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Bush Economic Plan Continues to Draw Early Fire

Aired January 9, 2003 - 16:00   ET



ANNOUNCER: Out of the White House, and on the defensive. President Bush promotes his economic stimulus plan.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is a fair plan. It is an important plan, and it's a plan that will help people find work.

ANNOUNCER: Senate moderates try to chart their own course for the president's plan.

UNIDENTIFIED MALE: This tax cut as he has proposed, will not pass, I think, in the Senate.

ANNOUNCER: Rich versus poor, us versus them. Will class warfare help Democrats this time around?

The thrill of being a freshman class president. We'll watch a couple of newcomers in action.

UNIDENTIFIED MALE: I think it is wonderful to be 54 years old, be a freshman, and get to be class president.


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

WOODRUFF: Thank you for joining us. Well, it is a ritual here in Washington. After the president rolls out a new proposal, he hits the road to sell it, while critics take shots at it.

In this "Newscycle," President Bush went to a flag factory in Virginia to argue that his economic stimulus plan will spur small business growth and put cash in the hands of ordinary Americans.

But on Capitol Hill, a number of moderate senators, who would be key to getting the president's plan passed are coming out against his proposed tax cut.

Just ahead, I will talk to one of them, Democrat John Breaux. Our Jonathan Karl, meanwhile is on Capitol Hill now. Our John King is at the White House. Let's turn first to Jon Karl -- Jon, what are they saying?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, if you remember when the president passed his last cut, he could not have done so without the support of some Democrats in the Senate.

But of the nine Democrats who voted for the president back then on the tax cut, none have yet come out in favor of it this time around, and if fact, most of them have been sharply critical.


The Bush economic plan has hit Capitol Hill with a thud as the Democrats whose helped the president pass his last tax cut are leading the charge against this one.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: In June of 2001, I voted for the president's tax plan, and I believe it was truly a different time: 9/11 had not taken place; war had not appeared on the horizon. Revelations of corporate fraud had not surfaced, and a recession was not evident.

KARL: Far from supporting the president on another tax cut, Feinstein wants to scale back the last one, canceling cuts for people in the top bracket, and she has a Republican ally in that effort who says tax cuts will lead to higher deficits.

SEN. LINCOLN CHAFEE (R), RHODE ISLAND: I see this as a Republican issue, with all due respect to Senator Feinstein. It was Republicans for years that fought for the deficits.

KARL: Chafee voted against the president's last tax cut, but other moderate Republicans who supported the president then are luke- warm now. Susan Collins of Maine doesn't like some of what is in the plan, specifically the elimination of the tax on dividends, and she doesn't like something that was left out.

SEN. SUSAN COLLINS (R), MAINE: I thought there was going to be a $10 billion package of fiscal relief to the states included. That wasn't.

KARL: Even the plan's defenders in the Senate say it will have to be changed before it can pass.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Will it pass the Senate intact? Probably not. Nothing ever does. We certainly hope to have a bipartisan consensus.

KARL: Hutchison touted the support of Democrat Evan Bayh for one aspect of the plan, the elimination of the so-called marriage penalty.

Bayh says he may support the White House on other tax cuts, even if they result in higher deficits in the short run. SEN. EVAN BAYH (D), INDIANA: We ought to focus on growth, job creation. Let's get some momentum behind this economy, and then take a hard look and make some tough decisions about getting that deficit under control for the long term.


KARL: And Republican George Voinovich of Ohio tells CNN that if this tax plan came up for a vote right now, that he would be voting no, joining Lincoln Chafee as the other Republicans who said definitively they would vote no on this plan.

Several other Republicans in the Senate have been critical of certain aspects of the plan, including the size of it. But over in the house, Judy, a much different situation. As a matter of fact, Majority Leader Tom DeLay, the Republican, said that he predicts the House will pass everything in the president's plan, and add a few more tax cuts of their own -- Judy.

WOODRUFF: All that jives with what Senator John Breaux was telling me today, and we are going to hear from him a little later. John Karl, thanks very much.

Well, John King, what about the fact that the White House, here they are. They have put out this plan, but if they can't count on the kind of support they had two years ago, how do they expect to get it passed?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Judy, in the end, the White House is predicting it will have that support and enough Democrats when it comes to a vote in the Senate.

How will they get it passed? The White House says very much like the last Bush tax cut, begin with a victory in the House and rely on Republican discipline. Jon Karl just talking about it. Tom DeLay and Denny Hastert are the two most important people to the president in the short term. Also part of the plan is to get the president and others out selling it.

One of the things Democrats have criticized the most is ending this income tax on dividends. The critics of the plan -- the Democrats especially say this is a boon to wealthy investors. Mr. Bush traveled just outside of Washington today to a flag factory. He says it is not a boon to wealthy investors, it's something that will help create jobs.


BUSH: Abolishing the double taxation will increase the return on responsible investing, which will draw more money into the markets, which will make it easier for people to have capital to build plant and equipment, which means more people will find work. I mean, this is a plan to encourage growth, focusing on jobs.

(END VIDEO CLIP) KING: The president also lobbying members of Congress first hand. You see Mr. Bush here. He is heading over to the Old Executive Office Building. A briefing there for key members of Congress, many of them just now leaving the White House. Among those on hand, Senator Max Baucus, a key Democrat in this debate, the ranking Democrat on the Senate Finance Committee.

Not yet, he said, walking out just a few moments ago when I asked him if the administration had won his vote. All this part of the administration outreach to current members of Congress. We've seen a former member of Congress here today as part of the outreach, the former House speaker, Newt Gingrich here for meetings at the White House on the economic plan as well.

The Bush administration hoping to get its conservative allies, whether in office or out of office to be making the case for the president's plan in the days and weeks ahead and tomorrow here in Washington, Judy, vice president Dick Cheney will join the act, a big speech to the Chamber of Commerce. Again, they are hoping to get a victory in the House, generate momentum from that, then deal in the Senate, and they say yes, there will have to be some compromises to get those votes.

WOODRUFF: Yes, there will have to be compromises, John, and where do we think they may be ready to compromise, or is it too early to know?

KING: Remember the last tax cut debate. At this point in that debate, everyone was saying the president would never get a ten year $1 trillion tax cut through the Congress, and the administration said, Yes, it would negotiate, but it would not negotiate with itself, and it would not negotiate before running up some momentum.

The White House says it will not talk about that right now. The dividend tax cut is one thing most people will assume will come up in the negotiations. The president wants to abolish taxes on dividends completely. Some think if he wants to get it through the Senate, he might have to agree to 50 percent.

But the administration says, let's get the plan moving through the Congress, we will deal with the specifics of compromises when they have to. They believe here the best strategy for them is to get a win in the House, take the momentum from that, and then deal with the Senate.

WOODRUFF: The cost of those dividend changes something like 360 billion, which is about half of the entire package.

KING: Give you a little room to negotiate.

WOODRUFF: That is right. All right, John, thanks very much.

Well, Louisiana Democrat John Breaux was instrumental in getting President Bush's first tax cut plan through the Senate in 2001.

I spoke with Breaux today, and I asked him if he thinks the president will get his new tax cut proposal through Congress this time.


SEN. JOHN BREAUX (D), LOUISIANA: This tax cut, as he's proposed, will not pass, I think, in the Senate without modifications. I think something can pass, and I think something will pass. I don't think he really expects the bill as he's been introducing it to be the bill that's going to be ultimately passed.

WOODRUFF: Why is it not acceptable in its current form?

BREAUX: Well, conditions have changed since the last time, No. 1. Now we have a deficit, and it is getting larger. We have the potential for a war in Iraq that estimates say could cost anywhere between $60 billion and $200 billion, and tax cuts are not free. We're going have to pay for it. The way you pay for it is to increase the size of the deficit. There's real concern about that. There is a real concern about some of the features of his proposal. The dividend tax exemption, people question the size of it. It is over half the whole package, and whether it is effective or not, whether it's really going to stimulate anything.

WOODRUFF: You don't sound like the same Democrat who was willing to work with the president in '01. Did he overreach this time?

BREAUX: I think he has put out a plan that he knows is going to have to be cut back in many aspects of it. I think that they decided to go for the whole package knowing that they are going to have to compromise along the way to get most of the package.

I'm still really willing to work with him and plan to work with him and other Democrats and Republicans, moderate Republicans, to try and get something that we can call a real, true stimulus package. I think we will.

WOODRUFF: You have got a number of your colleagues who are thinking about running -- who are either are running for president, or who are thinking about running for president. How much accommodation, how much compromise, how much work is going to get done in the Senate this year?

BREAUX: Well, I said that one of the smallest caucuses we're going to have in the Senate is the caucus of non-presidential candidates as so many of them are, in fact, running.

I don't think that that is an impediment to getting things done. I mean, it is a challenge. I think people want to show that they can get things done. And the Senate is 51-49. I mean, I like that position because it forces compromises, and I think that's what the American people want us to do.

You have Democrats who running in the Senate and in the House that are going to be running, and the president's running also. I mean, there's a lot of candidates out there from both parties, and I think that that shouldn't stop the functioning of Congress. We are going to have to say that we can get things done. The worst thing to run on is a record of getting nothing done.

WOODRUFF: One other thing. The president has said that he's going to resubmit the nomination of Charles Pickering to the Federal Appeals Court. A number of your colleagues have a real problem with Mr. Pickering. Where are you going to come down on this, assuming he gets to the floor?

BREAUX: Well, I think it is bad timing. I mean, I thought that they would have waited, certainly waited until the controversy over Trent Lott being removed as majority leader was behind us. I thought they'd probably wait a year, and let this thing sort of die down. I was very surprised that it came right out of the box and nominated a person who has questions about him with regard to civil rights. And it's also coming from the state of Mississippi, and knowing that it's a person who is very close to the former majority leader, Trent Lott. I thought the timing was very unusual.

WOODRUFF: Would you vote for him if he came to the floor?

BREAUX: I really don't know. I want to see what the committee does, again; whether it get out of committee. I think it's a battle that probably wasn't necessary. Certainly not in the first year of this session of the Congress.


WOODRUFF: Two other things Senator Breaux told me. No. 1, that he said Trent Lott himself did not know that the administration was going to resubmit the nomination of Charles Pickering right now.

And secondly, he said this morning when he met with the Treasury secretary, John Snow, he said to John Snow -- Treasury secretary designate -- he said, You, the president, have put forward an economic plan much bigger than what you're actually going to get, isn't that right? And he said, Mr. John Snow, nodded his head and said, Uh-huh, meaning the administration recognizes they're going to have to compromise.

Well, coming up we'll get Republican take on Bush-o-nomics and tax cuts from House GOP Conference Chair Deborah Pryce.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider in Miami. Class warfare, as the president calls it, is making a comeback. I look at the political track record of pitting the haves against the have nots.

WOODRUFF: Also ahead, where corn and presidential politics are king. We'll check out the Democratic action in Iowa.

And did Senator Hillary Clinton crack a joke or snub a neighbor?



GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: My friends, flag sales are doing well, and America is doing well. And we should understand that and we should appreciate that.



WOODRUFF: Did your stocks make money today? We'll go live to Wall Street for the closing numbers.

Plus, why is the governor of New Mexico playing a key role in the nuclear weapons dispute with North Korea? The answer coming up on INSIDE POLITICS.



WOODRUFF: Here in Washington, early debate over the president's economic stimulus package is centered on an old argument: Republicans favor the rich, the line goes, at the expense of everyone else.

Well, our Bill Schneider is with me from Miami now to talk about the politics of money -- Bill.

SCHNEIDER: Judy, class politics is back. The rich versus the poor. Haves versus havenots. The coupon clippers versus the toiling masses.

Does it mean happy days are here again for Democrats?


SCHNEIDER (voice-over): President Bush's economic plan overwhelmingly favors the wealthiest Americans.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And there's no better way to help our economy grow than to leave more money in the hands of the men and women who earned it.

SCHNEIDER: Democrats are aghast at the brazenness of the president's proposal.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: This plan is obscene. It is wrong in how it is directed to the wealthy. It is wrong in how it is timed, to benefit the rich, not this year, but years beyond this year.

SCHNEIDER: Mr. Bush's response: There they go again.

G.W. BUSH: You hear a lot of talk in Washington, of course, about, you know, this benefits so and so or this benefits this -- the kind of the class warfare of politics.

SCHNEIDER: In fact, Democrats have gone there many times. Way back in 1896, William Jennings Bryan lambasted the rich. Thou shalt not crucify mankind upon a cross of gold.

As recently as 2000, Al Gore ran on the theme the people versus the power. Funny thing though: both of them lost.

Democrats know class politics paid off big time for them in the 1930s, when President Roosevelt attacked the economic royalists who opposed the deal.

But notice how it happened. President Roosevelt was doing something to turn the economy around. Republicans were resisting.

Now, President Bush is proposing his own big, ambitious plan to turn the economy around. Exactly what his father failed to do in 1992.

G.W. BUSH: I proposed a bold plan, because the need for this plan is urgent.

SCHNEIDER: Meanwhile, Democrats are resisting.

SEN. JOHN EDWARDS (D), NORTH CAROLINA: It's an enormous budget buster. We're already in deficit spending.

SCHNEIDER: See what's happened? Democrats have taken up the cause of fiscal responsibility; the same hopeless cause that Republicans defended in the 1930s.


SCHNEIDER: House Democrats have come up with their own plan, but it's far more modest than President Bush's. In fact, Bush's plan is five times larger. The Democrats can't afford to be bold. That's their problem -- Judy.

WOODRUFF: Hmmm. Can't afford to be bold. All right, but Bill Schneider can.


WOODRUFF: Thanks very much. All right, Bill.

Well, we kick off our "Campaign News Daily" with the early race of signup campaign talent. Democrat John Kerry has signed two veteran field hands to help run his campaign in Iowa. Former state party chairman John Norris will be Kerry's Iowa campaign manager. Veteran fund-raiser Jerry Crawford has also signed on with Kerry. Crawford chaired the Iowa campaigns of Bill Clinton and Michael Dukakis. Kerry plans a three-day trip to Iowa next week.

Two-time presidential candidate Gary Hart says he has not made up his mind about a White House run in 2004. The former Colorado senator plans several major speeches and trips to key states, including Iowa, before he says he'll make a decision.

Georgia Democrat Zell Miller's decision to leave the Senate at the end of his term has opened the door to a wide-open field of potential replacements. Peach State Democrats already named as possible candidates include recently defeated Senator Max Cleland and Congressman John Lewis. Also mentioned, Lieutenant Governor Mark Taylor and Secretary of State Kathy Cox.

Names mentioned on the Republican side, include former Congressman Bob Barr and State Insurance Commissioner John Oxindine. Plus, no fewer than four GOP Congressmen: Jack Kingston, Charlie Norwood, Matt Collins and John Isaacson.

Duty calls. Coming up, the story of a man who's going from mayor to the Marines.

Plus, this man's a U.S. citizen. So why is he behind bars without access to a lawyer? The controversy just ahead.

But first it looks like your stocks made some money today.

Rhonda Schaffler joins us now live from Wall Street with all the numbers -- Rhonda.


The market paused a moment after U.N. weapons inspectors said they weren't satisfied by Iraq's weapons documents. It didn't last long, though, the rally quickly resumed and pushed the Dow forward sharply, up 180 points. The Nasdaq up 2.5 percent. Network equipment maker, Foundry Networks, one of the biggest gainers, its shares up 15.5 percent, it actually issued a positive earnings outlook -- Judy.

WOODRUFF: Rhonda, we understand there is some political in- fighting going on when it comes to Wall Street's wrongdoers. Who are the combatants here?

SCHAFFLER: Right. The Justice Departments wants to put more white collar criminals in stripes. If filed a new directive calling for increased penalties and mandatory jail time for white collar crimes, things like fraud, insider trading, embezzlement. The U.S. Sentencing Commission voted yesterday to recommend most of those changes but justices aren't satisfied. It says the commissions recommendations aren't tough enough. The Justice Department says it is following President Bush's call to restore investor confidence by severely punishing corporate criminals.

WOODRUFF: That is the very latest from Wall Street.

More INSIDE POLITICS ahead, including a new effort under way to change the name of a Senate office building.

It's time to check your "I.P." I.Q. Who once held Bill Frist seat for U.S. senator from Tennessee? Was it A., Andrew Jackson, B., Andrew Johnson, or C., both. Stay with INSIDE POLITICS to tell you the answer a little later in the show.


WOODRUFF: The threat of war with Iraq is more personal for some political figures, than for others.


BRAD JEWITT, FORMER MAYOR, BERWYN HEIGHTS, MD: You drop everything else because your country's called and you assume -- put the uniform on and perform the duty that they tell you to.


WOODRUFF: After just eight months on the job, Brad Jewitt resigned his position as mayor of Berwyn Heights, Maryland last night. His Marine Corps Reserve unit has been called up for active duty here in the U.S. He saw action in Operation Desert Storm in 1991.

Question: should U.S. be allowed to jail indefinitely U.S. citizens captured overseas as enemy combatants? Well, U.S. court of appeals says, yes. And yesterday's ruling has human rights advocates up in arms. The case centers on Yasser Hamdi a Louisiana native born to Saudi parents who was captured 14 months ago in Afghanistan. Now Hamdi is currently held in a Navy brig without a lawyer or any other constitutional rights.

With us now, former Gore Campaign Manager Donna Brazill and Bay Buchanan, President of American Cause.

Donna, what about this notion someone who is a U.S.-born -- born in the United States, being accused of what this man, Mr. Hamdi is accused of but can't get a lawyer, a hearing or any of these things?

DONNA BRAZILE, FMR. GORE CAMPAIGN MGR.: Well, it's just like our war on terrorism. Writing laws and writing plans up plans as time goes by. Look, we have now one ruling for one set of American citizens who are caught as enemy in combat and another set of rules -- no rules for so-called enemy combatants here in the United States. So I think it was a very narrow ruling, and hopefully the Supreme Court will strike it down, or Congress will look at the overriding law and clarify it.

BAY BUCHANAN, PRES. AMERICAN CAUSE: Donna, I think you need a couple years in law school here. It's quite clear where the law is on this, and has been. We used this same law in World War II, and many times since. We you're an enemy combatant, in war, allowed to be detained if captured indefinitely until that war is over. This individual has not been accused of a crime, he is accused of being an enemy combatant and will be detained indefinitely as the judges suggested it. Just following procedures in the time of war.

BRAZILE: Well, if you recall in World War II by detaining Japanese-American citizens, we had to later apologize. This is a war on terror, no beginning, no end and we should have clearly defined rules. Look, this individual should be given a lawyer, a glass of water, and taken to court and in jail permanently without ever seeing the light of day again. On the other hand, we shouldn't throw away our constitution just to satisfy...

BUCHANAN: There's no...

BRAZILE: ... executive branch of government. (CROSSTALK)

BUCHANAN: It is totally within the constitution, without question, and in the best interests of the American people we protect them from the enemy and that's what the administration is doing wisely.

WOODRUFF: Changing the subject quickly. The president has decided to the surprise of many people, including we learned today Trent Lott, to renominate, right now, Charles Pickering, among other people who didn't make past the Senate. He wants Mr. Pickering to serve on a federal appeals court.

Let me let you both listen to what Elijah Cummings, a Congressman newly elected head of the Congressional Black Caucus had to say about this.


REP. ELIJAH CUMMINGS, CHMN. CONG. BLACK CAUCUS: Again, our concern is not limited to Judge Pickering. Many of the other persons nominated by the president appear to have demonstrated the same kind of insensitivity. The continuing de facto segregation and inequality in America cannot be whitewashed by the president's words.


WOODRUFF: Has the president opened up an issue here, Donna that people thought was at least going to be put away for the time being after the Trent Lott controversy?

BRAZILE: Yes. Well, Judy, just a month ago the Republicans said they're the party of Lincoln. Now, they've returned and made a rapid u-turn, being the party of Lott. I think this sends a bad message to the country at a time the president said he wants to unite everyone. Once again he is dividing us, by putting forth these controversial right-wing judges, who would turn us back -- turning back the clock on civil rights and civil liberties. And there's no reason why we need to refight these battles.

BUCHANAN: You know, Donna, you better hope the lord's not listening. You and I both know the lightning would strike if you were. What you're saying is inaccurate. You know it. This judge, Pickering, and the other judges, the problems you have with them, is that they are conservatives. Nothing to do and no indication or evidence they are any way interested in turning civil rights laws back.

They are conservatives and in this country, when you win the White House, you expect opponents are not going to be happy with judge appointments. I was delighted to read the headlines, Democrats upset with judicial appointees. That's the way it should be. We won. You guys lost. Our judges are going through, and that makes me one happy lady.

BRAZILE: Well, Bay, you didn't have a mandate to turn back the clock on civil rights. And look, if the Republican party wants to go forward and turn back the clock and show it's insensitive and will continue to support these right-wing judges, then go for it. And I guarantee you, next election, Democrats will take decontrol of the Senate and maybe the House of Representatives and the White House.

BUCHANAN: Donna, you played, overplayed your hand last year. You overplayed your hand on these judges last year. Look what happened on election day. The American people are us on this. These judges are good, solid judges. You are using the race card because you don't like where they stand on many issues. It is nothing to do with civil rights (UNINTELLIGIBLE)

BRAZILE: When it comes to the race card, the Republican party plays the whole. And by the way, the deck is now stacked against Republicans on this issue. This is going forward on racial issues.

WOODRUFF: We got to leave it here, Donna, Bay, thank you both. See you next week.

Another example today of racial politics in play here in Washington. A new push is under way to change the name of the Richard Russell Senate Office Building, and remove the statue of the late Georgia Democrat. The group change the name says that Russell was a self-proclaimed and unrepented white supremist. Who delayed every civil rights measure consider by the Senate during his tenure. Social activist and group organizer, Dick Gregory, is urging the Senate to pass a resolution to change the buildings in February, which is Black History Month.

Well, the highest-ranking woman ever to serve in the House majority joins me next. I'll interview GOP Conference Chairwoman Deborah Pryce about the president's agenda and her role in shaping the Republican message.


WOODRUFF: When it comes to President Bush's plan to pump up the economy, is bolder better? Jeff Greenfield joins us in a moment with some answers.


WOODRUFF: Well, as the president and Republicans begin to sell their priorities to the American people, Ohio Congresswoman Deborah Pryce is among those in charge of communicating the GOP message. She was recently elected chairman of the House Republican Conference. That's the No. 4 spot in the House GOP leadership.

Deborah Pryce is with me now from the White House, where you have just been part of a going-away party, I gather for the president' congressional liaison, Nick Calio.

REP. DEBORAH PRYCE (D), OHIO: That's right.

WOODRUFF: But let me ask you first about the president's economic plan. I interviewed John Breaux today. We have talked to Democrats. We have talked to Republicans. Almost nobody, at least in the Senate, says they think the president can get this plan through the Senate. What's your take on it?

PRYCE: Well, the president is a smart guy.

And this is a very bold plan. And he's very courageous when he introduces this stuff. In my mind, it's the right plan for the country. It has the right mix of exactly what his economic advisers and many economic folks across the country believe will do the right thing to spur this economy, to get it growing.

Whether he gets every last bit of it, we'll see. But he doesn't negotiate with himself. He might as well start with what he wants and then see how it goes.

WOODRUFF: So, do you agree with your colleague, Tom DeLay, the new House majority leader, who says, this isn't a ceiling, this is just a floor, this $675 billion? In other words, he is predicting the tax cut could go even larger.

PRYCE: Well, it could. But with the Senate that we have in place, who knows? We have to start and see where it takes us.

But it's the right mix of exactly the kind of tax cuts that will spur small business and consumerism and get this country moving again. And, you know, that rising tide will rise. All the boats will come up with it.

WOODRUFF: Well, I hear what you're saying, Deborah Pryce, but the reporting was, when House Republicans met yesterday, it was reported that the tax proposal never came up. And there was an aide who was part of that meeting who said, you just don't see the enthusiasm this time that we saw back in 2001 for the previous tax cut.

Are Republicans going to get together behind this?

PRYCE: I think they will. That's the -- the Republican message is, we are taxed too much. We are still taxed too much.

And this is a perfect opportunity, with a Republican House and a Republican Senate, to do what we can to relieve the tax burden on American people. It's a basis philosophy. Who better should spend America's money, the people who earn it or the government? We as Republicans believe that the people who earn it should have more of it to spend.

WOODRUFF: You are, as we said, the highest-ranking woman in the House leadership. Of course, Nancy Pelosi is the leader for the Democrats in the House. Is the fact that we've now got two women in these top positions in the House of Representatives going to have a material affect on what happens in that body?

PRYCE: Well, I think that our government should be reflective of our country. And I think that it's only right and good and progressive that we have women in high leadership posts. And I'm very honored that my party selected me.

And I can't speak for the Democrats, but I think the Republicans are better served when we have a full complement of folks representing us. And I am going to do my best to make sure that the views and the feelings of all Americans on the Republican side of the aisle are represented.

WOODRUFF: All right, Representative Deborah Pryce, she's the newly elected conference chair for the Republicans in the House. Thanks very much.

PRYCE: Thanks, Judy.

WOODRUFF: Good to see you. Hope to see you again soon.

Well, whatever else critics might say about the president's economic stimulus plan, Mr. Bush cannot be accused of thinking small.

Our Jeff Greenfield is with me now from New York for more on the political realities behind the White House proposal.

Jeff, what are they?

JEFF GREENFIELD, CNN SR. ANALYST: Well, Judy, one guaranteed result of the Bush tax plan is that it will give dueling economists a huge amount of face time over the coming weeks to debate their conflicting views. Will the plan bolster the economy? Does a bigger deficit mean higher long-term interest rates? Will the most affluent of Americans spend more or save more?

But however muddled this economic picture, the political portrait that this plan paints is very clear. Embodied in the president's plan, in my view, are some fundamental political maxims. First: protect and reward the base. The core of the Republican conservative thinking today, as it has been ever since the days of Ronald Reagan, is that tax cuts are good under just about any and all circumstances, deficits or surpluses, high inflation or no inflation, stagnation or growth.

If Bush the son learned anything from Bush the father, it is that it is vital not to neglect your base. And these days, a proposals for big tax cuts is the best way to encourage that conservative base, way more than social programs.

Second: Size does matter. Bold is better. The second core lesson that Bush the son learned from Bush the father is that perceived passivity in the face of economic trouble can the fatal. So, whatever the merits of the plan, the political advantage of being bold is clear. And when the Bush plan proved to be bigger than forecast, the political benefit was clear.

We saw more than a dozen newspapers and just about every broadcast and cable analysis proclaim this plan bold. Now, critics, of course, will point out that, if the idea is bad in the first place, bold may not be such a good thing.

Maxim three: The rich are no longer targets of opportunity, as we heard from Bill Schneider, perhaps surprisingly, given the stories of recent corporate misdeeds by plutocrats. The administration and the president himself are really not saying, no, the well-off don't benefit. They're saying, well, yes, they benefit. They're the one whose pay the most taxes.

Moreover, at least some Democrats seem to be in a time warp if they believe a couple making $80,000 to $100,000 are rich. Well-off? Yes. But that kind of couple is likely a middle-management woman and her assistant principal husband. This lesson was first apparent more than 30 years ago, when presidential candidate George McGovern proposed a huge tax on inherited great wealth and was roundly denounced by New Hampshire factory workers, who believed they might not be rich, but their kids might some day be rich.

Maxim four: The era of big government may really be over. There was a time when Democrats would argue that, in lieu of tax cuts, the money could be used for bold government programs. And, in fact, in the past, presidents from both parties celebrated such programs, Hoover Dam and the electrification of America, Eisenhower's interstate highway system, the G.I. Bill of Rights, the space program, Head Start, Medicare.

Now you hear that from only a very few voices, Marian Wright Edelman of the Children's Defense Fund, for instance, saying, well, the money could pay for a massive nationwide child health program. But who is saying, well, we could build a national high-speed rail network for the 21st Century; we could put every kid through college, or whatever?

Except for spending in the defense and national security and terrorism arena, it appears that the appetite for any kind of big public effort is gone. Now, it is by no means clear, as we've been hearing, how much of this program will survive the legislative process. But as a political matter, the president seems to be starting out with the wind at his back -- Judy.

WOODRUFF: All right, Jeff Greenfield, thanks very much.


WOODRUFF: Appreciate it.

When we return: On the heels of his decision not to run again, Senator Zell Miller may be giving his fellow Democrats fits for another reason. Bob Novak will have the "Inside Buzz."


WOODRUFF: Well, Bob Novak joins me now here in Washington with his notebook.

And among other things you're watching on the Hill, one of those really important inside stories, and that is which party gets more money to run the committees in the Senate. Where does that stand?


But, traditionally, when one party has more -- at least a two- seat advantage, as the Republicans now will have, it goes to two- thirds, one-third on the funding. Now, the problem is that Senator Orrin Hatch of Utah, the top Republican on the Judiciary Committee, who marches to his own drummer, cut a deal with Democratic his counterpart, Pat Leahy, of Vermont, for a 50/50 deal.

So, the Democrats on the other committees said, we want a 50/50 deal now. This is all being negotiated now. Very difficult. They hope to get it done by the end of the week. If they don't, they can't get the Senate going and it's a bad omen for cooperation in the future.

WOODRUFF: All right, moving quickly along, you've been looking into how many Democratic votes there are for the Bush plan. I interviewed John Breaux today. He said he's not voting for it as-is. But what are you learning?

NOVAK: Senator Feinstein was quoted in "The New York Times" today saying there would be no Democratic votes for it. I know one Democratic vote: Senator Zell Miller of Georgia. He has not yet announced it. But I will predict he will be for it.

He didn't like the last-minute decision of the president not giving money to the state -- Senator Miller is the former governor of Georgia -- but he will be voting for it.

WOODRUFF: Next, Tom Daschle is not going to run for president, but there is some fallout from that.

NOVAK: People in the aviation industry have told me from the start that there was no chance that Daschle would run, because they didn't want a microscope put on his wife, Linda, who is a lobbyist for United Air Lines, only in the House of Representatives, not in the Senate. Nothing wrong, nothing illegal, but a little bit embarrassing.

The other fallout is that Harry Reid, the Democratic whip, who would have succeeded to majority -- to Democratic leader if Daschle had run for president, is devastated by this. He expected, he wanted to be leader. And also, it would have helped him in a -- there's a very tough race for reelection in Nevada coming up next year.

WOODRUFF: And, finally, your prediction last week about where the Republicans were going to hold their convention?

NOVAK: I was wrong.

I said that the favorite was New Orleans. But, Judy, I can only tell what Republicans tell me. And that was the big buzz in Washington. It was going to be New Orleans. I can tell you this, that at the last -- I did say that it hadn't been finally decided. And, at the last minute, Mayor Bloomberg of New York came in with a very fat financial package. This was a dollar-and-cents thing. He also came in with a secret plan for mediation of labor disputes, which has really been worrying the Republicans as to how they were going to handle the Big Apple, which is full of labor unions and Democrats.

WOODRUFF: Well, all of us like New Orleans, but you are not going to have a bad time in New York either.

NOVAK: New York is nice. New York is great.

WOODRUFF: OK, Bob Novak, thanks very much. We'll see you time.

Well, we join two newcomers to the Capitol next. We tag along with two House freshmen this week on their first day as members of Congress.



WOODRUFF (voice-over): Earlier we asked: Who once held Bill Frist's seat as U.S. senator from Tennessee? Was it A, Andrew Jackson, B, Andrew Johnson, or, C, both? The correct answer is C. Andrew Jackson held the seat in the 1790s and Andrew Johnson held it in the 1800s.


WOODRUFF: The doctor is officially in on Capitol Hill. A new sign outside the Senate majority leader's office reads: William H. Frist, M.D. Senator Frist added the M.D. to his Senate office sign in 1995 at the suggestion of his late father, who was also a doctor.

Well, Senator Hillary Rodham Clinton was talking sports this week. She once made waves touting her support for the Yankees. Well, this week, she was asked to consult on the bungled NFL call that helped doom the New York Giants in the playoffs.

"Roll Call" reports that Senate Clinton digressed into a discussion of how the Giants play in New Jersey. And she offered this crack -- quote -- "Well, I've always considered New Jersey a suburb of New York." Well, New Jersey Senator Frank Lautenberg took the joke in stride and was quick with a comeback. "Roll Call" quotes him as saying he has always considered New York a suburb of New Jersey.

In the House, Republicans delivered a powerful message about party loyalty and the fallout for breaking ranks. Republican Congressman Christopher Shays of Connecticut bucked the GOP leadership by being a champion for campaign finance reform. Well, now Shays has gotten his political payback.

You learned yesterday that he did not get the chairmanship of the House Government Reform Committee. Instead, the job went to a less senior member, Congressman Tom Davis of Virginia. Shays' chief of staff says the coming knew the defeat was coming and he is taking it in stride.

Well, there is nothing quite like your first day on the job, especially when your new job title is member of Congress. We tagged along for some of the excitement this week with the two freshmen class presidents: Republican Max Burns of Georgia and Democratic Frank Ballance of North Carolina.



I have token three oaths today. I believe the third one in front of my constituents, mainly to have all of my friends who could not be in the chamber, was probably the highlight.

Representing the 1st District of North Carolina.


BALLANCE: So help me God.

UNIDENTIFIED MALE: Congratulations.

BALLANCE: Thank you.

And I'm going to represent you in the United States Congress. And you're going to be proud of the action we take, because we represent the people.

Whose fine office is this? All right.

I think symbols are important. And casting that first vote on the floor of the House was symbolic. And now I have the opportunity to be here. I hope I can inspire someone.


CROWD: Glory!

BALLANCE: Hallelujah.

CROWD: Hallelujah!


CROWD: Glory!

BALLANCE: Hallelujah.

CROWD: Hallelujah!

REP. MAX BURNS (R), GEORGIA: They say that this is a large office. And I'm really impressed with the special view of the flag. I got access to the flagpole, which is great.

I appreciate you all coming this morning. Boy, I'll tell you, what a great day.

Thank you.

BURNS: I was asked this morning what am I going to remember about today. And I said, well, just the thrill of being on the floor and being sworn in for the first time. What a memory. And, again, that's a memory that I will enjoy and I'll have a chance now to share with you, because of you.

This gets us from the office complexes over to the Capitol. We'll come out in the Capitol.

I'm not a politician. And I don't have a political resume. And I think that's probably pretty good. I think, if you look around Congress, there are a number of folks who are a little different, a little bit like me, who really are more typical perhaps of the population, a little more normal, a little more common.

UNIDENTIFIED MALE: I'm proud to be with you.



WOODRUFF: If you dare to look on or inside someone's desk, you can often tell a lot about them and where they come from.

That is especially true in the Senate chamber, as our Bruce Morton explains.


BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Every U.S. senator has a desk. They bought the original 48 in 1819 when the Capitol reopened after the British burned it in the War of 1812. And they cost $34 apiece. They're all still in use. And they've added more, same design, more or less, over the years, as more states joined the Union.

Each desk -- no cameras allowed on the Senate floor, so few pictures -- each desk has a history. Daniel Webster's desk. He was a senator from Massachusetts, but his home state was New Hampshire. And New Hampshire men have carved their names after his: Styles Bridges, Norris Cotton. Under a Senate resolution, the desk automatically goes now to the state's senior senator, Judd Gregg now, since Bob Smith lost his seat last year.

Henry Clay, not his carving, but it is his desk. And it goes, under a resolution sponsored by Mitch McConnell, to the senior senator from Kentucky, who is, surprise, surprise, Mitch McConnell. Thad Cochran, the senior senator from Mississippi, has Jefferson Davis' old desk. A Union soldier tried to bayonet it during the Civil War, but they made him stop.

Lots of history. The desks in this scene, the 1868 impeachment of Andrew Johnson, were there over a century later for the impeachment of Bill Clinton, much refinished, of course. They shift place a little. If you're the presiding officer, the Democrats are on your right, Republicans on your left, depending, of course, on how many seats each party has.

Fathers and sons, Evan Bayh of Indiana and Chris Dodd of Connecticut, have their father's desks. Oh, and there's a candy desk. George Murphy of California started that for those who wanted a snack. John McCain had it when he was a freshman. This year, Rick Santorum of Pennsylvania has it. And the candy, of course, is from Hershey.

Lots of history in this room, one way or another.

Bruce Morton, CNN, Washington.


WOODRUFF: We didn't know about the candy desk. We'll have to check that out.

That's it for INSIDE POLITICS. I'm Judy Woodruff.


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