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JUDY WOODRUFF'S INSIDE POLITICS

Schwarzenegger Still Undecided on Run for Governor; Gillespie Becomes New head of RNC

Aired July 25, 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: Turn down the lights. The movie's about to start.

ARNOLD SCHWARZENEGGER, ACTOR: I'll drive.

ANNOUNCER: But will he? We'll tell you whether the Terminator's likely to enter the California chaos.

ED GILLESPIE, RNC CHAIRMAN: This is a critical time in the history of our party.

ANNOUNCER: The GOP's new chieftain takes the wheel. RNC Chairman Ed Gilliespie joins us on his first day on the job.

A late-night squeaker in Congress where House Republicans put their stamp on Head Start. Want to know which top-shelf Democrats skipped the vote? Stay tuned.

Now from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

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

Just a few hours ago, California's supreme court refused to stop the recall election for Democratic Governor Gray Davis. The court declined to intervene in a case challenging the validity of signatures on the recall petitions. Davis supporters still have another chance. On August the 8th, a lower court hears arguments alleging wide-spread fraud in obtaining the signatures.

The election is set for October 7, and everybody's guessing who will be the Republicans' star candidate. As Candy Crowley reports, it may not be who you think.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): No, he hasn't said yet. He's still working his day job.

SCHWARZENEGGER: I think it's very important that you send a message, which means (UNINTELLIGIBLE) knows "Terminator 3." So that's all we want to talk about. I have no announcements to make, if that's your question. CROWLEY: Well, yes, that is the question, everybody's question.

GOV. GRAY DAVIS (D), CALIFORNIA: The Terminator may be back, he may not be back, we'll see about that.

CROWLEY: As delicious as the prospect is, political oddsmakers are betting Arnold Schwarzenegger will turn down the role of Gray Davis slayer. The recall vote is guerrilla theater, anything can happen, and nobody knows what it will mean.

The theory is if Schwarzenegger is serious about changing careers, his political debut is less likely to be panned in a more conventional election. Say (ph) one everybody expects where motives are less likely to be suspect. Besides, Schwarzenegger is not a template conservative in the mold envisioned by the folks who set up the recall scenario.

This man does not have a star on Hollywood Boulevard, but former vice presidential candidate Jack Kemp is said to be pondering a go at the governor. He has pass for glamour for political circles, he played football for the Buffalo Bills and the San Diego Chargers. You see where this is going. Kemp is a Republican, has a House in California, need we say more? Although he has yet to say anything.

(END VIDEOTAPE)

CROWLEY: And while we are talking about people who have nothing to say, that takes us to the White House which is saying, again, as it has in months past, that this is a matter that Californians must decide. With 55 electoral votes at stake here, one-fifth of the number that you need to win the presidency, you'd think the White House would be a little more involved.

But even Republicans here in the state say when they held a meeting with some White House types about the '04 election, the White House types refused to talk about this recall effort. Why? Says the White House -- when you ask someone at the White House, they will tell you two words, Richard Riordan. That is the man that the White House backed during the Republican primary and he was beaten by Bill Simon. And the president then had to come out here and make nice.

So the Republicans in California are on their own. The White House, both publicly and if you believe what they say privately, are out of the business of recall -- Judy.

WOODRUFF: But, Candy, can that really last? Because somebody on the Republican side is clearly going to get in in addition to those. It's either going to be Schwarzenegger or Riordan, it looks like. They're going to have to get in at some point, aren't they?

CROWLEY: I don't think so. And they probably would be wise if you sort of parse this out politically, it might be counterintuitive. But I think you could make a case that an unpopular Democratic governor in office will be better for the president's '04 chances than a Republican in office who has the same headaches that Gray Davis does. So they may not want to be getting into this. And, again, they got burned during the primary last year and are, you know, once burned, twice shy about this for the White House.

WOODRUFF: All right. We are reminded of that. Candy Crowley still out in California, thanks very much.

By the way, I just got off the phone with the man who is working with Arnold Schwarzenegger, George Gordon. He said, We decided he would win, the question now comes down to Arnold's family.

Well, the House of Representatives is scrambling to tick off its agenda before leaving for the August recess today. Lawmakers addressed early education and passed a measure that would allow Americans to buy prescription drug abroad, usually at a lower cost. For more on all this, let's turn to CNN's Jonathan Karl on Capitol Hill. Jon, they were there very late. Well, very early, I should say.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: 3:00 in the morning this all went down. There was that bill, the key bill here was the vote on the reimportation of prescription drugs. It would allow drugs to be imported from Canada and from the European Union where there are government price controls, and they cost less.

This is a bill that the pharmaceutical company spent mightily to defeat, the Republican leadership steadfastly oppose, and passed because, really, the work of one relatively junior Republican congresswoman. Jo Ann Emerson of Missouri is really the David in this David versus Goliath story.

She forced the Republicans to have a vote on this back last month when she was the deciding vote on the Medicare prescription drug bill. She said they could only have her vote if they allowed for a vote on this reimportation bill. The vote went down and it won.

Now if you remember back last month when she was that deciding vote, there was so much pressure on her that many people said that she was actually crying on the House floor. Today she said, not so.

(BEGIN VIDEO CLIP)

REP. JO ANN EMERSON (R), CALIFORNIA: I have to take a point of personal privilege. And we can have this on background. I did not cry on the House floor.

(LAUGHTER)

EMERSON: Thank you, all.

UNIDENTIFIED MALE: Someone a little sensitive, are we?

EMERSON: I just had to get -- I wanted to set the record straight.

(END VIDEO CLIP) KARL: But it's not law yet. It is it still would have to be agreed to by the Senate. And today 53 senators including Ted Kennedy on the left and Don Nickels and Orrin Hatch on the right said no way, no how, they're against the bill -- Judy.

WOODRUFF: Now, Jon, there was another vote we're all looking at last night and that's on Head Start. The Republicans won by a single vote. And there was an important Democrat who wasn't there. Talk about that.

KARL: That vote was at 1:00 a.m. And it was a real embarrassment for Dick Gephardt. Of course, presidential candidates, all these candidates have missed a lot of votes. But they all say that they will be there if their votes are actually necessary. And what happened last night at 1:00 in the morning was this came down to a single vote.

The Republicans actually wheeled in a wheelchair one member of their caucus, John Sullivan, a Republican of Oklahoma, who just a day earlier had been in a car accident and was not around. They actually wheeled John Sullivan in to vote. They passed their vote by a single vote. They passed that bill by a single vote.

Now, Judy, the key thing here is Democrats say this that bill would gut Head Start, they adamantly oppose it. Every single Democrat that was on hand voted against it. But Dick Gephardt was not there. The Democratic leadership and the House said they didn't think they were going to need his vote turned out. It turned out they did.

Now in a statement his spokesman, Erik Smith, says, quote, "Dick Gephardt has been a leading advocate for Head Start throughout his career. He did not support this bill and would have voted against it." Now, of course, he wasn't there, so he wasn't able to vote against it. It did pass.

And, Judy, you can imagine that issue will be raised in the Democratic primaries even though the other presidential candidates in Congress live in glass houses because they miss a lot of votes, too.

WOODRUFF: No question about that. All right. We will not throw stones today. Jon Karl, thanks very much.

And now checking the headlines in "Our Campaign News Daily," a new poll reveals potential cracks in support for Senator Joe Lieberman. The American Research Group survey of likely voters finds John Kerry in the lead again with 25 percent, followed by Howard Dean and Dick Gephardt. Joe Lieberman is at 6 percent. That's a five- point drop from a poll taken in June. Undecided voters jump from 19 percent last month to 30 percent in the new survey.

Democratic leaders in Congress have raised some eyebrows by nominating a union lawyer to the Federal Election Commission who opposes the new Campaign Finance Reform law. Democratic congressional leaders Tom Daschle and Nancy Pelosi recommended Robert Lenherd to the FEC post. Now Lenherd has taken part in a lawsuit to overturn the Campaign Reform law which Daschle, Pelosi and many other Democrats publicly supported.

Republican Party leaders made it official this morning, approving long-time GOP strategist Ed Gillespie as the new head of the Republican National Committee. Gillespie started his career working at the phone bank in GOP headquarters. He replaces Marc Racicot who will lead the Bush re-election campaign.

It only took a voice vote today to elect Ed Gillespie as the new chairman of the Republican Party, and he immediately raised his voice in support of his party's leader, President Bush. Gillespie took issue with Democrats for what he called a steady stream of protest and pessimism, with no real solutions to the economy or Iraq.

I spoke with Ed Gillespie earlier, a little earlier, and I asked him how the RNC will be different under him than it was under former Chairman Marc Racicot.

(BEGIN VIDEOTAPE)

GILLESPIE: Well, not much, Judy, to be honest with you. I'm very fortunate to succeed Marc Racicot. The only challenge here is to meet the high standard he set as chairman and to continue the good work that's been done we're going to expand on successes. It's not like this is an operation that needs to be turned around or people need to be shaken up.

The fact is what we need to do is keep the focus right where it's been, building our grassroots operation and energizing Republican voters and attracting new Republican voters around the country and attracting new Republican voters into the party which is very exciting to me.

WOODRUFF: So all this talk about Ed Gillespie's coming in with an iron fist as opposed to something softer, what do you say?

GILLESPIE: I'd say that I'm in a different circumstance than Governor Racicot was in the last cycle and that we are in a presidential election year and there are nine Democrats out there every day attacking the president, distorting the record of the Republicans in Congress and our Republican governors. And I have an obligation as party chairman to set the record straight and to make sure that the public is not misinformed about our record.

But otherwise the party is in great shape. Governor Racicot left me two of the greatest assets you can have in politics, a very talented and dedicated staff and a positive cash balance.

WOODRUFF: Well, setting that aside just for a moment, obviously the president's doing well in the polls. He slipped some, he's still clearly ahead. Are you at all worried though about whether his credibility is going to be tarnished by this whole flap over intelligence and whether it was hyped, coupled with the fact you've got troops, over 150,000 troops still in Iraq, soldiers dying every day, then you've got the domestic economy back here at home, jobs lost. How much of that is a headache for Ed Gillespie right now? GILLESPIE: It's not, Judy. And I'll tell you why. The fact is that the president has a great policy relative to winning the war against terror and securing our homeland. And I think every day as you watch the Democrats move away from a policy of preemptive self- defense toward a policy of reacting in the aftermath of terrorism, that's going to be disconcerting to the American people.

On the economy, President Bush has proposed a jobs and growth package that's just now starting to take effect this month as people adjust their withholding tables for higher take-home pay and I think that's going to have a very positive impact on the economy.

And he's also got a vigorous domestic agenda in terms of improving our public schools and expanding access to affordable health care and providing a prescription drug benefit in Medicare, lowering the cost of energy and reducing our reliance on foreign oil.

So I'm excited to get out there and carry the president's positive message and talk to voters about the positive agenda of the Republican Congress and the Republican president.

WOODRUFF: Let me ask you about something, though, specifically the president said yesterday. He was on the road. He talked about his tax cut plan. Particularly he pushed the child tax credit. He said he's for extending it to lower-income families.

But back here in Washington, a number of Congressional Republicans are not prepared to do that. And they say they're not feeling any heat from the White House to do that. Tom Davis quoted today as saying this isn't a big political issue. How can the president say he's for it but then not push his own party to pass it?

GILLESPIE: Well, Judy, obviously when he says that yesterday he's pushing the pass -- that he made the public case for the child tax credit. And I have talked to Republicans in Congress and now that the Republicans in Congress are anxious to help America's families and get a child tax credit done and then even then some to expand it.

Why should a teacher who is married to a police officer not be eligible for similar tax relief? We think they should. And so I think that they're just trying to find different ways to best implement that child tax credit, is my understanding of what's going on Capitol Hill.

(END VIDEOTAPE)

WOODRUFF: Ed Gillespie not needing any time to get broken into his new job as chairman of the Republican Party.

Well there's still much more to come on INSIDE POLITICS.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's no doubt that this is the two-by-four across the side of the head. We've tried everything else.

(END VIDEO CLIP)

WOODRUFF: Taking the gloves off. Is the push to get rid of California's governor a brazen example of a new world of nasty politics? We'll ask Ron Brownstein.

Plus the president gets knocked around on the House floor. That's part of the "Inside Buzz" with bob Novak. Stay with INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Well, if California Governor Gray Davis was unaware of just how tough politics can be -- we're not sure that he was, but we're just postulating that -- now he knows. Ron Brownstein of "The Los Angeles Times" say the Davis recall is the latest example of how nasty politics has become. Ron, people talk about how rare this situation is in California, but your point is that it's part of a lager trend.

RON BROWNSTEIN, "L.A. TIMES": Yes. Well, first of all, American politics has been a contact sport for all of our history.

But what's really changed over the last generation is the idea that there are limits or restraints on the combat. That has steadily crumbled. We're seeing both sides routinely using tools that were once -- or weapons -- that were once a last resort. Impeachment. Routine filibusters now in the Senate of judicial nominees, something we've never really seen before. Recall, redistricting. For the past century, except when ordered by a court, no state has ever redistricted in more than once a decade. Now we see in Texas and Colorado Republicans redistricting simply because they have more votes.

Gray Davis himself just two years ago -- last year, Judy, intervening in the Republican primary to sabotage one of his opponents, breaking a taboo really in American politics. And now, being really in reverse facing opponents who are just as willing to use a weapon that has very rarely been unsheathed in our history.

WOODRUFF: And in specifically in California, I think it was Lieutenant Governor Cruz Bustamante yesterday who said, Well, if somebody does come in, what's to stop the people from turning around and trying to recall him? Where does this end?

BROWNSTEIN: And even short of that, if a Republican governor is elected in this process, do you think a Democratic legislature is going to make it very easy for him to succeed?

The problem that we're in, the cycle that we're in really is one of atrocity and revenge. It Sort of like Bosnia or gang warfare where each side does something that so enrages the other, they feel like they can come back and attack them in reverse.

The problem for the electorate is that when politics -- the warfare of politics has no boundaries, when there are no rules, it's very hard for the two sides to ever say the shooting has stopped, we have to get together and solve problems. We see that in Congress, you certainly see that in the state legislature in California.

WOODRUFF: Is there anything out there on the horizon, Ron, that would suggest that an end can be put to any of this? Or are we headed down the road and that's the way it is?

BROWNSTEIN: I think we're headed down the road. I don't think a lot of other states (UNINTELLIGIBLE) recall governors. It's easier to do in California that it is in any of the other states. You need fewer signatures, there's more of a tradition of this sort of referendum Plebiscite kind of democracy.

But I do think this broader trend of escalating combat is one that's not going to go away. Can you imagine what the next Supreme Court nomination is going to look like in this environment if we're filibuster in routinely on appellate court nominees? What would that look like? And I think that gives you the sense of where we're going.

WOODRUFF: But the point is, what is it, less than half the states have a recall capability.

BROWNSTEIN: Only 18 have them, and it really isn't as easy (UNINTELLIGIBLE). I can't see a lot of other states following down this particular road. But the road of more warfare and more weaponry, yes.

WOODRUFF: And we're sure watching it all. OK, Ron, good to see you. Thanks very much.

Well much of the political attention this week has been focused on California, of course, and the effort to recall Governor Davis. Did Bill Schneider find his "Political Play of the Week" in the Golden State? Let's find out -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, let's see. You know, Republicans in California are a pretty miserable bunch. Democrats control every state-wide office. But this week a ray of hope in the form of the "Political Play of the Week."

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Why do Democrats control everything in California? Because the Republicans are too right-winged for a state whose motto might as well be "Whatever turns you on." Gray Davis got elected governor twice by demonizing his opponents as too right-wing for California.

But an obscure Republican Congressman figured out a strategy that could bring Davis down: make him the issue, not us. Darrell Issa spent $1.7 million of his own money on a petition drive to recall Davis. This week, the payoff.

LT. GOV. CRUZ BUSTAMANTE (D), CALIFORNIA: The date that I've decided to choose for this election is Tuesday, October the 7th.

SCHNEIDER: The question on the October 7 ballot will not be what it was in 1998 and 2002, Gray Davis or a Republican. For once, it will be Gray Davis or not Gray Davis. With the governor's popularity in the low 20s, Republicans think they can win that one.

REP. DARRELL ISSA (R), CALIFORNIA: It's not about Darrell Issa. This is about whether Gray Davis should be recalled for cause by the voters.

SCHNEIDER: Oh, yeah, says Davis? Think again. The governor intends to turn Issa into his opponent.

DAVIS: Darrell Issa is a right-winger. He's against gun control. He won't support a moratorium for -- on offshore drilling, and he's not for a woman's right to choose.

SCHNEIDER: You see, Issa is running on the ballot to replace Davis. Some Republican strategists would like Issa to disappear so the party can rally behind someone harder for Davis to demonize, like "the Terminator."

But Issa says he ain't going nowhere.

ISSA: I intend to be there every day for the rest of Gray's 100 days, making his life and his departure a certainty, and making his time he has left in office the most miserable that I can.

SCHNEIDER: So far, Darrell Issa's kept that promise with "The Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: If the race becomes Davis versus Issa -- well, Davis can win. But if the alternative is someone broadly acceptable, a moderate Republican or another Democrat, then the race becomes Davis versus Davis. And in that case, Davis is in trouble -- Judy.

WOODRUFF: Hmm. All right. Bill Schneider, "the Play of the Week." Thanks.

Still to come on INSIDE POLITICS, the Republicans control Congress, but President Bush has had a tough time lately on the Hill.

Bob Novak will join us with the "Inside Buzz."

(COMMERCIAL BREAK)

WOODRUFF: Bob Novak joins us now from the "CROSSFIRE" set at George Washington University with some "Inside Buzz."

President Bush suffered, Bob, some setbacks this week on the Hill. The latest one last night, prescription drugs. What happened?

ROBERT NOVAK, CO-HOST, "CROSSFIRE": It was very surprising because the administration thought it was going to be a close vote. It wasn't close. Earlier in the week, they were beaten down on the FCC anti-monopoly standards. So that's very interesting that a popular president gets beat down by the Republican House twice in one week.

WOODRUFF: We should say -- I said prescription drugs, it's about importing.

NOVAK: Importation. Reimportation.

WOODRUFF: ...into this country. All right. Let's talk about California yet again. You picked up some good information about who might run.

NOVAK: We're talking about Jack Kemp. He's letting his name be out there. Now, Arianna Huffington -- you remember her -- she is now an independent and she is actually calling political consultants to attend meetings. But the thing I really like is our old friend from "CROSSFIRE," Bill Press, says he is considering it. Can you believe that? Running for governor of California.

WOODRUFF: Next thing we know it may be one of you guys. All right. Big battles ahead on judicial nominees.

NOVAK: The White House says that the Attorney General Bryant of Alabama came out of committee 10 to 9. They're going to filibuster him. The White House now says there will be four filibusters on judicial nominations going on at once. One is unprecedented, four, and there may be more coming.

WOODRUFF: And finally, Bob, a high-powered New York developer coming down to Washington for what reason?

NOVAK: Larry Silverstein has the contract on leasing at the World Trade Center, and a lot of eyebrows were raised because he has hired Quinn Gillespie, the big-time, high-powered lobbying firm in Washington. What is Larry Silverstein, who is a New York developer, need with a Washington lobbyist? That's the buzz in lobbyist circles which I know you like to be kept up on, Judy.

WOODRUFF: I do. And if anybody can find out what he does need a lobbying firm for it's going to be Bob Novak. All right. And you'll be the first to tell us, right?

NOVAK: Thank you.

WOODRUFF: OK. Bob Novak. Thanks. Have a great weekend. We'll see you on "CROSSFIRE."

Coming up, we had a war of words in the Congress this week, but nothing like this. The political fistfight when we come back.

(COMMERCIAL BREAK)

WOODRUFF: If you think things are rough on Capitol Hill, look at this. A verbal and physical fight broke out in the Japanese Parliament today. It came as lawmakers in Tokyo voted to send Japanese forces to Iraq to help rebuild the country. No reports of any injuries.

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

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



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