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JUDY WOODRUFF'S INSIDE POLITICS

Virtual Democratic Primary; Medicare Reform Debate Heats Up

Aired June 24, 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: America's first virtual primary is under way.

UNIDENTIFIED FEMALE: I am clicking on this circle for Howard Dean.

ANNOUNCER: Which Democrat will win the unofficial online presidential contest? And will it be fair and square?

The Bush campaign money marathon reaches a fever pinch. We'll update the pledges and the politics.

With Independence Day fast approaching, some Republicans are in revolt. We'll talk to a leading figure behind the fireworks.

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington: JUDY WOODRUFF's INSIDE POLITICS.

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

Well, if you thought the presidential primaries didn't begin until 2004, think again. The first Democratic contest actually began today on the Internet. The MoveOn.org primary is not an official part of the selection process.

But our Bill Schneider says it could be influential, with the balloting open to more than a million liberal activists.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It's the meeting of two worlds: political junkies and Web heads. MoveOn.org was started in 1998 by Silicon Valley activists infuriated by the effort to impeach and remove President Bill Clinton. Move on, they say.

JOAN WALSH, SALON.COM: And they really were some the first people to try to figure out how to marshal the anger on the Web.

SCHNEIDER: The organization did move on to raise money for candidates who opposed impeachment, to protest the war in Iraq, to object to big media mergers, and now to defeat President Bush. MoveOn.org members got their ballots Tuesday, by e-mail, of course.

Here is MoveOn member Christine Kresho (ph) voting from her own computer, no lines, no punch cards, no chads.

UNIDENTIFIED FEMALE: And I am clicking on this circle for Howard Dean.

SCHNEIDER: The MoveOn Web site has links for all the candidates. Just click on, say, Howard Dean and you get a letter from Governor Dean, plus answers to questions posed by MoveOn members to each candidate. Voting in the primary is only the beginning. The voters can authorize MoveOn to give their e-mail address to their candidate, donate money, volunteer for the campaign.

ZACK EXLEY, MOVEON.ORG: We hope that what the MoveOn endorsement means is that we will be able to mobilize hundreds of thousands of volunteers from now until the general election and mobilize hundreds of thousands of donors.

SCHNEIDER: And maybe millions of dollars raised instantly on the Web. Political operatives see MoveOn as the wave of the future.

SIMON ROSENBERG, PRESIDENT, NEW DEMOCRAT NETWORK: They are really at the cutting edge, at the beginning of a new model for how citizens participate in the political process.

SCHNEIDER: Other campaigns are saying the MoveOn.com primary favors the champion of liberal causes, Howard Dean, who is also running the Webbiest campaign.

Following the so-called straw poll of members, MoveOn.org gave three preferred candidates special access to the voters: Dennis Kucinich, John Kerry and Howard Dean. This MoveOn staffer recently did work for the Dean campaign. So why are the other candidates even bothering to campaign? To keep Dean from getting the 50 percent he needs to win the MoveOn endorsement.

ROSENBERG: A lot of the presidential candidates are taking this seriously, because they want to prevent Howard Dean from running away with this thing.

(END VIDEOTAPE)

SCHNEIDER: Suppose nobody wins 50 percent of the vote when the virtual primary ends midnight tomorrow. MoveOn organizers say they may keep voting month after month until someone does. Well, then the Democratic National Committee could step in and say, stop, this is hurting the party. Time to move on -- Judy.

WOODRUFF: So, Bill, what is the stop Republicans or just Democrats who want to create mischief, who maybe just want to stop Howard Dean from getting in there and voting, getting -- in other words, skewing the results of this?

SCHNEIDER: MoveOn.Org organizers say nab can vote in their primary. All they have to do is join the organization. So if, say, organized labor wants to flood the voting polls, well, registration is closed today. But for the last few days, they could sign up their membership and they all could vote. There are no restrictions by party or anything else.

WOODRUFF: OK, Bill Schneider, we'll be looking at the results. Thanks very much.

SCHNEIDER: Sure.

WOODRUFF: And a little bit more on that later in the show.

But now we turn to the Bush fund-raising machine. It moves West later this week, when the president hosts two big money events in California. But on the opposite coast last night, Mr. Bush claimed quite a haul.

(BEGIN VIDEOTAPE)

AUDIENCE: Four more years! Four more years!

WOODRUFF (voice-over): George W. Bush swept into a Democratic city and set a personal fund-raising record. He banked just over $4 million, a sizable chunk of the $20 million his campaign is hoping to raise over two weeks. And he did it in New York, site of next year's Republican National Convention.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I am going to come back.

WOODRUFF: A few states away, Dick Cheney made his reelection fund-raising debut.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: This is an impressive turnout for the No. 2 man on the ticket.

SCHNEIDER: The vice president pulled in $1.7 million at twin events in Virginia and Boston. Both men sounded a familiar theme.

CHENEY: This war on terror will continue.

BUSH: Terrorists declared war on the United States of America and war is what they got.

WOODRUFF: That message didn't sit well with the hundreds of protesters who gathered outside the Sheraton in Manhattan.

CROWD: No more Bush! No more Bush!

WOODRUFF: But New York Republicans weren't deterred. They're vowing that Bush will take the state in 2004.

(END VIDEOTAPE)

WOODRUFF: Back here in Washington, there are reports that senators are nearing agreement on a final obstacle to the Medicare prescription drug bill. But over in the House, some conservatives apparently are up in arms.

Let's go to our congressional correspondent Jonathan Karl.

Jon, how upset are they?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, quite upset, Judy.

This thing, this bill, seems to be sailing towards almost certain passage in the Senate. But things are far less certain over in the House. There are a group of about two to three dozen conservative Republicans in the House threatening to vote no on the bill. They don't like the bill. They want to see it changed or perhaps outright defeated.

One of those conservatives is Republican Jeff Flake from Arizona.

(BEGIN VIDEO CLIP)

REP. JEFF FLAKE (R), ARIZONA: This is the biggest new entitlement since the launch of the Great Society. And the notion that Republicans are doing it is really obscene. This is going to balloon in cost, just like Medicare itself has over the past 30 years, beyond all estimates. The estimates are bad enough here, but we know that it will go beyond estimates. So it shouldn't be us doing this. We ought to be fighting it.

(END VIDEO CLIP)

KARL: And Congressman John Shadegg, who is an influential member of the 90-member conservative Republican Study Group, said that it is indefensible for Republicans to talk about adding such a big new benefit to Medicare without first restraining the program's costs. He made the case in an op-ed piece in "The Arizona Republic" yesterday that's gotten a lot of attention up here today.

In the piece, Shadegg wrote -- quote -- "Sadly, Congress is putting politics ahead of policy. In its rush to pass something, anything, it is on the verge of imposing a staggering financial burden on our children and on our grandchildren." Now, Republican leaders in the House are trying to appease the conservatives. Tomorrow morning, both Speaker of the House Dennis Hastert and Majority Leader Tom DeLay will meet before the entire Republican caucus and make the case for Republican unity on an issue that they believe will be possibly a central one to next year's campaign.

But, Judy, although this may not -- this conservative -- growing conservative revolt over in the House is probably not enough to derail the bill, it could seriously complicate efforts to pass it, because here's the situation. Those conservatives do not like the bill that has been proposed by the Republican leadership over in the House, but they absolutely despise the bill that's passing over here in the Senate, a bill that is also supported by Democrat Ted Kennedy.

So, after these two bills pass, the two sides will have to get together, reconcile their differences. And, at that point, conservatives in the House may well make their stand. So, Judy, stay tuned. This is not over yet.

WOODRUFF: Still much to be determined. Interesting, two Arizona Republicans weighing in. It would be interesting to know what the retirement community in Arizona has to say about all this.

KARL: Excellent point.

WOODRUFF: All right, Jon Karl reporting for us from the Capitol.

Well, the Senate Rules Committee voted today to limit filibusters of President Bush's judicial nominees. All 10 Republicans on the panel voted for the measure aimed at robbing Democrats of a weapon to block Bush nominees. All nine Democrats were no-shows at that meeting. As Senator Charles Schumer tell it, Democrats knew how the vote would go in committee, so they're going to save their fight for the Senate floor if and when the measure comes up for a vote there.

Still ahead: a Senate conservative who's been known to stir up controversy. I'll talk to Republican Rick Santorum about his role in that prescription drug debate for seniors.

Also ahead: Howard Dean's slip of the tongue and more on his prospects in today's virtual primary.

Up next: the campaign to drive out California Governor Gray Davis. By the numbers, does the recall effort have what it takes?

(COMMERCIAL BREAK)

WOODRUFF: Leaders of the effort to recall California Governor Gray Davis have collected under half of the 897,000 signatures needed to force a referendum. According to the secretary of state's office, 376,000 signatures had been turned in as of June 16. Recall supporters say they hope to reach the required total by mid-July, in time for a special election this fall.

Coming up: a campaign event but one problem, no candidate. We'll explain.

INSIDE POLITICS returns in 60 seconds.

(COMMERCIAL BREAK)

WOODRUFF: As we reported earlier, Congress is continuing its debate today over the addition of a prescription drug benefit to Medicare. Big differences remain between Republicans, who want to subsidize some private insurance plans, and Democrats, who want to see parity between private plans and the benefits offered by the government.

A little while ago, I spoke with Republican Senator Rick Santorum. And I started by asking him if the whole Medicare reform effort could unravel over this kind of disagreement.

(BEGIN VIDEOTAPE) SEN. RICK SANTORUM (R), PENNSYLVANIA: There are two major things that the president wanted to accomplish in the Medicare bill. No. 1 was to add a prescription drug component. There's $400 billion -- actually, $389 billion in the plan to do that.

The other thing the president wanted to do was to set up a system by which we could actually get improvements and strengthen Medicare overall by marrying the public sector things that are good, which is a stable source of funding, and the things from the private sector that are good. And that is competition to improve efficiency and quality for beneficiaries.

We only spend about $7 billion in this bill on improving the quality of Medicare overall. And what we're saying is, actually, we should probably spend -- if we're spending $380 or $390 billion on the drug benefit, we might want to spend a few dollars on trying to do some things to improve the Medicare system over the long haul. And I think we're getting close to a compromise that I think will accomplish just that.

WOODRUFF: Well, in conjunction with that, the president essentially agreed to the Senate plan without it having an important provision, at least a provision important to him. And that is giving an incentive to beneficiaries to switch to private plans. So my question to you is, did the president give in a little too soon on this?

SANTORUM: Well, the president said from the very start that he wants to have some things in the basic Medicare bill to create incentives for people to move into this competitive model, because we believe that, over the long term, seniors will be much better off with quality. But, also, it will be better for the taxpayers. It will be a more efficiently run system.

The traditional Medicare system today, which is a fee-for-service system, exists only one place in the world. And that's in the Medicare system. It doesn't survive in the wild, if you will. The fee-for-service plans have been eliminated in the private sector because they're very costly and they're not high quality. And so the president is trying to create some incentives for people to sort of walk away from that traditional benefit and go to a system that we believe, once people try it, they will like it a lot more.

I am going to be offering an amendment to try to do that, to try to get the president's idea in place. I'm not too sure we're going to be successful, but we hope to be successful in conference.

WOODRUFF: But -- so, essentially, you're saying Senate Republicans gave up on this too soon, that they cut a deal too soon with Senator Kennedy?

SANTORUM: Well, we -- well, Senator Grassley and Senator Baucus worked together in the Finance Committee to try to build a bill that would come out of committee in a bipartisan way.

And this was one of the issues that, frankly, there were some Republicans, as well as all the Democrats, maybe with one or two exceptions, who did not want to see any difference between the drug benefit between the old Medicare system and the Medicare advantage system, which is being designed here today. I think that's wrong. I think there are lots of reasons why seniors would be better off in this new system, because of the increase in the quality of the care, as well as the efficiency for the taxpayers.

WOODRUFF: So you're saying...

SANTORUM: And actually more benefits. There are actually going to be more benefits offered in the new program.

WOODRUFF: So you're saying change this deal that came out of committee.

SANTORUM: Well, obviously, this is the Senate working its will. We're going to try on the floor. I'm not too sure we're going to be successful.

But the House has their ideas. The president has his ideas. And that all will be worked out in conference. And I'm hopeful that we will have some things in the bill when it comes out of conference to create some incentives for people to go into the more efficient, better long-term plan for Medicare.

(END VIDEOTAPE)

WOODRUFF: Pennsylvania Senator Rick Santorum.

Well, Howard Dean promotes his campaign for president in a media outlet where few candidates tread -- the scoop from the campaign trail when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: Checking in on the Democratic hopefuls in our "Campaign News Daily": Congressman Dick Gephardt has picked up a new endorsement from organized labor. The 100,000-member International Brotherhood of Boilermakers, Ship Builders, Blacksmiths, Forgers and Helpers is the fifth union to declare its support for Gephardt.

Howard Dean has taken his White House campaign to a nontraditional media outlet. The latest issue of "The Advocate," the national news magazine for gays and lesbians, features a full-page ad for Dean. The ad describes Dean as -- quote -- "a leader who respects our rights and shares our commitment to equality."

An event meant to showcase Al Sharpton's support among New York and New Jersey Democrats yesterday appeared to fall flat. Five of nine elected officials expected at the event failed to attend. Sharpton wasn't there either. His campaign manager says that Sharpton was in Chicago for a debate on Sunday and never planned to be on hand for the event anyway.

Well, as we reported earlier, an unofficial presidential Democratic primary is under way today on the Internet. Ron Brownstein of "The Los Angeles Times" is here with us now with his take on this contest.

Ron, it's MoveOn.org. And I understand you have already got a sense of how the voting is going.

RON BROWNSTEIN, CNN POLITICAL ANALYST: According to the MoveOn people -- excuse me, Judy -- very heavy turnout in this first online primary. They said people were voting at the rate of 20,000 an hour this morning, so much so that the system temporarily crashed for about an hour because the vote so exceeded their expectation of what they thought people would participate.

WOODRUFF: And we know this is an organization, Ron, that has catered in its short life to liberal Democrats.

BROWNSTEIN: Yes.

WOODRUFF: What's the significance really?

(CROSSTALK)

BROWNSTEIN: It's important to understand what this is and what it is isn't. As Bill pointed out in his piece, this is a group whose membership has been recruited primarily around two liberal causes: opposing impeachment and opposing the war in Iraq.

So it's not a cross-section of Democratic opinion. It is more like a caucus in Madison or Berkeley. But what it can be is an important asset if someone can get to that 50 percent, presumably Howard Dean having the best chance. This list, this MoveOn list, has proven itself to be very active and engaged. They have been able to raise a lot of money off this list, $3 million in 2000, $4 million in 2002, generate a lot of activity, letters and volunteers.

And if they can unify behind a candidate, it can be a valuable source of money and support, not only now, but, more importantly, perhaps, later in the primary process, when turning around money quickly off the Internet could be very important in this condensed calender.

WOODRUFF: And, as Bill pointed out earlier, if they don't get 50 percent right now, they are going to keep doing this until they get to 50 percent.

BROWNSTEIN: They can have more votes. They can have more votes.

WOODRUFF: You and I were just talking about the fact that they have sort of tilted, they have weighted the results already in the favor of three candidates. Why do that?

BROWNSTEIN: Yes. I think even many of their supporters believe it was a mistake.

What they did was, they held a straw poll in May. They had the top three finishers being Howard Dean, Dennis Kucinich and John Kerry. They didn't even announce what order. But they said they had allowed those three alone to communicate directly with the 1.4 million members by sending them an e-mail. And you already have other campaigns, like the Gephardt and the Edwards campaign, not surprisingly, two of the strongest supporters of the war in Iraq, saying that that taints and undermines the results.

It does, I think, raise a question about the fairness of the process that they didn't need. And there are those who say, if they don't get the 50 percent, they were hoping they would not do this again, if they have subsequent elections.

WOODRUFF: Setting that particular problem aside, Ron, does this say anything at all about the usefulness or the value going forward of the Internet as a tool for campaigns?

BROWNSTEIN: Yes, potentially. I think we're seeing this grow each election. McCain in 2000 had a certain amount of progress on the Internet. The candidates are using it more.

And what MoveOn has done is show the potential of the Internet to solve one of the principal problems for political organizations: the cost and expense of going out and finding people who agree with you, either through direct mail or advertising. The Internet reverses the process, Judy. The supporters find you. So it is virtually cost- free. And what you can do is, you can go back and mine that list again and again.

And if in fact they can translate that into money for Howard Dean or anybody else now and later, I have got to think you're going to see other groups emulate this attempt in the 2008 presidential election.

WOODRUFF: OK, Ron Brownstein, with a touch of laryngitis, go take care of your voice.

BROWNSTEIN: Yes. All right. I apologize.

WOODRUFF: Get those lozenges.

BROWNSTEIN: Yes.

WOODRUFF: Thank you for being with us.

BROWNSTEIN: Thank you.

WOODRUFF: Well, an environmental group today issued a failing grade for the first half of President Bush's term in office. League of Conservation Voters President Deb Callahan blasted White House policies on the environment, based on the group's judgment of the president's policies, appointments, and legislative initiatives.

(BEGIN VIDEO CLIP)

DEB CALLAHAN, PRESIDENT, LEAGUE OF CONSERVATION VOTERS: This Bush administration has done nothing less than allow corporate polluters to rewrite our nation's environmental laws. The consequences are dire. In only two years, the Bush administration has rolled back the laws and regulations that protect our air, our land, our water that have been in place for 30 years. Never before have we seen such a broad-based assault on our environmental protections.

(END VIDEO CLIP)

WOODRUFF: Deb Callahan of the League of Conservation Voters.

Just yesterday, outgoing EPA Director Christie Whitman released a report calling the nation's air, water and land better protected than they were 30 years ago.

Coming up: a check of the markets.

And what was Howard Dean thinking? Even he admits that's a good question -- the story just ahead.

(COMMERCIAL BREAK)

(FINANCIAL UPDATE)

(COMMERCIAL BREAK)

WOODRUFF: Democratic presidential candidate Howard Dean may be thinking about sticking closer to his campaign script. Asked yesterday about his criticism of Washington Democrats, Dean said -- quote -- "It is a bit of a club down there. The Democratic Party, all the candidates from Washington, they all know each other. They all move in the same circles. And what I'm doing is breaking into the country club" -- end quote.

Well, Dean said later that he regretted the country club reference, since his 17-year-old son was cited last week in a connection with an alleged attempt to steal beer from a country club. Dean said -- quote -- "That was an incredibly unfortunate phrase." And then he turned to an aide and asked, "Why do I say these things?"

Good question.

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

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