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JUDY WOODRUFF'S INSIDE POLITICS

Fleischer Steps Down; Can Bush Bring House, Senate Republicans Together on Tax Cuts?; Democrats Criticize Bush on Homeland Security

Aired May 19, 2003 - 16:00   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: Just as President Bush launches his campaign for four more years, his number one spokesman announces he wants out.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I love my job. I believe deeply in President Bush, the man and his policies, but it is my time to go.

ANNOUNCER: House and Senate Republicans who have been butting heads head to the White House. Can President Bush bring them together on tax cuts?

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: We're not safer today.

REP. DICK GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: Because this administration has not done its job.

SEN. BOB GRAHAM (D-FL), PRESIDENTIAL CANDIDATE: We have let al Qaeda off the hook.

AL SHARPTON (D), PRESIDENTIAL CANDIDATE: Where is bin Laden?

ANNOUNCER: Democrats vying to take on the president manage to speak in one voice on national security. But how soon will they go back to attacking one another?

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us. When an administration official steps down, the first question usually asked here in Washington is, was he forced out? Well, by all accounts, White House press secretary Ari Fleischer voluntarily decided to leave this summer after 21 years in government and politics. As our John King reports, the president's most visible spokesman will ride off into the sunset before the Bush reelection campaign really heats up.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): He envisions August by the ocean in Nantucket, not land-locked at the steamy Bush ranch in Crawford, Texas.

FLEISCHER: I'm very much looking forward to relaxing.

KING: It will be 30 months as White House press secretary when Ari Fleischer steps down in July. No shortage of big days.

FLEISCHER: September 11, one war, anthrax attacks, another war.

KING: There were playful snowball fights with reporters, and for the most part good relations. But Fleischer's tenure has not been without controversy. He once blamed Middle East violence on the Clinton administration, saying the former president had overreached, in Fleischer's words tried to, quote, "shoot the moon" with last minute peace negotiations.

Last fall he answered a question about the cost of war in Iraq by suggesting someone assassinate Saddam Hussein.

FLEISCHER: The cost of one bullet, if the Iraqi people take it on themselves, is substantially less than that.

KING: And Fleischer said this just last week in the wake of the Riyadh terrorist bombings.

FLEISCHER: We continue to be pleased with the cooperation we've had from Saudi Arabia in the ongoing war against terrorism.

KING: Yet the credibility of that statement came into question hours later when it was learned Deputy National Security Adviser Stephen Hadley made a secret trip to Saudi Arabia just before the bombing to appeal for more Saudi help. He was a New Yorker in a world dominated by Texans, but Mr. Bush came to like him, to the point of once protecting him from the elements.

(END VIDEOTAPE)

KING: Fleischer says he told the president of his plans to leave last Friday. He says he realized at this point, he needed to decide whether to leave this summer or commit to staying through the Bush reelection campaign. After 21 years, most of it in government and politics, Ari Fleischer says he wants to relax a little bit, hit the speaking circuit, spend more time with his wife of just six months and make some private sector money.

And Judy, no word just yet on who will be the next press secretary, but all the betting here among senior administration officials is that Ari Fleischer's top deputy, Scott McClellan, who goes back with President Bush to his days in Texas as Governor Bush, will be the next press secretary.

WOODRUFF: Another face for us all to get very, very accustomed to. All right, John, thanks very much.

And we hope to have Ari Fleischer as a guest here tomorrow on INSIDE POLITICS.

About an hour from now, DNC officials say they plan to meet here in Washington to talk about a sensitive subject: Democratic presidential debates. Candidates' representatives will be there too. Senator Joe Lieberman has proposed that he and his eight rivals debate once a month until a Democratic nominee is chosen. But we're told that party officials hope to limit the number of formal debates over the next few months. One official says it is unlikely that any final decisions will be worked today.

Well, the debate about debates comes as Democrats are feeling pretty good about a candidate forum in Iowa over the weekend. By and large, the White House hopefuls zeroed in on President Bush and national security, rather than lashing out at one another as they did during a recent South Carolina debate.

(BEGIN VIDEO CLIP)

SHARPTON: I want to see George Bush defeated, not just because he's a Republican, but because he's wrong. He's wrong about tax cuts. He's wrong about having wars that are unjustified.

DEAN: Everybody's glad to see Saddam gone, but the truth is, it is a diversion. We're not safer today than we were before Saddam Hussein left.

GEPHARDT: We are vulnerable to future attacks, because this administration has not done its job and has not increased our ability to have homeland security.

GRAHAM: We have let al Qaeda off the hook.

(END VIDEO CLIP)

WOODRUFF: Well, the Democrats spoke before members of the labor union AFSCME, and then the members weighed in on which candidate they liked the best. Their favorites, Dennis Kucinich and Al Sharpton, two liberal candidates whose prospects of winning are not considered very high. They were followed by Congressman Dick Gephardt and Senator John Edwards.

Well, political analyst Ron Brownstein of the "Los Angeles Times" was out in Iowa for the weekend. He's back here in Washington now and joins me live.

Ron, you were there at the debate. As we pointed out, unlike the South Carolina debate, this time the Democrats were united in going after the president. What changed?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I think very clearly, the Democrats got a surprising amount of flack from others in the party, a number of party voices who accused them of criticizing each other too much and not focusing enough on President Bush in that first South Carolina debate. And you saw the results here. They really did not lay a glove on each other, did not even repeat the challenges to each other's agendas that came up in South Carolina and instead really focused their attention on President Bush, on the economy, on judicial appointments, on health care. And perhaps most surprisingly, with a very concerted critique on homeland security, as your soundbite suggested there. WOODRUFF: Now, Ron, what is it that gives them what they believe is, I guess, the safe room to go after the president on national security or homeland security?

BROWNSTEIN: Judy, I actually think it's as much a question of necessity as opportunity here. I think they've very clearly internalized a lesson from 2002 that if you don't challenge the president on national security, foreign policy and homeland security, you're simply ceding too much ground to make up on other issues like health care and prescription drugs. And what Democrats have tried to do is lay down a predicate through a series of votes in Congress. The argument that President Bush, because of his support for these significant tax cuts, is not providing enough money for homeland security.

And you know, watching this debate on this forum on Saturday, it occurred to me that maybe for the first time, that going to New York City for the Republican convention in 2004 may not be a total slam dunk for the Republicans. There was an EMT technician, emergency medical technician from New York City who got up, an AFSCME member, and basically asked the candidates what they were going to do to overcome the lack of funding that he said President Bush -- or the funding failures that President Bush has implemented.

So it's possible you could see these kinds of critiques from firemen, policemen, EMTs, all of whom are union members and have many reasons to be critical of the Bush administration.

WOODRUFF: Ron, I mentioned what the union reaction was, how they voted, liking Kucinich and Sharpton better than the others. But what is the state of play right now in terms of getting an endorsement from these unions?

BROWNSTEIN: You think that was what Jerry McEntee (ph), the president of AFSCME, was hoping for in the results of his members? Look, what you've got now is an interesting stalemate developing inside the AFL-CIO. It takes support from two-thirds -- unions representing two-thirds of the members to get an endorsement from the giant labor federation. Right now we're in a situation where the industrial and building trade unions, who tend to be more protectionist on trade, have enough votes to block any of the Democrats probably, except Dick Gephardt, from getting to that two- thirds. Gephardt can't get there himself, though, without the support of some of these sector unions, particularly AFSCME and to some extent -- to an equal extent, the Service Employees International Union.

Gephardt needs them. The others need AFSCME to block Gephardt. Right now, I would say for AFSCME and Jerry McEntee (ph), the top tier is John Kerry, Dick Gephardt and Joe Lieberman. And clearly I think he leans toward Kerry. Kerry didn't appear with the others, but when he appeared in the afternoon by satellite, he also did very well. And I bet after that focus group, Jerry McEntee (ph) was breathing a sigh of relief over that.

WOODRUFF: And we know it's not just the endorsement, it's the organized work that these labor unions put into the campaign that really matters.

BROWNSTEIN: Very quickly, Judy, in 1992, the industrial unions mostly liked Tom Harken, but AFSCME went with Bill Clinton, and that helped him get the nomination. So it is a very important factor in this race.

WOODRUFF: OK, Ron Brownstein, thank you very much.

BROWNSTEIN: Thank you.

WOODRUFF: Well, President Bush is bringing House and Senate Republicans together this evening in hopes of narrowing their differences over tax cuts. And that may not be easy, since $200 billion and some hard feelings stand between them. Here's our congressional correspondent Jonathan Karl.

(BEGIN VIDEOTAPE)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The vice president votes in the affirmative.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Senate Republicans may have kept the tax cut alive last week, but bitterness between House and Senate GOP leaders is complicating efforts to get the bill to the president's desk.

House leaders are still fuming over a secret deal Senator Finance Chairman Chuck Grassley made five weeks ago with moderate Republicans to keep the size of the tax cut at $350 billion. And they think the Senate's tax cut is small and ineffective. Using an expletive, a senior House Republican aide called it "a piece of 'blank' bill," and said some House conservatives would prefer no tax cut to the one passed by the Senate.

House Republicans don't like the roughly $90 billion in offsets or tax increases. The temporary dividend cut, which lasts only four years, and the $20 billion in state aid included in the Senate bill.

House Republicans also object to special interest tax cuts the Senate passed in the dead of night by a voice vote, including allowing business travelers to deduct their spouse's travel expenses, a measure pushed by Nevada's Harry Reed, a tax break for domestic liquor distillers pushed by Kentucky's Jim Bunning and a tax cut on sight- seeing helicopter flights pushed by Hawaii's Daniel Inouye.

The personal involvement of the president may be needed to break the impasse.

SEN. SAM BROWNBACK (R), KANSAS: The president has been the key initiator, the pusher, and I think will be the one that will ultimately press the deal together to get a House and Senate agreement that cuts taxes, that stimulates the economy.

(END VIDEOTAPE)

KARL: Republicans have said repeatedly that they hope to get the tax cut to the president's desk by Memorial Day. But now, Republicans on both sides of the Capitol think that's an all but impossible goal. As a matter of fact, the conference committee that will need to work out the differences between the Senate and the House bills has not even been formed yet, because House leaders have not named their members of that conference committee. They say they may not even get around to it this week.

So Judy, it certainly looks like this will be a much longer process than Republicans had hoped for.

WOODRUFF: That's one of the things the Republican Party really doesn't like, and that's any kind of division among their members. OK. Jon Karl, thanks very much.

Well, now, an update on the legal battle over campaign finance reform. A federal court today temporarily stayed its own ruling striking down the law until the Supreme Court settles the matter. That means the McCain-Feingold law passed by Congress last year will stay in effect and candidates are expected to operate by its rules in the 2004 campaign. The law includes a ban on soft money and restrictions on political ads. The high court is likely to hear the case in September or October. But the lower courts stay could be appealed.

Still ahead, more on Ari Fleischer's decision to step down and the changing role over the years of White House press secretaries.

Plus, the campaign letter is in the mail. We'll tell you who's keeping postal carriers busy.

And later, Vice President Dick Cheney on commencements and second chances.

(COMMERCIAL BREAK)

WOODRUFF: Coming up next, our debate over your tax cut continues. I'll speak with Senator Max Baucus.

Plus, he spent 8 million of his own dollars to run for governor. So why did a candidate in Kentucky drop out of the race just days before the primary election? The answer ahead in our "Campaign News Daily."

(COMMERCIAL BREAK)

WOODRUFF: As the House and the Senate prepare to reconcile their two different versions of the president's tax cut proposal, I'm joined from Capitol Hill by Senator Max Baucus of Montana. He is the ranking Democrat on the Senate Finance Committee.

Senator Baucus, what do you think the president is going to be doing with these Republicans from the House and the Senate over at the White House later today? What's going on? Is he going to knock some heads?

SEN. MAX BAUCUS (D), MONTANA: I think it's pretty clear that's exactly what he's going to be doing, Judy. He wants this passed and passed very quickly and he's going to tell them that.

WOODRUFF: This has been characterized, whatever comes out, Senator, as an enormous political victory for the president. Do you think it's going to be that no matter what number you end up with?

BAUCUS: I think that it will be received as a victory because there will be a tax cut, whether it's 350 or 550 or somewhere between, really doesn't matter in the minds of, I think, most Americans. The White House will portray it as a win. It will be perceived as a win.

But on the other hand, I think it's not going to be good for the economy after all.

WOODRUFF: So, is this -- are Democrats just irrelevant in this process now?

BAUCUS: Well, I hope we're relevant. Sometimes I ask myself that same question.

No, we're -- I think we're able to point out some huge defects in this bill which I think will temper some of the provisions that might come out of conference. Namely, the dividends exclusion proposal. This yo-yo tax policy is on again, off again, here you see the dividends, now you don't see the dividend. It's going to create great uncertainty and I think therefore it's not going to really stimulate the economy. And I think people are going to see that fairly quickly.

WOODRUFF: Wait a minute. You're saying it's not going to stimulate the economy.

BAUCUS: No.

WOODRUFF: That's the whole premise of the White House argument here, that it is going to stimulate the economy.

BAUCUS: That's right. That's the premise, but I think it's just -- it's a mere stimulus, if one at all.

WOODRUFF: You know, people sitting out there listening to this, Senator, they say, Well, wait a minute. The White House says one thing. The president says it's going to create jobs. You and other Democrats say it's not. How do people know what to believe in a situation like this?

BAUCUS: I think they have to look at the facts. This is a bit complicated. I think people have to dig deep, look at both sides, and ask a lot of pretty tough questions to see what the actual effect of this provision is.

I'm trying to be fair in saying that the other side tends to use a lot of rhetoric, just as tax cut equals jobs. But if you look more closely, if you dot the I's and cross the T's, look at the fine print, I think people will see that -- it takes work, people will see that it's actually not what it purports to be.

WOODRUFF: Are you saying literally you don't see any stimulus, any jobs created out of the bill?

BAUCUS: I see some, but not near the jobs that is claimed by the White House. And then there's a big down side too, and that's the burgeoning deficits. The deficits already are protected to be over $300 billion. That's an all-time record. My guess is it's going to be even more than that. And this provision, particularly the dividend provision, is going to make that even worse.

WOODRUFF: Senator, is the goal of Democrats just to get this tax cut as small as possible, or is it to get the shape of the tax cut, what's in the tax cut?

BAUCUS: I think it's -- many of us, in fact, some on both sides of the aisle, believe that 350, the provision that the Senate passed is big enough. After all, the chairman of the Finance Committee, Chairman Chuck Grassley, as well as a couple of prominent Republicans have said 350 is it. And I think that's...

WOODRUFF: But the House is at 550.

BAUCUS: That's a -- and therein lies the reason for the delays and getting this conference off to a start and get it passed.

WOODRUFF: Well, Senator Max Baucus, who is the ranking Democrat on the Senate Finance Committee, where all the action is. Thank you very much.

BAUCUS: Thank you.

WOODRUFF: And are you going to be on the conference committee?

BAUCUS: Oh, I am on the committee. The question is for how many days will I be on the committee. No, all Democrats are on the -- who are appointed will be on the conference, but my guess is there's going to be some side meetings that maybe some of us might not be part of.

WOODRUFF: OK. All right. Senator Baucus, good to see you. Thanks very much.

BAUCUS: Thank you.

WOODRUFF: Well, there are more signs that the wheels are turning on the Bush campaign machinery, just ahead.

Plus, the difficult job of speaking for the president. Our Bruce Morton on the job of White House press secretary.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines in our "Campaign News Daily," just days after President Bush quietly filed the paperwork to run for re-election, the GOP is soliciting money from party donors. The first Bush-Cheney fundraising letter for 2004 will arrive in GOP mailboxes soon. Meanwhile, the campaign Web site, georgewbush.com, is up and running, but it remains in its early stages. Democrat Howard Dean has a dire prediction for the nation's economy if the Bush/Cheney team wins four more years. Speaking to an Iowa audience yesterday, Dean said -- quote -- "if we reelect this president, we'll be in a depression."

In Kentucky, Democrat Bruce Lunsford has dropped out of tomorrow's Democratic primary for governor after spending $8 million of his own money. Lunsford left after a new campaign ad was released by his opponent, Attorney General Ben Chandler. The ad features a woman who says her mother was abused at a home run by Lunsford's company.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Bruce Lunsford did not care that my mother was abused. He could have cared less. She was just a dollar figure to Bruce Lunsford.

(END VIDEO CLIP)

WOODRUFF: The two men had traded negative attacks throughout the campaign, but Lunsford called that last ad -- quote -- "desperate." Chandler is now the favorite in the primary.

INSIDE POLITICS returns in a moment.

(COMMERCIAL BREAK)

WOODRUFF: Ari Fleischer's decision to leave the White House will bring an end to a very eventful tenure as the president's press secretary. He will be with me tomorrow on INSIDE POLITICS to talk about his service to the president.

Our Bruce Morton has more on the growing pressures on those who serve as the president's official spokesperson.

(BEGIN VIDEOTAPE)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I think you're fishing off a dock that doesn't exist.

BRUCE MORTON, CNN CORRESPONDENT: Ari Fleischer often accused the White House reporters of casting their lines beyond his message. Now he'll be fishing himself in the waters of private enterprise. The press secretary's job has changed enormously over the years. Dwight Eisenhower first filmed press conferences, John Kennedy the first live ones. And now, Ann Compton has covered six presidents.

ANN COMPTON, ABC WHITE HOUSE CORRESPONDENT: The press secretary's job has become this incredible tug-of-war between a 24 hour-a-day news cycle, particularly with cable television, and a White House staff that's really been very stingy about how much they want the president out, how much they want to explain their positions.

MORTON: Fleischer, of course, was caught in the middle. He didn't go to all the meetings, wasn't the kind of total insider Bill Moyers was when he was Lyndon Johnson's pressman, but he wasn't stuck outside like the late Ron Ziegler in Richard Nixon's White House either. He made a few mistakes, seeming to blame the Mideast violence on Bill Clinton's policies.

FLEISCHER: But the point is that for decades, American presidents have wrestled with how to bring peace to the Middle East. President Clinton tried valiantly to do so. Nobody should be surprised if President Bush has a different approach.

MORTON: But mostly, he's been careful, and doesn't stray from the message of the day.

BOB DEANS, COX WHITE HOUSE CORRESPONDENT: Ari has very carefully, very deliberately and with great precision told the president's story day in and day out. And if you are frustrated by the message, you're frustrated by the messenger, but that's what Ari has been.

MORTON: He frustrated reporters sometimes, but was probably a good press secretary for a president who liked secrecy and who sees the press as unfriendly. Fleischer will be freer now. He eventually plans to go home to New York, where he can root for his Yankees, using any message he wants.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Again, we'll be talking to Ari Fleischer tomorrow here on INSIDE POLITICS.

So do Americans believe what they hear from White House press secretaries? That's the question in the CROSSFIRE coming up at half past the hour.

Coming up here, it is that time of year when students graduate and politicians find a platform to offer advice. We'll tell you how the vice president managed to get a few laughs.

(COMMERCIAL BREAK)

WOODRUFF: Vice President Dick Cheney knows a thing or two about unexpected opportunities. He was supposed to help George W. Bush choose a running mate. Instead, he became the running mate. In a commencement speech at the University of Missouri yesterday, Cheney waxed about open doors and second chances.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Though I received my undergraduate degree from the University of Wyoming, my undergraduate experience, though, began at a place called Yale, but I didn't finish. I dropped out after a few semesters. Well, actually, "dropped out" isn't quite accurate. "Asked to leave" would be more like it.

(LAUGHTER)

CHENEY: Twice. The second time around, they said, "Don't come back."

WOODRUFF: Which gives a lot of hope to all those struggling students. If you are not doing so well, you too can go on to do great things.

That is it for INSIDE POLITICS. I am Judy Woodruff. Thanks for joining us. "CROSSFIRE" starts right now.

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



Republicans Together on Tax Cuts?; Democrats Criticize Bush on Homeland Security>


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