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Massachusetts High Court Rejects Ban on Same-Sex Marriage; Bush in Britain: A Chilly Reception?; Interview With Terry McAuliffe

Aired November 18, 2003 - 15:30   ET


ANNOUNCER: A New ruling on gay marriage just in time for the 2004 campaign.

UNIDENTIFIED FEMALE: This is the first time a state court has recognized the right of gay and lesbian people to be married.

UNIDENTIFIED FEMALE: The court are just having a will of their own, and they're not representing the will of the people at all here.

ANNOUNCER: President Bush lands in Britain. Can he change the perceptions of Europeans who see him as a reckless cowboy or a comical figure?



ANNOUNCER: Howard Dean's heartbreak.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: We think that what happened was the North Vietnamese decided that he'd better off dead than asking any embarrassing questions.

ANNOUNCER: A final chapter may be unfolding in the search for Dean's brother.



JUDY WOODRUFF, HOST: Thank you for joining us. Well, the '04 Democrats don't seem all that eager to comment on the Massachusetts high court's decision, clearing the way for gay marriage. No rush to the microphones that we have seen, no flood of e-mail. Just a few brief campaign statements. And that speaks volumes about the politics of gay marriage in today's ruling, heading into an election year.


JULIE GOODRIDGE, PLAINTIFF: Thank you very much. And mostly thank you to the Supreme Judicial Court of the state of Massachusetts for seeing what we know to be true, which is that we are a couple that is worthy of the protections of marriage, and that after 16 and a half years, Hillary and I are finally going to be able to get married and protect our family.

WOODRUFF (voice-over): The personal and political collide as the Massachusetts Supreme Court clears the way for gay marriage. In a 4-3 ruling, the judges found that "a person who enters into an intimate, exclusive union with another of the same sex is arbitrarily deprived of membership into one our community's most rewarding and cherished institutions."

Openly gay Massachusetts Congressman Barney Frank heralded the ruling.

REP. BARNEY FRANK (D), MASSACHUSETTS: And so this is one of those times when public policy can strike a blow against unfairness in general, advance in particular the real lives of significant but not an overwhelming number of people, and have no negative effect on anyone else.

WOODRUFF: But Massachusetts Governor Mitt Romney promised to fight, declaring that "Marriage is a special institution that should be reserved for a man and a woman." And vowing to support an amendment to the state constitution to make that expressly clear. In Washington, fighting words from the GOP.

SEN. JOHN CORNYN (R), TEXAS: The courts, rather than our democratically elected representatives, are making decisions that go to the very core of who we are as a nation and who we are as a civilization.

WOODRUFF: And a vow to protect the federal Defense of Marriage Act, known as DOMA, which defines marriage as a legal union between a man and a woman.

SEN. BILL FRIST (R), MAJORITY LEADER: It is an issue, as we watch what's happening with the courts, that in some shape or form, we'll be addressing here in the United States...

WOODRUFF: But Minority Leader Tom Daschle, who disagrees with today's ruling, says DOMA is safe.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: Oh, I'm sure that there are some who may want to make political hay, but I believe that the issue is as clear as can be. We passed the Defense of Marriage Act by an overwhelming margin on a bipartisan basis. The law still stands today, and I think it would under any court scrutiny.


WOODRUFF: Well, many Democrats have mixed views about the Massachusetts ruling, as you can tell. It takes a score card, in fact, to keep track of where the party's presidential hopefuls stand on gay marriage.

Carol Moseley-Braun, Dennis Kucinich, and Al Sharpton support gay marriage. Wesley Clark, Dick Gephardt and John Kerry oppose gay marriage, but they support civil unions that give same-sex couples equal protection under the law. John Edwards and Joe Lieberman oppose gay marriage and believe that states should decide whether to approve civil unions.

Howard Dean says that he personally is opposed to gay marriage, but he believes it is up to states to decide that question and whether to grant civil unions. As the governor of Vermont, Dean signed that state's first civil unions law -- rather, the first civil union law in the nation. President Bush opposes gay marriage, but he has been less clear about his stand on civil unions.

Informing their positions on gay marriage, the politicians are, at least to some degree, taking their cues from voters. Our senior political analyst, Bill Schneider, joins us now from Miami.

Bill, first of all, what do Americans say? How do they feel about the idea of gay marriage?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Judy, strongly opposed. Just over a third of Americans told us last month that they believe marriages between homosexuals should be recognized as legally valid. Sixty-one percent were opposed, and that hasn't changed much over the past seven years.

Now, what if you leave the word "marriage" out of it? In a poll taken this summer, 40 percent of Americans favored a law that would allow gays to form legally recognized civil unions with the same rights as married couples. People's problem with gay marriage is not the legal rights.

Last spring, about half of the public said they thought gay couples should have the legal right to adopt children. Sixty-two percent endorsed the idea that gay couples who have the same legal rights as married heterosexual couples when it comes to health benefits and inheritance.

Rights? Fine. Marriage? No.

Why? Because Americans are willing to tolerate gays and to endorse equal rights, but they're unwilling, unwilling to express approval of homosexuality. And to most persons, Judy, gay marriage means approval.

WOODRUFF: Well, Bill, I know there's some difference based on the age of people you're asking -- who are asked in the polls. Is there any evidence that these views could change?

SCHNEIDER: Well, there is, and it's exactly what you just mentioned. It's an issue on which there are very big differences by age.

About half of Americans under the age of 30 say they favor the legal right to gay marriage. That number drops to 38 percent of people who are 30 to 49; 30 percent of people who are 50 to 64; and only 22 percent of seniors say that they favor gay marriage. For a lot of young Americans -- young Americans -- gay rights is their generation's civil rights issue. They are more likely to know people who are openly gay, and they are outrage by bigotry -- what they regard as bigotry and discrimination against gay people. We saw that at the Rock the Vote debate up in Boston earlier this month.

And my guess is they're not going to change their views as they get older. This younger generation is likely to change the society's view of gays and their rights in society -- Judy.

WOODRUFF: All right. Bill Schneider, thanks very much.

President Bush now is in Britain for a state visit, expected to be clouded by European anger over the war in Iraq. Here is the -- here in the United States, our New poll, out this hour, shows a majority of Americans still support the president's initial decision to go to war. But 55 percent say they now disapprove of the way he has handled the situation in Iraq since major combat ended. And that is up from 50 percent just last month.

Our senior White House correspondent, John King, with the president in London. John, just how big a protest situation is the White House expecting over there?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Judy, the White House has been told by British authorities to expect 60,000, perhaps as many as 100,000 protesters in the streets over the next three days. Of course, the official welcoming ceremony comes tomorrow morning at Buckingham Palace.

Mr. Bush, though, did arrive tonight. Prince Charles greeted him at Heathrow Airport. Extraordinary, unprecedented security, more than $8 million spent in London here for security efforts, some 14,000 members of the London police. Most of that a reflection of opposition to the president's war in Iraq.

Other protesters out as well, though, as Mr. Bush travels. To the extent that the president will see them is quite unclear just yet. We have to see as the president makes his way through town, how much of the protesters he encounters. But make no question, Judy, these will be the largest protests to greet this president in some time. Mr. Bush trying to make the best face on all of this, saying that this is "a fantastic display of democracy" -- Judy.

WOODRUFF: John, this New CNN-"USA Today" Gallup poll out shows that, right now, people are split over whether it's going to be security or the economy that matters more in their vote for president next year. Now, previously, people were saying that the economy was going to matter more to them. How much of a concern is it to the White House if terrorism, if security becomes -- looms larger in the public's mind?

KING: Well, remember, Judy, just a few months back, this White House political team thought that was the president's greatest strength. That is now an open question. And let's look at the numbers -- we discussed this. Asked, "Which is more important to your vote," the poll respondents now say -- 43 percent say the economy, 43 percent say national security, an even split. Back in April, it was 53 percent said the economy was more important, only 36 percent saying national security.

Democrats, of course, say this is proof that the public is turning against the president when it comes to the situation in post- war Iraq. There are concerns about rising casualties and securities -- security issues. Republican pollsters would say, though, that even as there may be more questions and skepticism about President Bush, that the Democrats have yet to prove themselves.

Voters still trust the president by a significant margin on the broad issue of national security. Most significant from the White House perspective, Judy, they say this number is interesting now. Obviously, a cause of concern for them, but much more important, of course, will be what the voters think next summer, heading into next fall about this. It is one of the reasons it's so important this accelerated political transition go well, even though the White House continues to insist this accelerated transition has to do with handing power over to Iraqis, not trying to protect the president politically back at home -- Judy.

WOODRUFF: All right. Well, one thing is for sure. We know they watch these numbers very closely.

All right. John, thank you very much, covering the president's visit to London.

KING: Yes, they do.

WOODRUFF: Well, from Iraq to gay marriage and the '04 race, there is plenty to talk about next with DNC Chairman Terry McAuliffe. And we'll see if he's feeling secure about his own job these days.

Also ahead, Governor Schwarzenegger meets the press. Did he spell out any more of his plan for straightening out the state budget?

And later, Madonna as campaign advisor? She apparently has the ear of one of the '04 Democrats.

This is INSIDE POLITICS, the place for campaign news.


WOODRUFF: Checking the headlines in our "Campaign News Daily," six of the nine Democratic presidential candidates attended a New Hampshire forum today sponsored by the Association of Americans -- of Retired Persons. They took turns criticizing one another, as well as a Republican-backed prescription drug plan for Medicare, something AARP has endorsed.


WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: Well, I think this bill is a mistake.


SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Are you telling me that we couldn't pass something this year that gives people a prescription drug benefit this year?


WOODRUFF: The Wesley Clark campaign is spending more than a $1 million on TV advertising in New Hampshire. The first commercial is mostly biographical, with some implied criticism of President Bush.


NARRATOR: He helped negotiate a peace between bitter enemies and led a multinational force that stopped a campaign of terror. Liberated a people and brought peace without the loss of a single American soldier.


WOODRUFF: Also in the TV ad wars, John Kerry's latest commercial in Iowa attacks President Bush's record on energy and the environment.


NARRATOR: George Bush, he let corporate lobbyists rewrite our environmental laws, sided with polluters, not taxpayers, and now he's trying to roll back the Clean Air Act. John Kerry, he stopped Bush and the oil companies from drilling in the Arctic and has a plan for energy independence.


WOODRUFF: The Democratic presidential candidates are not just attacking President Bush. They are throwing harder and harder punches at one another. When the primary season slugfest finally ends, my next guest has to pull this party back together. I'm joined by Democratic National Committee Chairman Terry McAuliffe.

Good to see you, Terry McAuliffe.

TERRY MCAULIFFE, DNC CHAIRMAN: Hi, Judy. Good to be back.

WOODRUFF: All right. Let's talk about this ruling today from the Massachusetts State Supreme Court clearing the way, in essence, for gay marriage. While the court has done that; the polls show most Americans don't like this idea. Could this be a problem for your party next year?

MCAULIFFE: Well, the court ruled that it has to go back to the state legislature. And, as Dick Cheney said in the 2000 campaign, these types of issues ought to be dealt with by state legislatures. So we're in agreement with Vice President Cheney, but this election, Judy, will not be fought on these wedge issues, which I know the Republicans are going to try and do.

It's going to be fought on the three million jobs lost under George Bush, the 43.5 million people today that don't have any health insurance. That's what the campaign of 2004 is all about. We'll let these issues go back to the state legislatures and let them legislate it.

WOODRUFF: Let me ask you about the South. Democrats won a governorship in Louisiana this week. I know you're celebrating that.


WOODRUFF: But Democrats also lost in Kentucky and Mississippi. Most polls in the South -- in fact, all the polls I've seen -- show that President Bush is doing better in the South than he is in any other part of the country. Are you ready, as Democrats, to write off the South next year?

MCAULIFFE: We're never going to write off the South. I can tell you, since I've been chairman of this party, in the last three years, Judy, we have spent three times more money in southern states than in the history of our party. So what the DNC does, we're in charge of money and mobilization and people. We have put more money than we've ever done before, because we can win in these southern states.

We can win five, six southern states. I think what we learned in Louisiana, even though we were outspent three to one, when we get our message out, when we get our troops mobilized, we win elections. And the Kathleen Blanco win as a strong signal to George Bush that we're in the South and we're going to stay in the South to play.

WOODRUFF: But you not only have lost -- I mentioned Mississippi, Kentucky, California went down. Arnold schwarzenegger's a Republican govern there. Some speculation about you, Terry McAuliffe, and whether the Democrats are doing well enough and whether, you know, somebody else ought to have your job. What's going on?

MCAULIFFE: Well, first of all, who wants my job? But I've got to tell you, the DNC, we're in charge of the presidential election. We're in the best shape we've ever been in.

We have millions of dollars in the bank, we're debt-free. We have new voter files (ph), new headquarters. Our coordinated campaign plans are up and running.

We're in great shape. We're going to win an awful lot of elections. I remind you, in 2000, there were 19 Democratic governors. Today, we have 22 Democratic governors.

We had huge wins two weeks ago in Pennsylvania, in New Jersey, in New York, states that we need to win, to win the electoral college. We're doing great. Our message is working.

Look at your own poll out today, Judy. George Bush has dropped precipitously. He is in real trouble. He's dropped nine points with women, seven with Independents, four with men. WOODRUFF: Well, let me ask you about Democrats, though.


WOODRUFF: You were just saying, you know, your problem is you've got nine different candidates, nine messages. The front-runner at this point seems to be Howard Dean. He's raised more money than anywhere else. He's doing well in the polls. And yet, you have state party chairs, state officials around the country in your own party who are concerned.

Let me just quickly quote Kentucky's Democratic party chair, state Representative Susan Westrom. She says, "Unless his perception" -- meaning Dean -- "can go beyond the governor of Vermont who signed legislation supporting gay marriages, that is the death knell here in Kentucky." In other words, Democrats saying, if Howard Dean is our nominee, we've got problems.

MCAULIFFE: I couldn't disagree stronger. I love all nine equally. That's what the national party chairman does.

Howard Dean is running a great campaign. I don't know who our nominee will be, but I can tell you this, Judy, once the nomination is over, which I think will be in mid-March, we are all going to unify behind one candidate.

This is going to be about George Bush's failed policies leading this country domestically and the issues of foreign affairs. Our message is going to be, America will get this country moving again.

Howard Dean will be a great nominee of the Democratic Party, as the other eight. I don't know who will win it today, but I can tell you this, if Howard Dean were the nominee, I'd be darn proud to have him as a nominee of the Democratic Party. And I speak for many state chairs around the country. But all the other eight would be great nominees.

WOODRUFF: Spoken like a neutral party chair. Very quickly, Republicans led Congress, pushing through Medicare reform, prescription drug bill. This week, they're also pushing through energy legislation. If this comes to fruition, and Republicans can say, we did this, doesn't this take two important issues off the table for the Democrats next year?

MCAULIFFE: Well, I don't think the Medicare issue is going to be taken off the table. Many people who say they're going to vote for this piece of legislation are also saying we're going to have to go back and fix it immediately. There are a lot of concerns about this, the prescription dug benefit is not what people think it is.

People can end up paying higher premiums. More seniors could be left out. There are a lot of issues about this, and we'll see where we go.

People have to feel good about their own economic outlook. They know George Bush has not done what he promised he would do as it relates to jobs, health care and on education. Those are going to be our issues heading into 2004. And that's why your poll today and many polls show George Bush being beaten in 2004.

We're going to be unified, we're excited. We're in the fourth quarter. This is all about '04, and we've never been in better shape.

WOODRUFF: Terry McAuliffe, saying he's staying on the job, right?


WOODRUFF: Is that what you're saying?

MCAULIFFE: I'm here through February '05. And then we have a new Democratic president. Then who knows what will be next.

WOODRUFF: Democratic Party Chairman Terry McAuliffe, thanks for stopping by.

MCAULIFFE: Thanks, Judy. Great to be with you.

WOODRUFF: We appreciate it.

Well, for decades, Howard Dean and his family have searched for answers in the death of the presidential candidate's younger brother. When we return, we'll tell you about a new discovery in Laos that could help solve the mystery.


WOODRUFF: The National Transportation Safety Board has ruled pilot error caused the plane crash that killed Senator Paul Wellstone of Minnesota. The crash in October of last year happened just before Election Day. Also killed were Wellstone's wife and daughter and five other people. In making its determination, the NTSB accepted the finding of investigators who have been working the case.

A discovery in Southeast Asia could shed new light in the case of Democratic presidential candidate Howard Dean's missing brother. The Pentagon says that it has uncovered remains from the site in Laos where Charles Dean is believed to have been killed and buried. The remains will undergo tests in Hawaii.

The younger Dean and a companion from Australia were detained in 1974 by communist rebels while the two were traveling in Laos. Howard Dean and his family have searched for answers since the disappearance. Today, Dean said he is reasonably confidant that his brother's remains have been found. And he says he's pleased with the efforts of the U.S. military to try to bring closure to the case.


DEAN: This whole operation is an extraordinary credit to the United States government, to the United States military. And I'm deeply appreciative, and our family is deeply appreciative.


WOODRUFF: While Charles Dean was a civilian when he disappeared, the U.S. government has considered him a prisoner of war.

Coming up, from Congress to the campaign trail, a political fight raging over your prescription drugs. We'll go live to Capitol Hill for an update. And I'll speak with Health and Human Services Secretary Tommy Thompson.

And Arnold Schwarzenegger holds a news conference on his first full day in his new job. We'll tell you what California's governor had to say.



ANNOUNCER: Gays and lesbians applaud a court ruling on same-sex marriages.

UNIDENTIFIED FEMALE: Without a doubt, this is the happiest day in our lives.

ANNOUNCER: But will opponents of the decision be energized on Election Day?

FRIST: I don't think the Democrats are going to stand between $400 billion of benefits going to seniors.

ANNOUNCER: Political reality or wishful thinking, as GOP leaders try to plow ahead with a prescription drug bill?

One on one with Madonna. No, not the kiss again. The material girl has reached out to a presidential candidate.



WOODRUFF: Welcome back. In Massachusetts, gay rights activists are preparing to hold rallies celebrating the state's high court landmark ruling on same-sex marriage. But from Boston to Washington, many political figures of both parties have mixed emotions about the decision.

In the 4-3 ruling, the Massachusetts Supreme Court said that a ban on gay marriage violates the state's constitution. The court gave the state legislature 180 days to take what it called appropriate action. The decision stops short of requiring that marriage licenses be issued to same-sex couples right away.

Republican Governor Mitt Romney of Massachusetts says that he disagrees with the decision and that he supports a proposed constitutional amendment defining marriage as a union between one man and one woman. (BEGIN VIDEO CLIP)

GOV. MITT ROMNEY (R), MASSACHUSETTS: We obviously have to follow the law as provided as the Supreme Judicial Court, even if we don't agree with it. We're going to follow it in terms of preparing legislation, and we'll have legislation which conforms with the law. But we will at the same time initiate a constitutional amendment process, and that constitutional amendment process will be consistent with what I think the feelings are of the people of the commonwealth.


WOODRUFF: Will this ruling make gay marriage a hotter hot button of an issue in the upcoming presidential election year? We're joined now by American Values President Gary Bower and by Gephardt Campaign co-chairman David Mixner, who is taking part in the discussion in his role as a gay activist -- we want to make this clear -- and not as an adviser to Dick Gephardt.

Gentlemen, thank you both for being with us.


WOODRUFF: Gary Bower to you first. Does this make it even more certain that the issue of gay marriage is going to be on the table in campaign '04?

GARY BOWER, PRESIDENT, AMERICAN VALUES: I think so. I don't see how anybody in political life can ignore it. And it's not because conservatives are trying to find a wedge issue. The conservatives don't control the Massachusetts supreme court or the Vermont supreme court.

People know what marriage is, it's between a man and a woman. And I think when you get these kinds of decisions, it's guaranteed that everybody from the president to Dick Gephardt are going to be required to take very clear positions on it.

WOODRUFF: David Mixner, this is a legitimate issue, then?

DAVID MIXNER, GAY ACTIVIST: I think any issue that people have concerns about are a legitimate issue. But I think we have to put it in perspective. What this the court says is very simply no church, no religious institution has to conduct any ceremony against their personal beliefs.

But it simply says that the same rights, protections and benefits granted to any other American are granted to gay and lesbian Americans. It's that simple.

And I believe deeply that the fairness of the American people will support that position.

WOODRUFF: Gary Bower, President Bush, in a somewhat of a delicate position here because on the one hand, he clearly wants to appeal to the conservative base, so to speak. At the same time, he doesn't want to let go of moderate Republicans.

Is he going to be -- are you and others, who share your view, going to be disappointed if he doesn't push for a Constitutional amendment supporting marriage as purely a union between a man and a woman?

BOWER: Judy, I -- disappointed pointed would probably be putting it mildly. But I'm not worried, because I don't believe he can do anything other than support the idea that marriage is between a man and a woman. Not only does his base...

WOODRUFF: But I mean aggressively push for that...


WOODRUFF: Because he hasn't done it so far.

BOWER: Well, it hasn't been ripe until now. I think there were some who still didn't believe that this was the direction we were headed. But George Bush doesn't want on his watch to say that marriage, defined as the union of one man and one woman, was lost.

Three thousand years of Western civil civilization has said it's between one man and one woman, and the public, Judy, overwhelmingly agrees. He doesn't have a problem with losing moderate voters on this. Even moderates even say marriage should remain between a man and a woman.

MIXNER: Well, actually, the public doesn't overwhelmingly agree. I mean, 77 percent of the Massachusetts citizens in the last poll said they'd like to see civil unions or marriage granted to gays and lesbian people as a way of insuring their benefits and protections and so forth.

No, maybe a majority in the nation disagrees, but I got to tell you something. When they go into the voting booth come next November, they're not going to vote whether I'm in love with someone and have the same rights and benefits and privileges as other people. They're going to vote on jobs, whether their sons are coming home from Iraq, whether they have safe streets and whether they are in good shape as Americans.

WOODRUFF: But you, David Mixner, think it's smart for Democrats to push gay marriage next year? I mean why not stick with the position of civil unions, which is going to cause enough problems?

MIXNER: Every Democratic candidate doesn't support gay marriage, as a matter of fact. Every Democratic candidate supports civil unions. And I don't know of a candidate, including the one I'm supporting -- and I wish he was different -- support gay marriage. You won't find that happening this year in political process.

WOODRUFF: Given that, Gary Bower, why is this issue going to be front and center?

BOWER: Because every one of the Democratic candidates will oppose the attempt to do the one thing that can ensure that marriage remains between a man and a woman. That's a Constitutional amendment that makes it clear that no state will be forced to recognize the marriages that take place in Massachusetts if, down the road, they end up taking place.

One other point on this. In spite what David said, there's no state in the union that will vote for this. California had it two years ago, defeated it overwhelmingly. So, in addition to everything else, to have radical judges forcing this on American people is ill- advised.

MIXNER: It's very simple. You know i Want to deal directly with this Constitutional amendment issue. This will be the first time in the history of our country that we've put an amendment into the Constitution of the United States, our most sacred document, that specifically excludes an American group of citizens from the same rights, benefits and privileges granted every other American citizen.

That is a very serious step for this nation to take. And I'm not as convinced as Mr. Bower that Mr. Bush will push it as hard as he thinks he will.

WOODRUFF: What makes you think he will? The president will?

BOWER: Well, first of all, the radical thing is not putting this in the Constitution. The radical thing is what the Massachusetts supreme court did today.

WOODRUFF: But will the president push it?

BOWER: The president will push it because he knows it would be a catastrophe, not politically, it would be a catastrophe for the country.

You can -- anybody in America can get married. But you can't marry anybody you want. You can't marry somebody already married. You can't marry a group of people. And you can't marry somebody of the same sex.

MIXNER: No, it's not an issue of what's radical. It's an issue of what's American and fair. It's an issue what's loving between people. That's what the issue is.

WOODRUFF: We're going to have to leave there it. David Mixner, Gary Bower, gentlemen, thank you both.


WOODRUFF: Well the debate over same-sex unions continues at the bottom of the hour. Congressman Barney Frank takes on the Reverend Jerry Falwell in the "CROSSFIRE" at 4:30 p.m. Eastern.

Back on the national political scene, the political debate over Medicare is putting many Democrats in a bind on Capitol Hill and on the presidential campaign trail. Here's another taste of how the '04 Democrats today scolded the powerful AARP for endorsing a GOP-backed prescription drug bill.


REP. DICK GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: It was written by the pharmaceutical companies and the HMOs. That's what you need to understand. And what's wrong about AARP coming out for this bill is that they're falling into the trap that's been set by the pharmaceutical companies and the HMOs. They will never do what's right for this -- for the people of this country.


WOODRUFF: Well, now let's get an update on the Medicare maneuvering on Capitol Hill. Here's our congressional correspondent, Jonathan Karl. Jon, where does everything stand?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, we have a look now at the ad campaign that many Republicans think will be decisive in the battle of prescription drugs and Medicare up here in Capitol Hill.

The AARP, you just talked about, is spending $7 million, at least $7 million, on a radio -- on a television and print ad campaign that will be national and will start tomorrow. Here is the television ad they'll be running.


UNIDENTIFIED MALE: For years, AARP has worked with Congress...

UNIDENTIFIED MALE: ... to add a prescription drug benefit to Medicare.

UNIDENTIFIED FEMALE: And finally, a bill is about to be voted on.

UNIDENTIFIED FEMALE: While it's not perfect, we know there are millions of Americans...

UNIDENTIFIED MALE: ... who can't afford to wait for perfect.

UNIDENTIFIED FEMALE: They need action now.

UNIDENTIFIED FEMALE: This is a good opportunity that will be gone if not approved this year.

UNIDENTIFIED MALE: That's why AARP supports this bill as a good first step.

UNIDENTIFIED MALE: And we promise to keep fighting to make your prescription drugs more affordable.

UNIDENTIFIED FEMALE: Tell Congress to keep their promise.

(END VIDEO CLIP) KARL: Now, that ad will be running on national cable. It'll also be running on broadcast stations around the country and in the major newspapers. They'll be running it nationally, but they'll also be targeting senators and congressmen they think are undecided, including moderate Democrats in the House, moderate Republicans and Democrats here in the Senate.

One person that they're looking at is Harry Reid, the No. 2 Democrat in the Senate, who as part of the leadership has been somebody who would be expected perhaps to vote against this and somebody who would help the leadership try to defeat this on the Democratic side. But is also somebody up for reelection in Nevada, a state with a very high concentration of senior citizens.

Meanwhile, John Kerry at that AARP forum you mentioned, Judy, said that he wishes that the AARP had spent the $7 million to defeat the bill, not to support the bill. So while that's going on and Democrats are creating distance between themselves and the AARP, Republicans are buoyed by the endorsement and are practically daring Democrats to oppose the bill.


SEN. BILL FRIST (R-TN), MAJORITY LEADER: We have worked very hard in the conference to produce a bipartisan bill. And thus, I don't think the Democrats are going to stand between $400 billion of benefits going to seniors.


KARL: If Democrats want to stand in the way, they say it is because they believe that this bill will do more harm than good. A point Tom Daschle made earlier today.


SEN. TOM DASCHLE (D-SD), MINORITY LEADER: We estimate that about one-quarter of all senior citizens will be worse off virtually the day this bill passes. And we're deeply concerned about those and Medicaid who will be forced to pay higher drug prices and those who are retirees who will be forced off their insurance drug coverage as soon as this legislation goes into effect.


KARL: This will be an intense debate over the next several days, but the Republicans are hoping to get this bill passed by perhaps the weekend or at the very latest by the beginning of next week, and certainly before Thanksgiving -- Judy.

WOODRUFF: All right. Jon Karl, so much to keep an eye on right now in these last few days. Thanks, Jon.

Well now, we turn to California and Arnold Schwarzenegger's first news conference as governor. The Republican told reporters today he wants a state legislature to put a bond measure of up to $15 billion on the March ballot as a step toward fixing California's finances. Even that would not be enough to erase a budget deficit now estimated at more than $24 billion.


GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I am committed bringing California back. My California recovery package is an important first step. We cannot fail the people. And I need the people to help me accomplish my goals on their behalf.

So I urge all the people to let their voices be heard. Write and call your legislators and let them know that you want action and you want action now.


WOODRUFF: Schwarzenegger says that he'd also like to see Californians vote on a state spending limit to make sure politicians are never again allowed to overspend.

Well congress is considering a prescription drug plan for Medicare. Is it just what the doctor ordered or a political placebo? I'll ask Health and Human Services Secretary Tommy Thompson.

Also ahead, I will talk with a Wesley Clark campaign spokesman about the general's new advertising blitz.

Plus, a behind the scenes look at where all the money's coming from for the 2004 TV ad wars.


WOODRUFF: As we reported earlier, the Democratic presidential candidates are critical of the Medicare reform plan working its way through Congress even though AARP supports the bill's new prescription drug benefit.

Joining us now is Health and Human Services Secretary Tommy Thompson. Mr. Secretary, good to see you.

TOMMY THOMPSON, HHS SECRETARY: Well, Judy, it's always a pleasure to be with you and on your program. Thank you very much.

WOODRUFF: Thank you very much.

The Bush administration was pushing, we understand, to allow private plans to compete with Medicare to create more competition, to bring prices down. But the analysts who have been looking at this deal that finally worked out in the Congress said they don't think the plan is going to create much competitive pressure. Did the administration end up losing on that aspect of it?

THOMPSON: First off, the administration didn't ask for this. This was something that was put in by the House of Representatives. This was not in the basic plan that was submitted by the administration, by the president. We supported it after the House of Representatives passed it, but we believe the compromise is very good. The compromise is going to allow for -- what we wanted was choice. And that's what this proposal is going to do.

It's going to give seniors in America the opportunity to have same kind of choices that you have, that other members of the federal government have, that I do. And that's what the president really wanted was choice.

The second thing was he wanted prescription drug coverage and that's what this bill delivers is choice and prescription drug coverage.

WOODRUFF: And what about the competitive pressure not being here?

THOMPSON: The competitive -- there's going to be a demonstration, but not a demo program, but not until 2010. And it's going to be a very small demonstration but it's only going to run for six years.

WOODRUFF: All right. We've talked about the criticism already coming from the Democrats. But you've also got criticism coming from conservative Republicans. Congressman Jeff Flake of Arizona said -- and let me just quickly quote -- he said, "The enormous cost of this proposal will only hasten Medicare's insolvency." And he says the bill's an extremely way to buy votes. What do you say to him?

THOMPSON: Well I say to Jeff and I say to all those individuals out there who are doubting this particular proposition, take a look at all the supporters. Take a look at what this bill is going to accomplish. Take a look at what everybody was campaigning on for the last three election cycles.

Everybody was campaigning on giving seniors prescription drug coverage. This bill delivers on that. It's been six years and nobody has been able to get this bill to the finish line like the Congress and the administration's been able to do this year.

And what it really is going to do is give poor seniors the opportunity -- and just think of this. If you have a poor senior out there that cannot pay for their drug bills, and that is costing $800 a month, it's going to pick up 61 percent of the drug costs by the federal government.

It's a huge incentive, it's a huge opportunity for Congress.

WOODRUFF: Let me ask you about another aspect of the criticism. Obviously, the cost of prescription drugs is an effort, something that's been pushing Medicare reform for some time. But we now have a woman with the Consumers's Union in Gail Shearer who is saying that this bill is favoring the prescription -- or rather the drug industry over consumers.

She says, quote, "At the top of the list is the pharmaceutical industry which seems to have managed to escape any effort to reign in what they charge consumers."

THOMPSON: Well it's easy to criticize, but this is the most complex, comprehensive piece of legislation that this Congress has taken up for many years.

And this is one that's going to allow for to us rejuvenate Medicare, put preventative health in and provide prescription coverage. And AARP, the organization that represents seniors, is coming out fully, enthusiastically endorsing it. And it indicates she's looking for a fight that's not there.

WOODRUFF: So you're saying the prescription drug industry, the pharmaceutical industry, is going to be pressured, pushed as a result of this legislation to lower prices?

THOMPSON: Oh, absolutely. There's no question about it. When you have the purchasing power of seniors in Medicare, you're going to drive down the prices. We think about 25 percent.

We're first going to have a prescription drug card that's going to provide seniors the opportunity to have cost savings of 10 to 25 percent next year. And then when Medicare fully kicks in in 2006, there's going to be a lot better opportunity to drive down the cost, because the huge number, the volume of purchase by the senior citizens through Medicare is going to drive down the prices by, we think, probably 25 percent.

WOODRUFF: Obviously some very different views at work here. But we want -- we very much wanted to get your view. Secretary of Health and Human Services, Tommy Thompson...

THOMPSON: Thank you very much, Judy.

WOODRUFF: ... it's always great to see you. Thanks for coming by. We appreciate it.

Well the message is push an agenda, but they are not from a political party. Just ahead, we'll take a look at the jump in television ad spending by independent groups.


WOODRUFF: As we reported earlier, Wesley Clark is launching a TV ad offensive in New Hampshire. The campaign is spending more than a million dollars for commercials that will run through the New Hampshire primary on January 27.

With me now from Manchester, Clark campaign spokesman Chris Lehane, Chris Lehane, great to see you.

CHRIS LEHANE, CLARK SPOKESMAN: Thanks, Judy. Thanks for having me.

WOODRUFF: When Wesley Clark got in this race, he was instantly considered the front runner. Today a lot of that has evaporated. What's happened? LEHANE: Well -- I'm sorry -- we're doing very, very well out there. If you look where we are in the national polls, I think two or three polls the last five days shows General Clark in first place. If you look at the February 3 states, South Carolina, Arizona, some of the others, he's in first place.

Now, look, we recognize that we began as underdogs in New Hampshire. People like Dick Gephardt have been out here for decades. Senator Kerry is essentially a third senator of New Hampshire, Governor Dean is the second governor.

But we're really making inroads. The people of New Hampshire are very intrigued by General Clark. They want to learn about him. And they really want to learn about his leadership, his background, and the leadership that he can bring to the White House.

WOODRUFF: Well,you talk about New Hampshire. Let's look at the latest poll out there, Chris. Obviously, the general is not competing in Iowa. Put pressure on him to do well in New Hampshire. And the latest numbers out a few days ago show he's tied for fifth place with Dennis Kucinich. How do you turn that around?

LEHANE: Well we've been out here campaigning for about five or six weeks. We put our first TV ads up today. The other candidates have spent hundreds of thousands of dollars on TV. They've been out here campaigning for a year.

We feel that we're very, very well positioned here, that people of New Hampshire when you travel around, when you go from Main Street to Main Street, from door to door, from town hall to town hall, they fundamentally want someone who's a leader, who can clean up the mess in Iraq and get us back to our domestic priorities.

And General Clark is offering that message. We had a great event this morning at the Politics and Egg Breakfast, which had a capacity crowd, apparently the largest crowd for that event thus far in the campaign season.

And he's just getting an absolutely tremendous response out there. People are very interested in him.

WOODRUFF: Well let me ask you about the ad campaign that you've launched. As you know, a number of the other candidates are running ads that are critical of one another. They don't always mention each other by name, but there's criticism there. At least your initial ads are primarily about General Clark himself and his own record. How do you distinguish him from the other candidates by doing that?

LEHANE: Well, right now, our country faces this enormous challenge in Iraq. We're in a mess. Everyone recognizes that. There's only one candidate in this field who has the experience and background to clean up the mess in Iraq and get us back home. General Clark did this in Kosovo, he did it in the Balkans, all without a loss of a single American life, ended a genocide, brought stability to a region. He's very, very different that other any other candidate in this race because he has actually done that before. And that's a unique space for us. And we're going to be talking about our leadership background, our skills, our commander-in-chief background. And that's what this campaign is about, that's what this first ad is about.

WOODRUFF: So you can keep up with the money lead that, as you said yourself, the other candidates have, particularly Howard Dean.

LEHANE: Well, we're raising money at a tremendous clip. We're on target to out-raise everyone else in this race, this quarter with the exception of Governor Dean.

But, you know, nothing really substitutes in New Hampshire for being here on the ground, allowing the people of New Hampshire to take the measure of the man, look at him in the eye, shake his hand, get a sense of the type of leadership qualities that he will bring to the White House.

So we're going to be here three, four days a week between now and the New Hampshire primary. And every day that goes by we're growing in strength out here.

WOODRUFF: Living in New Hampshire, there are many worse places one could be. Chris Lehane, thanks very much talking to us from Manchester today. Thanks a lot. We'll see you soon.

Well as the race for the White House heats up, campaign finance reform is having a noticeable effect on television ad campaigns. With the political parties barred from accepting soft money, independent groups are now spending millions of dollars spreading their messages on the airwaves.


WOODRUFF (voice-over): A campaign is just an extended audition. And this year, candidates aren't the only ones trying out.

AD ANNOUNCER: The truth is, we're not being led. We're being misled.

WOODRUFF: In this contest, the competitors are a dozen or so interest groups. And the prize is big money. Specifically, the large contributions that used to go to the national parties before campaign finance reform brought down the curtain.

EVAN TRACEY, CAMPAIGN MEDIA ANALYST: What you would expect to see is a number of groups position themselves to take what has been you know, close to so $100 million in the past, absorb that money and then produce soft money issue ads.

WOODRUFF: These groups are vying to prove their mettle as ad makers. And their determination can be measured in dollars. In the past six months, spending on independent issue ads ballooned by a whopping $4 million. TRACEY: Right now what these groups are trying to do is set themselves apart, show they have a track record, show what kind of advertising they're capable and messages that they're capable of delivering.

WOODRUFF: Left-leaning groups have spent the most. From NARAL Pro-Choice America...

AD ANNOUNCER: There's still time to protect your right to choose.

WOODRUFF: ... to the Sierra Club...

AD ANNOUNCER: The bush White House told us it was safe to go back into lower Manhattan when it wasn't.

WOODRUFF: ... to, whose issues have ranged from Iraq spending...

AD ANNOUNCER: We could have insured more of our children. Instead, George Bush Wants to spend that $87 billion in Iraq.

WOODRUFF: ... to Rupert Murdoch.

AD ANNOUNCER: This monopoly is no game.

WOODRUFF: Conservatives are also in the mix.

AD ANNOUNCER: This is Tom Daschle's new $2 million house on Washington's ritzy Foxhall Road. It's a great place to entertain Hollywood liberals.

WOODRUFF: But not as much. It's just not the right time yet.

TRACEY: Republican groups, I don't think at this point feel it's tactically to go into the Democratic primary.

WOODRUFF: So what do these ads have in common? Well, they're generally pretty nasty. Worse than anything a candidate would churn out these days, and it's not even showtime yet.


WOODRUFF: But it's getting there fast.

Madonna takes notice of the race for the White House when we return. We'll tell you which presidential candidate had the singer's ear at a meeting over the weekend at her California mansion.


WOODRUFF: A presidential hopeful meets the Material Girl. There is word today from Wesley Clark's campaign of a meeting between the Democratic candidate and Madonna. Clark's communications director Matt Bennett says Clark and Madonna met for about 40 minutes Sunday at the entertainer's mansion in Los Angeles. Bennett says they talked about the issues and Clark's candidacy. He says the campaign would be delighted if Madonna hosted a fund raiser. But, he said no such event was discussed at the meeting. So we'll see. Watch this space.

That's it for INSIDE POLITICS. I'm Judy Woodruff. "CROSSFIRE" starts right now.


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