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GOP Tax Cut Compromise Clear Congress; Ray of Hope in Middle East Peace Process

Aired May 23, 2003 - 16:00   ET


SEN. BILL FRIST (R-TN), MAJORITY LEADER: This is a major stoking of those boilers in that ship of the economy.

ANNOUNCER: It's full steam ahead to the president's desk. The GOP tax cut compromise narrowly clears Congress, despite some Democrats' efforts to sink it.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: I believe that our colleagues did the tax equivalent of a triple backflip off the high dive, and they belly-flopped.




ANNOUNCER: 2004 Democrats vie to be the man with the plan. Why are they bothering when voters still aren't paying much attention?

What was he thinking? A congressman-turned-Senate candidate denounces rumors about his sexual preference, putting the story in the national spotlight.



JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

The Senate tiebreaker in chief had his work cut out for him again. Skipping a graduation speech in Arizona -- or, sorry, in Louisiana, so that he could be on the Hill, Vice President Cheney's vote closed the deal on the GOP's tax cut compromise. President Bush is expected to sign the bill into law next week.

And, as our Jonathan Karl reports, Mr. Bush has Mr. Cheney to thank for more reasons than one.


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

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Not only did he cast the tiebreaking vote, Vice President Cheney also saved congressional Republicans from themselves. As the president's enforcer, he twice broke up fights among Republicans that threatened to kill the tax cut.

SEN. CHARLES GRASSLEY (R), IOWA: He's kind of like a pastor coming in and settling a family dispute within the congregation.

KARL (on camera): And that's what he did?

GRASSLEY: The Republicans are a unified congregation because of Vice President Cheney.

KARL (voice-over): But Republicans are not completely unified. Senator Olympia Snowe denounced what she called gimmicks to make the tax cut look smaller than it really is, saying, "This is a trillion- dollar tax cut masquerading as $350 billion."

And Speaker of the House Dennis Hastert agrees the tax cut could be much bigger. "It could end up being a trillion-dollar bill," he said, "because this stuff is extendible," the stuff, temporary tax cuts Republicans are already saying they would like to make permanent.

(on camera): So you expect these tax cuts to be renewed?

GRASSLEY: I do expect them to be renewed, in fact, even within the next year or so.

KARL (voice-over): If the tax cuts are renewed, the total cost skyrockets and, Democrats charge, already bad budget problems get worse. Whatever the ultimate cost, Democrats say it will directly increase the national debt.


KARL: Now, within hours of that vote on the tax cut, the Senate also voted to allow the government to add nearly $1 trillion more to the national debt, a reminder that, even as they cut taxes today, Congress is looking forward to record budget deficits in the coming years.

WOODRUFF: You mean, even as they giveth, they taketh away.

KARL: That's exactly it.

WOODRUFF: OK, Jon Karl, thanks very much.

Well, this is the third tax cut plan that President Bush has pushed through Congress. But our now poll out this hour suggests that Americans will be receiving the latest cut with mixed emotions. In the CNN/"TIME" magazine survey, 45 percent say they favor the Bush tax cut plan, while 39 percent say they oppose it.

And while half of those surveyed believe the plan will stimulate the economy, 57 percent say it will benefit the rich over the middle class. And this caught our eyes: 72 percent of those polled say they would rather see improvements in health care than tax cuts, a figure that may be of interest to 2004 Democrats who are pushing health care reform plans.

Well, it is early in the race to '04, but you already need a scorecard to keep up with the Democrats' bevy of plans.

Our senior political correspondent, Candy Crowley, has been reading between the lines and asking, why?


CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): Polls show most people can't name a Democrat running for president.

LIEBERMAN: Intend to put forward a practical and affordable plan.

CROWLEY: So it's not a leap to believe:

REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: The plan I'll be outlining today...

CROWLEY: ... that most people haven't the foggiest idea...

KERRY: Today, I am announcing a plan that will reduce the cost...

CROWLEY: ... what all these plans are about.

DEAN: I've challenged my opponents to also have a plan.

CROWLEY: Who are these people talking to?

NORM ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: Opinion leaders, people who watch the news, who are announcing the news, who make the early assessments and then have an impact on those who give the money are watching.

CROWLEY: Call it the elite primary. "It sounds silly," said one '04 campaign strategist, "but our universe is a 35-inch story on our health care plan, a favorable mention by a columnist, getting the buzz going." What campaigns want to avoid is a fall column that they've got a presidential-looking candidate with a great story and no ideas.


WALTER MONDALE (D), PRESIDENTIAL CANDIDATE: When I hear your new idea, I'm reminded of that ad, "Where's the beef?"


CROWLEY: The elite primary was the wind beneath the late Paul Tsongas, who wrote a book of plans into the newspaper columns and a New Hampshire victory. (BEGIN VIDEO CLIP)

PAUL TSONGAS (D), PRESIDENTIAL CANDIDATE: Put together a call to economic arms. Here it is in great detail. And I'm willing to be judged on that.


CROWLEY: Political plans are an art form. A candidate needs the sweet spot, enough big ideas so you look serious, not so many you look like a wonk or get lost in the paperwork.

One former Gore strategist thinks his old boss became the candidate of plaid, a guy with so many plans, people weren't sure what he was about. And a big plan can become a big target in its small parts. Al Gore used Bill Bradley's health care plan as a bludgeon to knock him out.

ORNSTEIN: Just coming up with some plan that shows that you have thought about an issue or that you have a bold approach can easily be dissected by your opponents. And there's a peril here in showing detail.


CROWLEY: And, finally, even the best-laid plans of mice and candidates can peak too early. Lay everything out now and you fight for attention next year, when you say it all over again -- Judy.

WOODRUFF: Oh, Candy, it's tough running for president, isn't it?


WOODRUFF: OK, Candy Crowley, thanks very much.

Still ahead: a progress report on the road map to Middle East peace. I'll ask former Mideast envoy and former Senator George Mitchell about Israel's new agreement and the possibility of big breakthroughs.

President Bush knows a thing or two about the Texas Rangers, but now he has some other Rangers going to bat for him.

And officials here in Washington may be celebrating tax cuts, but that won't buy them the "Political Play of the Week."


WOODRUFF: Former President Clinton, in case you're thinking about him today, is back in Arkansas this afternoon lecturing to a university class on his presidency. Earlier, Mr. Clinton watched as the top beam to his future presidential library was put in place. About 2,500 people were on hand for the ceremony.

INSIDE POLITICS returns after a quick break.


WOODRUFF: President Bush said today that he sees progress in Israeli Prime Minister Sharon's decision to accept the terms of the U.S.-backed road map for Middle East peace. Mr. Bush also said he would even consider meetings with the Israeli and Palestinian leaders.

With me now to talk more about the Mideast peace process is former U.S. Senator and Middle East envoy George Mitchell.

Senator Mitchell, this agreement today from Prime Minister Sharon, is this real, something real that we can count on, or is this just more words in a long-running tragedy over there?

GEORGE MITCHELL, FORMER U.S. SENATOR: It's a significant step. There will be many more to come, but I think it is important. And I commend the president, the prime minister.

And the action now will shift to real effort by the new Palestinian prime minister and his team to make a 100 percent effort to crack down on terrorist activity and for the Israelis to take the steps that are called for in the road map that the prime minister has now accepted.

WOODRUFF: You said the attention will shift to the Palestinians, but do the Israelis need to take a few more concrete steps at this point?

MITCHELL: Yes. I said both.

The road map calls for a series of reciprocal steps that will occur in a series of what they call phases or transitions. I think it's a significant thing to get it going. I commend the administration. It's been tough to do because of differences of opinion about it. The Israelis, as we all know, had several reservations about it, still do. But you have to get this process going. And I think it is now under way, in terms of concrete steps to be taken.

But no one should delude themselves. As I'm sure all those involved know, this is a very long road. There will be many setbacks along the way. But what is most important is that it's been started, that there is an intense effort, and that there's a great deal of patience and perseverance going forward.

WOODRUFF: Analysts are saying that they see a new commitment on the part of President Bush to be fully engaged, or more fully engaged, I should say, in this process. How much difference is that making? And do you agree that there's a new commitment there?

MITCHELL: Clearly, there is. The president spoke by telephone earlier with both the prime ministers. Now there's discussion, as you've just reported, on a meeting with them, as part of the president's trip outside the country in the coming days.

I think it's obvious there's an intense effort under way. The real test, of course, will be perseverance with it. And it is critical. This cannot be done without American leadership. The mutual mistrust between the parties themselves is total. They won't take any action based upon trust, because there is no trust. And there is no entity other than the United States government that can fill the necessary role of bringing them together.

And for that to happen, it requires direct presidential involvement. Presidents may not like that, but it's a reality. And I commend the president for taking these steps. And I hope he will stick with it all the way. And, remember, there are going to be a lot of setbacks. But each "no" must be regarded as one more step on the way to "yes." And I think that's going to happen.

WOODRUFF: Spoken like an optimist, if a cautious one.

Senator Mitchell, you were referring to this. It wasn't so long ago, though, that President Bush was critical of President Clinton, or the Clinton administration, for being too involved in the Middle East. What do you think turned him around.

MITCHELL: I think, obviously, the continuing loss of life and devastation that has accompanied the last 2 1/2 years of the so-called intifada two, which show no signs of abating and which has created a situation in which life is unbearable for Israelis and Palestinians both, for different reasons, but nonetheless real.

It simply can't continue in this way of never-ending conflict. There is a growing despair, a growing resort to and condoning of violence, and a sense of the inevitability of the conflict that has to be turned around. And I think the administration has recognized that it can't be turned around other than by direct American involvement and direct presidential involvement.

In addition, I think, Judy, it's fair to say that the administration is heartened by the success in Iraq and what they perceive to be the new leverage that gives both the administration and the president in dealing with this problem.

WOODRUFF: Former Senator George Mitchell, former Middle East envoy, it's very good to see you. And we thank you for coming by.

MITCHELL: Judy, thanks for having me.


Well, the primaries -- back to American politics -- are still eight months away, but it's never too early to see which Democrats are on top and which are not, the latest poll numbers in the race for the White House just 90 seconds away.


WOODRUFF: Checking the headlines now in our "Campaign News Daily": First, there were Pioneers. Now there are Rangers. The Bush-Cheney team will call on a select group of prolific donors called the Rangers to raise $200,000 each in the 2004 campaign. The Pioneers will also return. They were the volunteer fund-raisers who brought in just $100,000 each back in 2000.

Democrat Howard Dean continues to make inroads as the most Internet-active Democratic hopeful. The Dean campaign says that it has raised $1 million through its Internet Web site, making him the front-runner for contributions raised online.

Another early snapshot of the Democratic contest finds a tight race for the title of front-runner. In the new CNN/"TIME" magazine poll of registered Democrats, John Kerry has a one-point edge over Joe Lieberman and Dick Gephardt. Al Sharpton is in fourth place, one point ahead of John Edwards, followed by Senator Bob Graham. Howard Dean, Carol Moseley Braun and Dennis Kucinich all got less than 5 percent.

Up next: Congressman Mark Foley addresses rumors about his personal life.

INSIDE POLITICS returns in a moment.


WOODRUFF: Chuck Todd is with me now to talk about news and insight on the political scene. He's, of course, the editor of "The Hotline."

Good to see you again.


WOODRUFF: Your lead story today on Florida Republican Congressman Mark Foley coming out to talk about his personal life. What happened there?

TODD: Well, it was interesting.

They got word Mark Foley is running for the U.S. Senate. It's a possible open seat, depending on what Bob Graham does with his presidential campaign. But they got wind that "The Fort Lauderdale Sun-Sentinel," a very large paper in congressional district, which is part of Palm Beach County -- got wind that they might be doing a story about speculation on his personal life.

Some of the alternative media in South Florida, specifically, "Broward New Times" and then, up here, "The Washington Blade," a newspaper for gay folks here, started speculating about whether Mark Foley is gay or not. The major media was going to do a story, or so he thought. So, instead, he holds a conference call with every major reporter in the state of Florida.

So this morning, the story is about him upset about the rumor- mongering. Now, he did another thing that was interesting. He released a bunch of supportive statements from people by Tom DeLay, Roy Blunt, two of the top three people in the House, saying how much they appreciate working for Mark Foley and that this stuff is not good politics.

WOODRUFF: It will be very interesting to see how that affects his...

TODD: Whatever happens in his campaign, it will be that decision that affects it, either good or bad.

WOODRUFF: Two other very interesting things, first of all, though, the so-called Democracy Corps memo -- this is the James Carville, Stan Greenberg, Bob Shrum group -- memo, advice to Democrats. What are they saying?

TODD: It's talking points, more or less. And they're talking about -- they do this poll, but then they use it, saying, what do Democrats need to be talking about? And they really focus in not just on the domestic issues that are obvious, like the economy and education, saying that Democrats can do well on those issues, but on security issues.

And they're saying -- they make the argument that Democrats almost need to come out stronger, sounding stronger than Bush when it comes to domestic security and terrorism in order to close that gap, that there's no chance the Democrats are going to have if they at all are seeming like they're not pro-security at all. There was...

WOODRUFF: And yet Bob Shrum is advising...

TODD: Well, what's interesting, Bob Shrum is advising John Kerry. Kerry has sort of been seen as sort of middle ground when it comes to the war on terrorism, specifically with Iraq.

There was a statement in the memo that talked about that nobody who didn't support the ousting of Saddam Hussein -- no Democrat -- is going to do well against President Bush. So it was sort of odd to see Shrum's name with it. It seemed more like a profile of a memo that was very helpful almost more so to Joe Lieberman's stance and how pro- Iraq and pro-war on terrorism.

WOODRUFF: It's a memo definitely worth reading.

We wanted to talk to you about some vacancies in the administration. We'll save that until the next time we see you.

TODD: Fair enough. OK.

WOODRUFF: Chuck Todd with "The Hotline," great to have you with us. Thanks very much.

TODD: Thanks.

WOODRUFF: Coming up: The president tees up for Annika Sorenstam. And who got more votes, Ruben and Clay or the 2000 presidential candidates?


WOODRUFF: Pro golfer Annika Sorenstam continues to prove herself against the men as she plays in the Colonial tournament in Fort Worth. It towns out America's No. 1 Texan is a fan. (BEGIN VIDEO CLIP)

BUSH: I'm impressed by Annika Sorenstam. And I hope she makes the cut. I'm pulling for her. And I hope I'll be watching her on Saturday and Sunday.


WOODRUFF: I want to know how they say "I'm pulling for her" in Japanese. We'll find out.

INSIDE POLITICS will be right back.


WOODRUFF: Bill Schneider is with me now for a look at a recent vote on the West Coast that flies in the face of conventional wisdom here in Washington.

Hi, Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Judy, here in Washington, the White House is celebrating a tax cut. But at the other end of the country, many voters are celebrating a tax hike. A tax hike? Can that be true? Yes. And it can also be the "Political Play of the Week."


SCHNEIDER (voice-over): In January, Oregon voters turned down a statewide tax increase. Public schools in Oregon are funded mostly by the state. That left the schools in desperate shape.

UNIDENTIFIED FEMALE: We've lost reading teachers, music teachers, media teachers, honors programs.

SCHNEIDER: Portland teachers agreed to work for 10 days without pay. But Portland area schools still faced cuts of up to 17 more school days. The plight of Oregon schools made the "Doonesbury" comic strip, showing students not too unhappy at the prospect of 17 fewer school days.

But parents had a little different reaction.

UNIDENTIFIED MALE: You have to educate your kids. You can't have a bunch of dumb kids running around.

SCHNEIDER: On Tuesday, voters of Multnomah County, Oregon, which includes Portland, defied the state and voted to impose a county income tax.

UNIDENTIFIED FEMALE: We need to take the matters in our own hands, because Salem has refused to act. And today, we did it!

SCHNEIDER: Fifty-five percent of registered voters turned out and 58 percent of them voted for the tax hike, many to make a statement.

UNIDENTIFIED MALE: Everybody else's taxes are to low and mine is always too high. Everyone else makes too much money, except for me, and my wages are never high enough. It's like, that kind of thinking, I find it un-American.

SCHNEIDER: The county chair was exultant.

DIANE LINN, MULTNOMAH COUNTY CHAIRWOMAN: We can avoid the prospect of immediate massive teacher layoffs.

SCHNEIDER: Happy activists marched to the governor's office carrying "Doonesbury" signs. And the kids, believe it or not, they were grateful.

JOHNELL BELL, BENSON HIGH SCHOOL STUDENT: Just because the state won't support you, we will still support you -- it means a lot when we have adults say that to us.

SCHNEIDER: It means enough to win the "Political Play of the Week."


SCHNEIDER: The federal government's cutting taxes, but many states around the country are having to raise taxes. The feds giveth and the states taketh away. And there's nothing new under the sun -- Judy.

WOODRUFF: But we'll keep on looking.

OK, Bill Schneider, "Play of the Week." Thank you.

Question: Did any politicians catch "American Idol" fever, like the rest of the nation? You bet. Ruben and Clay's home state congressmen, Alabama's Spencer Bachus, and North Carolina's David Price placed a friendly wager, barbecue vs. ice cream. Well, since Ruben won, Bachus has a shipment of North Carolina ice cream coming his way.

And while we're on "Idol"-mania and politics, the 2000 presidential primary candidates can take some comfort in knowing that, in the major primary contests, through March, they pulled in 31 million votes. Fortunately for the American political process, that is more than the whopping 24 million cast for Ruben and Clay.

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


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