy in December 2001.

And this year, ask non-leader Trent Lott or non-candidate Al Gore.

Holidays are sometimes quiet here. Not always.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: Coming up next, a New Year's visit with a sailor at sea. We'll speak with a member of a crew aboard the USS Constellation in the Persian Gulf area.

(COMMERCIAL BREAK)

CROWLEY: And now to Yemen where investigators are looking for possible ties between the killing of three American missionaries and organized terror groups. CNN's Rula Amin reports by video phone.

(BEGIN VIDEOTAPE)

RULA AMIN, CNN CORRESPONDENT: U.S. investigators are here on the ground working with the Yemeni investigators trying to determine if this was the work of a small group or if this was part of a larger plot. There is no link established yet with al Qaeda.

However, there are suspicions that this may be the work of a new group that is targeting foreigners as well as secular Yemeni figures. And this is something that the Yemeni authority is trying to check.

The U.S. ambassador we spoke to here praised the Yemenis efforts in trying to bring the assassins and bring -- trying to prevent any future attacks.

This is what he has to say about the Yemenis efforts.

EDMUND J. HULL, U.S. AMBASSADOR TO YEMEN: Yesterday, the government laid in the people's assembly out a very, very strong case against terrorism and the harm that terrorism is doing to Yemeni interests and calling upon all political parties and political forces in Yemen to make common cause with the government to counter and eliminate this terrorism.

AMIN: In Yemen, every person almost we spoke to condemns the attack. People here were shocked. The foreign minister also condemned it in the strongest words. And he said that his country is still committed to fighting the terrorism and will do all it can to cooperate with the U.S. to try to prevent any future attack.

ABOU BAKR AL-QURABI, YEMENI FOREIGN MINISTER: I think (UNINTELLIGIBLE) is abhorrent action that we've seen in Jibla. Because there is no logical reason for this and systemly (ph), humanly unacceptable.

AMIN: Two of the victims have been buried in Jibla, in the town where they had worked for years at the missionary hospital. This was their wish in their wills. One of the bodies, the third victim, has been transferred to the capital San'a on its way to the United States.

The pharmacist who was also injured in the attack was also transferred to the capital and we are told he's in a stable condition.

Rula Amin, CNN, San'a, Yemen.

(END VIDEOTAPE)

CROWLEY: When we return, the ins and outs of the new political year courtesy of Tucker Carlson and Margaret Carlson.

And the Lott factor: He is out as Senate majority leader, but he still may cause problems for the president.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I draw my career in the United States Congress to a close with a grateful heart, a high spirit.

(END VIDEO CLIP)

CROWLEY: Joining us now with a look ahead to 2003: Margaret Carlson of "TIME" magazine, Tucker Carlson of CNN's "CROSSFIRE."

OK, we gave you some homework.

(LAUGHTER)

MARGARET CARLSON, "TIME": You did. And on New Year's Eve.

CROWLEY: I know. I'm sorry. To do what's in and what's out.

Margaret, let's start with your list.

M. CARLSON: I looked at today's paper and I realized that Larry Lindsey's designer war costing $200 billion is out. And Mitch Daniels' estimate of the war costing $50 billion, a generic war, is in. I don't know who is going to prove to be right here. But Larry Lindsey doesn't have a job any longer and Mitch Daniels does.

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Yes, I'm for the generic war.

M. CARLSON: A half-price war. CROWLEY: If you can do it for $50 billion, why not?

M. CARLSON: Well, everything is 75 percent off in the stores now that they didn't make any money.

T. CARLSON: It's the after-Christmas estimate, yes.

CROWLEY: What's your second one?

M. CARLSON: What else?

Now that United Airlines has gone bankrupt, I think the airlines requiring your first born, seven-day advanced purchase, Saturday night stay-over is over. And now we're just going to be able to fly when we want without planning months in advance to get a decent airfare.

T. CARLSON: And if they bring back the peanuts, that will make it perfect.

M. CARLSON: Foil wrapped peanuts.

T. CARLSON: That's exactly right. Amen.

CROWLEY: Wait a minute. You think it's easier to fly now, like hard flying is in or hard ticket purchasing is? But aren't they adding a bunch of -- like, it's hard to change tickets now. You've got to know where you're going.

M. CARLSON: It's still hard to change, but, having done an airfare just recently, getting it within three days, a $300 fare to L.A., I think it's much easier -- and no Saturday night stay-over.

T. CARLSON: But they rifle through your bags.

(CROSSTALK)

M. CARLSON: And rip the lock off.

CROWLEY: Three?

M. CARLSON: National Guard out, draft in. Charlie Rangel calling for the draft to spread the pain over the whole society, I think that is a great thing. Senator Tim Johnson ran on having a son who is actually in the military, the only member of Congress, I think the only member of Congress with a son or daughter in the military.

CROWLEY: And let me move you to four. Otherwise, Tucker will get no airtime whatsoever.

M. CARLSON: Oh, that's OK. Go ahead.

Oh, is it still my turn?

T. CARLSON: Yes, hit us with your fourth.

M. CARLSON: No more pilgrimages to Bob Jones University or wrapping yourself in the Confederate flag. All candidates will now be for affirmative action and voting rights laws.

CROWLEY: Not a bad old and new.

Go ahead.

T. CARLSON: I would say, first up, John Edwards out, Hillary Clinton in. John Edwards, who looked so promising to so many last year has turned out to be not a very promising presidential candidate. Hillary Clinton has made the list with Jennifer Lopez as a most admired woman. I predict she'll not wait until 2008 to wreck the Democratic Party. She'll start right in 2004.

M. CARLSON: Oh, that's very brave. No, she'll wait to wreck it until '08.

T. CARLSON: I hope not.

My second is, nuclear weapons out, nuclear power in. The Bush administration is still going to go after countries that are attempting to acquire nuclear weapons. But I predict, by the end of the year, both parties will have come up with comprehensive plans for alternative energy to get America off fossil fuels. I think that is going to be one of the bigger stories of the coming year.

CROWLEY: Including nuclear energy.

T. CARLSON: I absolutely think nuclear energy. I think you're going to see Democrats, brave Democrats, get up and say: Look, actually, nuclear energy can be pretty safe. It's not terrible for the environment if managed well. And it could make us less dependent on Saudi Arabia and Venezuela and that's a good thing.

M. CARLSON: I lived three miles from Three Mile Island. I beg to differ.

T. CARLSON: Well, you turned out OK, Margaret. That's just my opinion.

CROWLEY: No harm done here.

M. CARLSON: I have a couple extra limbs, something under my head here.

T. CARLSON: Well, it may have affected your political opinions.

And then, finally, I'd say Jesse Jackson out, Al Sharpton in as the political voice of black America. This has been a long time coming. Can't come too soon. I think Al Sharpton is going to run not necessarily a credible campaign for president, but he's going to run a campaign that requires everyone else running as a Democrat to come and kiss his ring. He'll be a force by the end of 2003.

M. CARLSON: He's the Democrat's Trent Lott the coming year.

T. CARLSON: He is, but he's actually...

M. CARLSON: Only you can't get rid of him, as the Republicans did of Trent Lott.

T. CARLSON: But he is the pure distillation of what Democrats believe.

M. CARLSON: Oh, he is not.

T. CARLSON: I'm a fan, I have to say.

M. CARLSON: It's just a terrible, a terrible problem.

CROWLEY: But isn't this a problem for Democrats, Margaret?

M. CARLSON: Oh, it's a terrible problem. And you can't stop somebody from running. There's no party discipline. It makes up want to have the smoke-filled room.

T. CARLSON: But every single candidate, every single candidate in the Democratic primary will wind up at Al Sharpton headquarters, National Action Network headquarters, in Brooklyn asking for his endorsement. You'll see this.

CROWLEY: Next New Year's Eve, we're going to bring you here and see if you were right about in and out.

M. CARLSON: If we're still in.

CROWLEY: Exactly. And that's -- we never know.

Margaret Carlson, Tucker Carlson, thanks very much.

M. CARLSON: Thanks, Candy.

T. CARLSON: Happy new year.

M. CARLSON: Happy new year.

CROWLEY: In his annual report tomorrow, Chief Justice William Rehnquist is expected to call for increased funding for the federal courts and to criticize political wrangling over judicial nominations. But that wrangling may actually intensify in the year ahead.

And, as CNN's Kelli Arena reports, Trent Lott may be to blame.

(BEGIN VIDEOTAPE)

SEN. TRENT LOTT (R-MS), MINORITY LEADER: When Strom Thurmond ran for president, we voted for him. We're proud of him.

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): That December tribute at Senator Strom Thurmond's 100th birthday party was the beginning of the end of Trent Lott's leadership run in the Senate.

Many saw it as a tribute not to Thurmond, but to his previous segregationist views. Even though Lott resigned as majority leader and has been replaced, the controversy still threatens to escalate the already bitter battle over judicial nominees. SEN. KAY BAILEY HUTCHISON (R), TEXAS: I think the Lott controversy has brought to the forefront once again that we all have to be more sensitive in our race relations and in our outreach to minorities and making sure that we do that.

ARENA: One possible casualty: Charles Pickering, a conservative district court judge in Mississippi. His nomination to the appeals court was blocked by Senate Democrats over his civil rights record, a charge his supporters say is unfair.

SEN. RICK SANTORUM (R), PENNSYLVANIA: He's has quite an admirable record of race relations in Mississippi that got the unanimous support of the entire African-American community in Mississippi, including the NAACP in Mississippi.

ARENA: The president had initially said he would renominate Pickering, but has since backed off. Sources say the White House offered Pickering a so-called recess appointment, a one-year gig that does not need congressional approval, but he refused.

SEN. PATRICK LEAHY (D), VERMONT: I would hope that they would look at the record that was made during the last Congress, in going over his background, the number of times he was reversed on cases, the number of times where he did not follow the law as laid down in his own circuit, and that they would say they could probably do a better choice than that.

ARENA: A coalition of civil rights groups is hoping to capitalize on the Lott controversy to block other judicial candidates as well. They've targeted Priscilla Owen of Texas, Carolyn Kuhl of California, Terrence Boyle of North Carolina and Jeffrey Sutton of Ohio.

WADE HENDERSON, LEADERSHIP COUNCIL ON CIVIL RIGHTS: The administration promoted a number of nominees with, we believe, a demonstrated hostility to civil rights, to women's rights, and to matters of concern to many Americans. We certainly hope the administration will use this opportunity surrounding the Lott controversy to rethink some of its nominees.

ARENA: But legal observers are not sure the issue still has legs and say it's hard for the minority to sustain 41 votes to filibuster a nomination.

BILL FRENZEL, BROOKINGS INSTITUTION: Those things can't be sustained forever. And the Democrats have to be careful where they spend their ammunition.

ARENA (on camera): What's more, while some Republicans publicly say the Lott issue has made them more cautious, privately, they say they're anxious to get even with Democrats for not allowing judges to come before the full Senate for a confirmation vote.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE) CROWLEY: Another unsolved mystery from the year 2002 straight ahead: What caused so much sickness at sea? The cruise ship mystery illness when we return.

(COMMERCIAL BREAK)

CROWLEY: As we near the end of 2002, we rejoin Martin Savidge at CNN Center in Atlanta for a look at another of the mysteries from the year just past.

Marty, I'm told you're going to focus on a mystery on the high seas.

SAVIDGE: You're absolutely correct, Candy.

A lot of people love to read mysteries when they're on vacation, but not many people like to get caught up in them. But that was the case. In October, 2002, it brought a mystery at sea born, where else, but in the heart of the Bermuda Triangle. Passengers on the vacation of a lifetime on six different cruise ships suddenly found themselves prisoners of their own stateroom bathrooms.

All told, more than 1,500 passengers came down with symptoms of an obscure stomach bug named after a landlocked Ohio town, the Norwalk virus. The floating palaces were swabbed and disinfected, as Centers for Disease Control officials looked on. Inspectors ruled out contaminated food or water. And though the Norwalk virus had struck at sea before, never had so many on so many different ships suffered in such anymore numbers.

The outbreak even infected some cruise line stock prices, which dropped as much as 20 percent. The high seas mystery remains unsolved -- back to you, Candy.

CROWLEY: Thanks very much, Martin Savidge, in Atlanta.

Now back to terra firma. Beyond Iraq, North Korea and the war on terror, President Bush also has a full slate of domestic issues awaiting his attention in the new year.

We asked John King to preview the top White House priorities in 2003.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): The economy and health care dominate the president's domestic agenda for the new year. But already questions about how much can be done given the attention and money being focused on Iraq, al Qaeda and other challenges overseas.

KENNETH DUBERSTEIN, FORMER REAGAN CHIEF OF STAFF: I think you're going to see a heavy concentration in these months ahead on national security items and making sure that terrorism doesn't revisit American shores. KING: Goal one of the Bush domestic agenda is an economic package that mixes more tax cuts and business incentives with an extension of unemployment benefits.

MATTHEW DOWD, BUSH POLLSTER: From a political perspective, it's the economy, the economy has a tendency to drive whether or not a president is reelected.

KING: Health care ranks next, beginning with an issue critical to elderly Americans.

NICK CALIO, WHITE HOUSE CONGRESSIONAL LIAISON: There needs to be Medicare reform with the prescription drug benefit and we'll ask Congress, he will ask Congress to take a very hard look at that very early.

KING: Democrats say compromise on the issue will be hard to come by unless Mr. Bush moves their way.

STANLEY GREENBERG, DEMOCRATIC POLLSTER: The administration again and again and again very beholden to pharmaceutical industry, insurance industry, and very reluctant to move legislation that could really make a difference for people.

KING: Midterm election gains mean Republicans will control both chambers of Congress and the president's aggressive campaigning was a major factor.

GREENBERG: Well, that gives the president, you know, a lot of say. Now, he also is going to be held accountable. He's also going to be held, I think, accountable for whether the economy moves, whether they address health care and a whole range of other issues.

KING: Other immediate Bush domestic priorities include faster action on judicial nominees, curbs on medical malpractice lawsuits and reauthorization of the 1996 welfare reforms. On a much slower track are discussion of major tax reforms and the president's controversial campaign 2000 promise to allow some Social Security taxes to be invested in private stock accounts.

CALIO: He has not given up on that position. He will continue to push that position. Congress sometimes moves more slowly.

KING: The president will lay out his agenda in detail in his State of the Union address a month from now.

(on camera): Officials here view the first six months of the new year as the best window for action on the president's domestic goals. As one top adviser put it, the closer you get to the 2004 campaign, the less you can expect to get done.

John King, CNN, the White House.

(END VIDEOTAPE)

CROWLEY: Of the issues on the president's 2003 agenda, health care may contain the most political danger for the White House.

With me is now is political analyst Ron Brownstein of "The L.A. Times."

Ron, how different is it going to be? Health care, I'm assuming, something will happen, but how hard is it going to be?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, there's a variety of problems. And that's part of the issue.

One of the key concerns is going to be, as Nick Calio suggested, prescription drug benefit and Medicare reform. One thing that President Bush has made clear right from the beginning of his emergence as a candidate in 2000 was that he didn't want to simply add a prescription drug benefit to Medicare without fundamentally reforming the program to try to save money before the baby boom retires.

With the Republicans controlling both chambers, they now have an opportunity to push through the Republican version of a prescription drug plan, which relies on insurance companies to deliver the benefit. The key question will be how far to go in trying to restructure the program itself. It affects 40 million people, Candy. And Democrats will be waiting to challenge almost whatever the president does.

CROWLEY: Let me ask you about Bill Frist's role in this. He's a doctor. He's been working on some of these health care issues. Is there already a like mind between the White House and Bill Frist?

BROWNSTEIN: Yes. There is a synergy, because Frist's involvement in health care has been probably his top priority since he got here after the '94 election. And his thinking has already influenced Bush's agenda.

In 2000, Bush endorsed a version of Medicare reform and prescription drugs benefit based largely on what Bill Frist and John Breaux had proposed earlier in Congress. Similarly, on the uninsured, which is another issue that is coming back -- because we're back in downward spiral of rising costs and declining access. Costs are going up. Fewer people have health insurance.

On that front, Bush wants to act also. And there, the idea, the Republican idea, is tax credits for individuals to buy insurance, again, something that Frist has been involved with Breaux in promoting in Congress.

CROWLEY: So, where is the difficulty here for the White House? I mean, they've got a Republican House, a Republican Senate. Is the difficulty just getting it past the Senate?

BROWNSTEIN: The difficulty is going to be getting it past the Senate, I think. And also it's going to be finding the money for all of these ideas, against the competing concerns of economic stimulus.

If they can pass a budget in the Senate, they can then perhaps pass a prescription drug bill through what is known as reconciliation. They would only need 51 votes to do that. They wouldn't need the 60. Democrats couldn't stop it.

Health insurance for the uninsured is going to be tougher. They also have a third problem, Candy, which is that the states are in a crisis, a big budget crisis of their own. They're cutting back on Medicaid for the poor, at the same time that private insurance is receding. So, you could see a dramatic increase in the uninsured from that front as well.

There's going to be pressure from the governors for them to act there. And there, the issue is going to be, do they have the funds to come up with at a time when they're in deficit as well?

CROWLEY: Let's take out policy and do some pure politics here.

We expect John Edwards, senator from North Carolina, to at least announce that he wants an exploratory committee later this week. Where is his star at this point? He was the big new face. Where is he now?

BROWNSTEIN: Yes, he's going to have to, in effect -- it's amazing to say this. He's almost going to have to rehabilitate himself a little bit with the insiders a year before anybody actually votes.

A year ago, he was probably almost even in the polls with, say, John Kerry of Massachusetts, both around five or six points. Today, in the national polls, Kerry would be considerably beyond that, 16, 18, 20. Edwards is still around three, four, five.

There was a sense among some of the insiders that he did not handle well some of his public appearances, not too steady on the issues. He has given a series of speeches in the last few weeks that have been substantive. He has a lot of charisma as a one-on-one campaigner.

But I think he's now going to have to go out and show the Democratic sort of insiders, the invisible primary voters, in effect, that he has an audience, that he can connect with voters, and that he can reestablish himself as a factor in this race, because, right now, he's not seen as part of the top tier.

CROWLEY: Real quickly, less than 30 seconds, who are we going to hear from next, tick, tick, tick?

BROWNSTEIN: I think we're going to hear from Dick Gephardt, Joe Lieberman very soon, Tom Daschle, one way or the other, in January.

CROWLEY: Ron Brownstein, "L.A. Times," happy new year.

BROWNSTEIN: Happy new year to you.

CROWLEY: Thank you.

And still ahead on this New Year's Eve: Who was the life of the party in 2002 and who might as well have worn a lamp shade on his head? Our Bill Schneider will count down the top "Political Plays and Bloopers" of the year.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ELIZABETH DOLE (R), NORTH CAROLINA SENATOR-ELECT: Oh, wow. What a night.

UNIDENTIFIED MALE: Thank you. Thank you.

(END VIDEO CLIP)

CROWLEY: While you ponder your own New Year's resolutions, you may want to consider the example set by some of America's leading politicians, for better and for worse.

Our Bill Schneider has been keeping tabs on party animals all year long -- Bill.

SCHNEIDER: Well, Candy, it's New Year's Eve. And what would New Year's Eve be without a few party favors? Before all the acquaintances are forgot, we're going to bring to mind the top "Political Plays and Bloopers" of 2002 and favor both parties with prizes.

(BEGIN VIDEOTAPE)

(voice-over): The play of the year for Republicans goes to Karl Rove for masterminding the GOP victory strategy in the 2002 midterm election. Rove persuaded President Bush to do something presidents don't normally like to do, put his political capital at risk.

The president campaigned tirelessly for Republican candidates, 15 states in five days. The election became a test of President Bush's clout. Bush campaigned in Colorado, Georgia, North Carolina, South Carolina, Minnesota, Missouri, Texas. All of those states could have gone Democratic and made the president look weak and ineffectual. Rove knew that.

KARL ROVE, SR. WHITE HOUSE ADVISER: If we win, it will be because of the president and the quality of our candidates and our campaigns. And if we lose, it will be because of me.

SCHNEIDER: In the end, the 2002 election was a personal triumph for President Bush and a strategic triumph for Karl Rove, who understood the first rule of political capital: If you got it, use it.

The play of the year for Democrats goes to Al Gore for not running and sparing his party and his country a weary rematch.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: I felt that the focus of that race would inevitably have been more on the past than it should have been, when all races ought to be focused on the future. SCHNEIDER: Democrats greeted Gore's decision with relief. In a rematch between Bush and Gore, Democrats would have been forced to run on the message, "We told you so," not a winning message right now. Now the party can move forward and consider new faces and new ideas. You can say this for Al Gore. He knows how to leave the stage.

GORE: And tonight, for the sake of our unity as a people and the strength of our democracy, I offer my concession.

SCHNEIDER (on camera): But wait, we have bloopers to hand out as well.

(voice-over): The Republican blooper of the year goes to -- guess who?

LOTT: I want to say this about my state. When Strom Thurmond ran for president, we voted for him. We're proud of him. And if the rest of the country would have followed our lead, we wouldn't have had all these problems over all these years, either.

SCHNEIDER: With that, Senator Lott ended the Republican honeymoon and his career as majority leader. Republicans were instantly forced to demonstrate that they are not a party that traffics with racism, starting with the president.

BUSH: Recent comments by Senator Lott do not reflect the spirit of our country.

SCHNEIDER: The Democrats' blooper of the year? October 29, four days after Minnesota Senator Paul Wellstone died, suddenly and tragically, in a plane crash. In a breathtaking lapse of judgment and taste, Democrats turned the memorial service into a campaign rally.

UNIDENTIFIED MALE: For Paul Wellstone, will you stand up and keep fighting for social and economic justice? Say yes!

SCHNEIDER: Even Wellstone's son got into the act.

MARK WELLSTONE, SON OF PAUL WELLSTONE: We will win! We will win! We will win!

SCHNEIDER: That memorial service abruptly ended the moratorium on campaigning in Minnesota and opened the way for President Bush to go there, where he first paid respectful tribute to Wellstone.

BUSH: Paul Wellstone was respected by all who worked with him. He'll be missed by all who knew him.

SCHNEIDER: And then campaign for the Republican, calling him a healer.

BUSH: Somebody who is willing to work hard to bring people together for the common good. That's the Norm Coleman I know.

SCHNEIDER: The Wellstone memorial-service-turned-rally ended up rallying Republicans, while Democrats paid the price. (END VIDEOTAPE)

SCHNEIDER: 2003 is here. And you know what that means: more plays, more bloopers, because, you know, politicians will always be the same: smart, smart, and stupid.

Candy, happy new year.

CROWLEY: Well, happy new year, Bill. It's a little hard to carry on a serious discussion with you at the moment, but let's try.

Did you have any runners-up here? Knowing you, you had an entire list of things and we could have given you the whole show. What didn't you put in?

SCHNEIDER: Well, I thought the state of Georgia deserved a special prize, because they provided the most interesting stories in the primary and in the general election.

In the June primary, the state of Georgia defeated Cynthia McKinney, who was very much on the left in an African-American majority district. And, at the same time, they defeated Bob Barr, who was a kind of poster boy for conservatives. Then, in the November general election, they pulled a couple of big surprises. They defeated two Democrats who were supposed to win, Senator Max Cleland and Governor Roy Barnes.

So, something's going on down there in Georgia.

CROWLEY: Bill, thanks very much. I'd wish you a happy new year, but you apparently don't need any encouragement from me. So have fun. We'll see you back here next year.

SCHNEIDER: OK, Candy.

CROWLEY: Just minutes from now, the new year will arrive in Jerusalem, Athens and Istanbul. Wherever you will celebrate New Year's, all of us at CNN wish you a safe and happy new year.

And that's it for INSIDE POLITICS in 2002. I'm Candy Crowley.

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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