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JUDY WOODRUFF'S INSIDE POLITICS

Is There a Workable Exit Strategy For U.S. Troops in Iraq? How will the progress in Iraq affect President Bush's reelection campaign?

Aired January 1, 2004 - 15:30   ET

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

(NEWS BREAK)
ANNOUNCER: New York and the nation sail into 2004 safe and sound. But behind the smiling faces, stepped up security and heightened precautions at the airports.

Violence mark the end of the year in Baghdad. Is an exit strategy at hand?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think they're kind of winging it day by day and you know kind of hoping for the best.

(END VIDEO CLIP)

ANNOUNCER: We'll look at how the progress in Iraq could affect the president's reelection campaign.

Out on the hustings, the Democrats kick off the primary home stretch. We'll map out the next few months in the nominating process.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

CANDY CROWLEY, GUEST HOST: Thanks for joining us on this New Year's Day. I'm Candy Crowley, sitting in for Judy Woodruff.

Putting aside for a moment the heightened terror alert and some of the most stringent security measures in the nation's history, the arrival of 2004 has seemed almost routine. Hundreds of thousands gathered today in California for the annual Rose Parade with no sign that the unusually tight security held down the size of the crowds.

From coast to coast, the New Year arrived without incident. With indoor parties and fire work displays like this one in Seattle, going on as planned. In New York, the site of the largest crowds and the tightest security, Mayor Michael Bloomberg says talk of terrorism fears did not dampen the fun.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK: Last night was just a typical New York event. Your average 750,000 people getting together on a Wednesday night to enjoy themselves and to do it together with virtually no problems whatsoever.

(END VIDEO CLIP)

CROWLEY: Despite the size of relief, the terror alert remains in effect. A day after this British Airways flight from London to Washington received a fighter escort into Dulles airport, the same flight was canceled at the request of the British government. The airline would only say that today's flight was canceled for security reasons.

While festivities went off as planned on the home front, all was not quiet in Iraq as the New Year arrived. A U.S. commander tells CNN there are indications Saddam Hussein loyalists were behind last night's car bombing at a Baghdad restaurant. The blast leveled three buildings and killed eight people according to the U.S. military. The restaurant was popular with Westerners and many had gathered to celebrate the New Year when the blast occurred.

The situation in Iraq poses both military and political challenges for the Bush administration. With me now to discuss the role of U.S. troops in Iraq in the year ahead is our senior Pentagon correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well Candy, the New Year kicks off the new troop rotation plan. Right now the -- about -- more than a third of the Army's active duty troops are on duty in Iraq and over the next couple of months, beginning this month, they'll start to rotate home, being replaced by almost an equal number of new troops, about 130,000 troops in Iraq now. Slightly less than that scheduled to go in and replace them.

But this rotation will place an even greater burden on the National Guard and Reserve troops, which make up about 15 or 20 percent of the force there now but will swell to about 40 percent of the force. That's because the active duty force is stretched so thin. That means that the Guard and Reserve troops will be taking more of the casualties as well and we've already seen a bit of a trend of that in December.

According to The Associated Press, the number of Reserve and Guard troops killed was about 25 percent of the casualties. That's up from about 14 percent at the beginning of the mission. There's two things -- two effects that this have on the Guard and Reserve. One, is it makes harder for them to recruit and retain new troops, because a lot of the troops are just worn out and a little bit disillusioned about what they signed up for.

The other problem is the Army has put a stop order in, preventing active some duty troops from retiring. That's a source of recruiting for the Guard and Reserves. So they're going to feel a real strain over this next year and it's going to put a lot of pressure on the Bush administration to wrap things up in Iraq and try to bring those troops home -- Candy.

CROWLEY: Jamie, so it just sounds like the answer might be just a bigger military.

MCINTYRE: Well a lot of critics in Congress have been calling for that. And they insist the Pentagon is in denial over the size of the U.S. military, given its commitments. But the Pentagon makes the argument that if it were to increase the size of the military, it would be very expensive. It would take a number of years, and by the time they got the extra troops, they might not actually need them.

And then they'd have to spend money that they wouldn't able to spend on other things to modernize the force. What other people say, insist the solution is, for the U.S. to do a better job in convincing other countries to contribute troops and, also, they're concerned that the Pentagon's relying too much on this idea of training the Iraqis to take over the mission themselves. There's a lot they can do, but those troops are poorly trained and poorly equipped and they've got a long way to go before they can take over the mission.

CROWLEY: Our senior Pentagon correspondent, Jamie McIntyre. A gold star from us for joining us today. Thanks, Jamie.

MCINTYRE: You're welcome.

CROWLEY: With an election looming, the question of when to start withdrawing U.S. troops from Iraq is fraught with political peril for this White House.

CNN's John King has more on the political stakes involved in winning the peace.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Laying out an exit strategy for Iraq will be a key challenge in the campaign year, just ahead.

JOHN PODESTA, FORMER CLINTON CHIEF OF STAFF: I think that the president really hasn't explained any strategy in terms of the long run. I think they're kind of winging it day by day and you know kind of hoping for the best.

KING (voice-over): The administration hopes to reduce the number of U.S. troops in Iraq over the course of the election year, but there are no guarantees.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: His decision making is going to be based upon those recommendations by military commanders, not by politics.

KING: A certain Democratic campaign theme will be that while Mr. Bush won the war, he has lost the peace.

PETER HART, DEMOCRATIC POLLSTER: Too many American soldiers killed or wounded. The public is uncertain about the price that we're paying for this war.

KING: Allies of the president concede the price of war in both lives and money, will be a sensitive campaign issue.

BILL MCINTURFF, REPUBLICAN POLLSTER: The American electorates demonstrated a certain limited tolerance for how much money they want to spend in Iraq. I think that they're very clear they want us to find a way out of that country.

KING: The president says he cannot say when U.S. troops will leave Iraq because so many questions are yet to be answered including the pace of training a new Iraqi army.

LAWRENCE EAGLEBURGER, FORMER SECRETARY OF STATE: I think there needs to be more of that telling the American people why we're there and why we have to stay there until it's done right.

KING: To Democrats, done right, would mean more international help instead of an overwhelmingly American military force in Iraq.

MCINTURFF: I think it's a debate George Bush can win and should win for this country's stability, but that's, you know, that's why God made campaigns and that's why they'll be front and center of the 2004 campaign.

KING (on camera): Mr. Bush will likely have the advantage if security in Iraq improves and U.S. troop levels begin to drop in the New Year. If not, an exit strategy for Iraq could become a contiguous campaign debating point.

John King, CNN, New York.

(END VIDEOTAPE)

CROWLEY: President Bush spent the New Year's holiday quail hunting in south Texas. On his way, the president greeted onlookers at a small airport with Happy New Year to you, his first words in public since December 22 when he talked about the terror alert following a White House Hanukkah ceremony.

Also on the hunting trip, Mr. Bush's father, the former president, and James Baker. Baker has just returned from a trip to world capitals at the president's request, asking countries to forgive Iraq's debt.

Most of President Bush's Democratic rivals are spending a quiet holiday with no public events. There are some exceptions. In New Hampshire, Wesley Clark is meeting with first responders today. He attends a house party this evening in Concord.

Joe Lieberman and his wife are also spending the day campaigning in New Hampshire and they'll attend a house party tonight in Manchester.

More news about the presidential race in "Campaign News Daily". The Democratic race has turned negative of late, but DNC Chairman Terry McAuliffe says his party will be able to unite once a nominee is chosen. McAuliffe tells "The New York Times" the Democratic hopefuls will come together because in his words -- quote -- "there is a visceral dislike of George Bush and it's going to bring these guys together."

Howard Dean has broken his own record for Democratic fund- raising. The Dean campaign topped $15 million by midnight, breaking Dean's own single quarter fund-raising record, which he set in the third quarter.

It looks like John Edwards won't be on the ballot in the Rhode Island Democratic primary. The Rhode Island secretary of state has ruled Edwards ineligible because he fell 27 votes short of the required 1,000 valid signatures to get on the ballot. The Edwards campaign plans to appeal.

The holiday won't stop the campaigning for long. Coming up, Donna Brazile and Bay Buchanan join us for a look at who may be stumbling and who is just hitting their stride as 2004 finally arrives.

Also, the upcoming glut of primaries and caucuses. Bruce Morton looks down the list at the possible outcomes.

We'll also meet some of the people who live, eat, sleep and do the grunt work of political campaigns. Foot soldiers and true believers as INSIDE POLITICS continues.

(COMMERCIAL BREAK)

CROWLEY: You can see the Democrats who are competing in the Iowa caucuses on CNN this coming Saturday afternoon. We plan live coverage of a debate sponsored by "The Des Moines Register" beginning at 3:00 Eastern.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

CROWLEY: The Howard Dean and John Kerry campaigns are sniping about who is the best friend to Iowa's farmers. The Dean camp borrowed a tactic from Al Gore's 2000 campaign when Gore found an Iowa farmer to attack Bill Bradley's vote on a 1993 flood relief package. The same farmer is a Dean supporter this time around and is attacking John Kerry's vote on the same bill. The Kerry camp says the Dean team has it wrong. The two sides are pointing to separate votes on different amendments to the same bill to make their case.

Despite Howard Dean's arguments with his Democratic rivals or perhaps because of them, he is the Democratic frontrunner. But Dean's off the cuff remarks continue to get him into...

(AUDIO GAP)

... Donna Brazile and Bay Buchanan and began by asking Donna what's going on with Dean.

(BEGIN VIDEOTAPE)

DONNA BRAZILE, CHAIRWOMAN, DNC'S VOTING RIGHTS INSTITUTE: Well, I think the Dean campaign experienced just a little bit of fatigue in the last weeks of December. He started getting beaten up by his rivals. It was a one-two sucker punch, a knock here in the belly and Dean complained. That's not the right posture for the presumed frontrunner of the Democratic race. Dean needs to go back on offense.

He needs to once again demonstrate to the party that he is the leader that can stand toe to toe with George Bush next year and stop complaining and play offense. Get back on his message and he'll regain his footing.

CROWLEY: No whining.

BAY BUCHANAN, PRES., AMERICAN CAUSE: Absolutely no whining. Donna's absolutely correct. The man is the frontrunner. He's running strong, got lots of money there. He's three weeks out from Iowa, four weeks out from New Hampshire. He should have a message. He should be on that message, should be disciplined and focused and not paying attention to what other people are saying.

He demonstrates to me a real vulnerability here. He shows inexperience in the national political scene that he would respond to these silly little criticisms. And I think that he is making the kind of mistakes, Candy, that will come back to haunt him, not in a primary, but they're going to be used against him in the general election.

CROWLEY: Well, in fact, at a conference call, one of his rivals said look, you don't think Karl Rove is just sitting there taking notes? I mean, do you think that it's, "A", the criticism is fair. And "B", should they be doing it?

BRAZILE: I think some of the criticism has gone right up to the line, but not over the line. I think the criticism on his foreign policy credentials, comparing him, using the footage of Osama bin Laden went over the line.

CROWLEY: But that wasn't any of his rivals to be fair...

(CROSSTALK)

BRAZILE: That is correct, I understand. But they should have denounced it -- the party should have denounced it, because we denounced it last year when the Republicans did it against Max Cleland in Georgia. I do have a belief that his record is fair play, like the record of his opponents is fair play. He's criticized congressional Democrats, he's criticized his rival and you know what, he should just take it. Take it like a man...

BUCHANAN: Exactly, like a man...

BRAZILE: ... and hit back. That's something that Howard Dean has been known for these last couple of months. He's been hitting hard.

CROWLEY: But this is no shrinking violet, right?

(CROSSTALK)

BUCHANAN: The man is an angry man. Not only did he show that he's angry at Bush and did very well by that anger. He's now angry at all his opponents. I think he's probably angry at you, Donna (UNINTELLIGIBLE) didn't surprise me. He's got to change this whole persona if he wants to win an election against George Bush.

He has got to start becoming positive and say what he's going to do instead of being involved in all of this. His mistakes in the last week, and he's talking about -- well I guess it was last month, Saddam Hussein now, Osama bin Laden. This stuff is going to be used against him, along with Lieberman's words that he is going to take this party way out into the desert and...

BRAZILE: But he's not going to take the party out, because the party is not going to go out in the desert. The party's going back into the main stream. And if it's Dean or Clark or Gephardt or whoever that's where the party's going to hit. Howard Dean is not going to take the party someplace the party does not want to go.

And the fact is Karl Rove should be happy today that Howard Dean's rivals are beating him up and not focusing on the president where they should be focusing their message...

UNIDENTIFIED FEMALE: Donna...

BRAZILE: ... talking to Democratic voters, and talking about what George Bush has done wrong. He's not produced jobs. He's not been able to...

UNIDENTIFIED FEMALE: I...

BRAZILE: ... keep all his campaign promises. He didn't keep...

BUCHANAN: But listen to what your Democrats are saying about him. They say he's not up to the task of being commander-in-chief in a time of national security crisis. These are words that Karl Rove didn't have to say one thing. They just listen to the Democrats. He -- as a result of who he is, head of the party on your ticket in November, he'll be harmful because people will feel the Democrats don't have it in them to take this country where it needs to go when it comes to securing the nation.

CROWLEY: These aren't policy sort of practical matters. These are you aren't up to the job sort of complaints...

UNIDENTIFIED FEMALE: Exactly.

CROWLEY: ... which don't -- those hurt more than I don't like your policy.

BRAZILE: And I totally disagree. I think any Democrat is up to the job of being commander-in-chief and keeping America safe and secure and protecting America in the 21st century. So I disagree with anyone who says that Howard Dean isn't up to the task. I think Howard Dean is up to the task. Likewise, John Edwards and all of the rest are up to the task. I think that's just baloney and that's what we call in the Democratic Party horse play. We've had too much of that in the last couple of months and it's time that the party unify, come up with a strong messenger and to rally behind the nominee, whoever he may be or she may be by November.

BUCHANAN: She sounds like Al Gore, doesn't she?

BRAZILE: Well...

BUCHANAN: Dean needs to hire her.

(CROSSTALK)

CROWLEY: I want to give you all a quick question here, and then we're going to take a break. Favorite political story of the year?

BUCHANAN: There's no question it's the recall in California, which was overlooked by Schwarzenegger entering the race. It was a great story out there in California.

BRAZILE: I still think the big story on the Democratic side is Howard Dean and the fact that he has recaptured Democratic voters, brought new people into the process and he is taking on the Washington establishment. So Howard Dean is the story of the year and the Democratic Party.

(CROSSTALK)

(END VIDEOTAPE)

CROWLEY: We will have more from Donna and Bay later on.

First to Iowa, followed by New Hampshire and then the flood gates open. Here's Bruce Morton with more on the primary lineup and what all the candidates are hoping to grab first -- momentum.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Let the games begin. Iowa caucuses, January 19. Polls show Dick Gephardt and Howard Dean close. Gephardt won here in 1988. If he doesn't win here this time is he toast? Could be. Dean can be a close second and not be heard. Kerry, maybe third, like Michael Dukakis in 1988, but Dukakis went on to win New Hampshire.

January 27, this time, polls show Dean way ahead of Kerry there. Third in Iowa and a bad second in New Hampshire. That could be it for Kerry. No more future than a lobster on a dinner plate. If Dean wins big, he goes on with what the first President Bush called "Big Mo", Mr. Momentum, that is. But Mo's a tricky fellow. Seven states vote or caucus February 3.

Lots of attention in South Carolina. John Edwards was born there. And if he could win there, he might stay alive. If not, probably not. Kerry announced there, but they haven't seen him since. Al Sharpton, half the voters may be black. Jesse Jackson did well in the South when he ran, but he's from the South.

Will Sharpton's snappy New York one-liners work as well? Lots of veterans and military bases a chance for Wesley Clark, the general, or do you need a moon pie and not a Clark bar in the South. Other states, Arizona, Hispanic population, along with New Mexico, Missouri, will Gephardt still be around?

Joe Lieberman has to win here somewhere or folks will forget who he is. That's L-I-E -- remember now. If "Big Mo" stays with hot Howard, it could all end that week. If not, onward, Michigan, first big labor state, caucuses February 7. Virginia and Tennessee vote on the 10th. And if it last that long, a whole slew of states, California, Connecticut, Georgia, Maryland, Massachusetts, New York, Ohio, Rhode Island, Vermont vote March 2. If that mob doesn't produce a nominee, somebody's stacking the deck.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: The nitty and gritty of the campaign trail. Up close and personal with staffers who spend virtually every minute of every day trying to get their candidate elected. That's next on INSIDE POLITICS.

(COMMERCIAL BREAK)

CROWLEY: Summer camp might be the best way to sum up what it's like to be working 24/7 for a political campaign.

CNN's Yangi Denise (ph) spoke with some campaign campers in New Hampshire.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: My bed is here, clothes. This is where I live.

UNIDENTIFIED REPORTER: Mark Barrynoff (ph) works for Howard Dean, the Internet innovator, mobilizing Gen X and Gen Y. He lives with a family which supports Dean by giving Barrynoff (ph) a place to sleep.

UNIDENTIFIED MALE: We asked what we could do and Mark was what they told us we could do.

(LAUGHTER)

UNIDENTIFIED MALE: Mark is in many ways is like our son.

UNIDENTIFIED REPORTER: Kate Murphy is a staffer for John Kerry, Massachusetts senator for the last 19 years. She lives alone.

VOICE OF KATE MURPHY, KERRY CAMPAIGN WORKER: Sometimes I just get up and roll into work.

UNIDENTIFIED REPORTER: So you don't really even live here?

MURPHY: No.

UNIDENTIFIED REPORTER: Where did do you live?

MURPHY: In the office. In the office, yes.

(CROSSTALK)

UNIDENTIFIED REPORTER: Debra Nauer (ph), Kate Levine (ph) and Benjamin Eichert live in a co-op together. They want the peace candidate, Congressman Dennis Kucinich, to be the next president.

VOICE OF BENJAMIN EICHERT, KUCINICH CAMPAIGN WORKER: This co-op and this campaign is like a microcosm of that democracy. Everyone's cool? Have him come up? All right.

UNIDENTIFIED FEMALE: What's this?

EICHERT: Just putting in your consensus and yes, I agree.

UNIDENTIFIED FEMALE: But I (UNINTELLIGIBLE).

UNIDENTIFIED REPORTER: Did everyone tell you not to work for Dean, that he'll never make it?

UNIDENTIFIED MALE: Pretty much all my friends before I left D.C. They said see you in a month. I'm a part of something that's bigger than me and that's a great feeling. I'm changing the country.

UNIDENTIFIED MALE: Hey Saddam, here's a weapon of mass destruction.

(SOUNDS)

(LAUGHTER)

UNIDENTIFIED FEMALE: These were our softball T-shirts. I don't know if you heard, but we won the softball game against all the other campaigns.

UNIDENTIFIED FEMALE: Everything you know exists around the Kerry campaign. So it's sort of like camp -- summer camp.

UNIDENTIFIED REPORTER: You want to turn the White House into a co-op?

EICHERT: Absolutely. That would be great, wouldn't it? That would be so cool.

UNIDENTIFIED FEMALE: It's totally gooey. People have worked together for a common cause for a long time.

UNIDENTIFIED REPORTER: Cooperation, she says, is not a radical idea.

Yangi Denise (ph), CNN, Manchester, New Hampshire.

(END VIDEOTAPE)

CROWLEY: President Bush has been fund raising, but so far has stayed above the political fray for the most part. Coming up, how long until the president engages now that 2004 has finally arrived?

Donna Brazile and Bay Buchanan will be back for another round this time focusing on some of Howard Dean's current and possibly future opponents.

And Bill Schneider isn't quite done with 2003. Still ahead, his top political plays of the year.

(COMMERCIAL BREAK)

ANNOUNCER: President Bush heads into his reelection year. Will the candidate in chief hit the campaign trail or spend most of the year in the Rose Garden?

The Democrats begin their sprint.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Health insurance.

UNIDENTIFIED MALE: A universal pension.

UNIDENTIFIED MALE: Job loss.

UNIDENTIFIED MALE: So right wing.

UNIDENTIFIED MALE: Democratic values.

UNIDENTIFIED FEMALE: Get our economic house in order.

(END VIDEO CLIP)

ANNOUNCER: Time for a little home stretch hard ball after an unusually nasty pregame year. We'll look back and ahead.

And we close the book on 2003 with...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Top five political plays of 2003.

(END VIDEO CLIP)

ANNOUNCER: Bill Schneider reveals his picks for the best of the best.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS. CROWLEY: Happy New Year from all of us at INSIDE POLITICS and welcome back to this New Year's Day edition of INSIDE POLITICS. I'm Candy Crowley. Judy Woodruff is off today.

We want to continue now with an earlier conversation we had with Donna Brazile and Bay Buchanan. We turn our attention this time to the first in the nation caucuses coming up in Iowa in less than three weeks. I asked Donna about the tight race, the Democratic race in the Hawkeye State.

(BEGIN VIDEOTAPE)

BRAZILE: I think the undecided are breaking right now. It's still a three-person race with Dick Gephardt bringing in the traditional caucus goers. Howard Dean bringing in new forces and John Kerry is going to take up everything that's left on the table.

BUCHANAN: What happened to Clark? Clark's looking strong these last couple of days...

BRAZILE: Well, he's -- but he's not campaigning in Iowa.

BUCHANAN: Well fair enough. In Iowa, he's not, and a huge mistake...

BRAZILE: Right.

BUCHANAN: ... on his part in my opinion.

BRAZILE: I agree.

BUCHANAN: I think Iowa is an interesting state, Candy. You've spent a lot of time out there, so have I, so has Donna. And I think that Dean is obviously clearly the frontrunner. He's got big crowds when he goes to speak, which is an indication that they will also go to the caucuses. But you got somebody like a Kerry, not so much even more so Gephardt, they are capable of bringing people that are under the radar screen, not showing up in your polls that will show up in large numbers. And that's the name of the game. If he can get more of his people there than Dean, he could...

(CROSSTALK)

BUCHANAN: ... it could be a major upset out there.

BRAZILE: But remember, Dean doesn't have to win the Iowa caucuses. Gephardt must win.

BUCHANAN: Yes...

(CROSSTALK)

BUCHANAN: ... absolutely true.

CROWLEY: ... doesn't he slow it down though? I mean if Gephardt pulls this out...

BRAZILE: Right.

CROWLEY: ... in Iowa, no longer will we say yes but it wasn't a big enough win. We'll go holy cow, Gephardt pulled that out in Iowa...

BRAZILE: Right.

CROWLEY: ... and Dean lost.

BUCHANAN: And I'll tell you...

(CROSSTALK)

BUCHANAN: ... is you put him on the ropes, Dean is not experienced, as we talked about earlier. He makes mistakes even when there is no pressure. You put pressure on that campaign and we've all seen it. That's when you lose. It's not what the other guy did but how you respond to it. I think he could make a lot of mistakes going into New Hampshire and you could see Clark surface as well as Gephardt...

BRAZILE: ... New Hampshire is an interesting piece because you have John Kerry, the resurgent. The candidate who didn't catch on in 2003 may catch fire for a couple of days in 2004. And if so, you have a Kerry/Clark situation you know bailing now for second place in New Hampshire. And you still have Howard Dean in place. So Howard Dean no matter how you look at the equation, he's part of the calculus.

CROWLEY: Sure, but can John Kerry survive a loss in New Hampshire?

BRAZILE: No.

BUCHANAN: No.

(CROSSTALK)

BUCHANAN: In fact, I don't know if he can survive the next week. I mean he's not raising any money whatsoever. That is an indication to everyone out there...

BRAZILE: He's borrowing money against his house and his future...

BUCHANAN: But you know as well as I do the words of his people is he's not making it. And in the last couple weeks before a primary or a caucus people want to go with somebody who most likely will win or at least has a chance. I think he'll start...

BRAZILE: This is a decorated fighter.

BUCHANAN: ... dropping.

BRAZILE: He will throw out the arsenal before he goes down...

BUCHANAN: And I think you're going to see his numbers dropping.

BRAZILE: I know John Kerry. John Kerry is tough and he is going to throw out the arsenal.

(CROSSTALK)

BRAZILE: ... I would tell Howard Dean and Dick Gephardt and Wesley Clark, be careful. This guy knows how to fight.

BUCHANAN: I think if his numbers start dropping they could go to Clark and you could really have a horse race up there...

BRAZILE: I agree with you on that.

BUCHANAN: ... in New Hampshire. But if Dean wins big in Iowa, I think this is his to lose...

CROWLEY: Can I bring Bush into the mix real quickly and just where...

BRAZILE: Bush?

CROWLEY: ... George Bush, he's the President. I know how you feel about that, Donna.

(CROSSTALK)

BUCHANAN: ... in the corner Donna...

BRAZILE: I totally forgot. I thought we had already replaced him.

(LAUGHTER)

BRAZILE: We got another year.

CROWLEY: So, where does he -- where is he standing right now? To me, just to throw this out this is a president who is really tied to outside events.

BUCHANAN: He is so strong right now. You're right, tied to outside events, but they're going all his way. I think that -- I don't know how he could be better positioned right now, to be quite honest. He had -- the war was a huge success, obviously and then things didn't go quite as well. Now he's got Saddam Hussein. Things are looking better over there. Anything can happen, obviously.

But I think that's to his -- he wins national security issue. The economy came in very, very strong in the third quarter, continues to look good. That took two aces out of a deck of two aces. Two big issues in the game are his to win on. I don't know how you beat him at this stage.

BRAZILE: He had two good quarters and two bad quarters this past year. He ended up the year with a good quarter. He had a bounce in his national poll numbers, favorability. The stock market is coming back. But his stock with voters who have lost their jobs, his stock with people who want a clean environment, his stock with so many Americans, I believe is still down in the dumps and that will give Democrats a fighting chance to regain the White House in 2004.

BUCHANAN: I've seen numbers where he is not only 90 percent of Republicans or almost 90 percent, he's got 60 percent of Independents, 30 percent of Democrats. A lot of Democrats out there are looking, saying they want somebody to make certain they secure this nation.

BRAZILE: And his daddy was just as strong going into the 1992 race and look what happened. Bill Clinton, an unknown little governor from a small state came and took him, you know...

BUCHANAN: You think Howard Dean can do that...

(CROSSTALK)

BUCHANAN: ... Donna? I don't think so.

CROWLEY: I feel like we should sing Auld Lang Syne here, but real quick, your best advice to whoever wins the Democratic nomination to beat George Bush.

BUCHANAN: Get a message. I think the jobs is their best message and stay to it and be focused and disciplined and that's something they're not today.

(CROSSTALK)

CROWLEY: Donna, your best -- no, no, no, you have to give me your best advice for President Bush to beat the Democrat.

BRAZILE: Oh, my God, I have to be a traitor.

(CROSSTALK)

CROWLEY: I asked Bay to do it.

BRAZILE: Well...

(CROSSTALK)

BRAZILE: ... my best advice to the Republicans, get rid of Tom DeLay. I think if Tom DeLay becomes the pitch of the party, it will hurt the president. The president is the pitch of the party. He's the person that people believe can unify the Republican Party and unify the country. Get rid of someone like Tom DeLay.

CROWLEY: Donna Brazile, Bay Buchanan, Happy New Year. Thanks for joining us.

(CROSSTALK)

CROWLEY: We'll see you in the next year.

BRAZILE: Thank you.

(CROSSTALK)

BRAZILE: Thank you.

(END VIDEOTAPE)

CROWLEY: President Bush spent most of his New Year's Day hunting with his father and James Baker. He also spent a little time talking with reporters. We'll have that later on.

Also, who scored the biggest political play of the year? Bill Schneider's pick is still ahead.

Also coming up, the nation's chief justice has a bone to pick with Congress.

(COMMERCIAL BREAK)

CROWLEY: Checking our second edition of "Campaign News Daily" on this holiday. John Kerry is among the Democrats criticizing a new TV ad running in Iowa. Kerry says the ads, which argue against an increase in the number of immigrant workers, are designed to - quote -- "turn Iowans against each other." Labor leaders have also criticized the ads which are paid for by a group called the Coalition for the Future of the American Worker.

Bowl games fill the TV dial on this New Year's Day and two of the presidential hopefuls are catching the sports bug as well. Before heading to that house party in New Hampshire we told you about, Joe Lieberman planned several stops this afternoon at sports bars to campaign with college football fans. Tomorrow, John Kerry plans to hit the ice and join a hockey team with his New Hampshire supporters at a rink in Hookstead (ph).

Last year, which of course was only yesterday, Bill Schneider began counting down the top political plays of 2003. To paraphrase Harry Truman, the suspense stops here. It's time for the top of the list.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (on camera): Happy election year!

(SOUNDS)

SCHNEIDER: But before we ring in the new, let's ring out the old. The top five political plays of 2003.

(voice-over): Play number five, the AARP joins forces with the GOP.

SEN. BILL FRIST (R), MAJORITY LEADER: People, it was a big surprise the AARP came out and endorsed us.

SCHNEIDER: The result, a Medicare reform bill including, for the first time, prescription drug coverage.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Bill Novelli, the CEO of AARP stood strong in representing the people he was supposed to represent and worked hard to get this legislation passed.

SCHNEIDER: Some seniors are suspicious of the reforms and critical of AARP's endorsement. But the Bush administration can claim a breakthrough. It pried an important new ally away from the Democrats and passed a new entitlement for the first time under a Republican president.

Play number four, Hillary writes a book. And it becomes a worldwide best seller. Conservatives were skeptical.

TUCKER CARLSON, CO-HOST, "CROSSFIRE": ... they will never get their eight million back. I salute her for getting the $8 million, but if they make $8 million on that book, I will eat my shoe.

SCHNEIDER: Senator Clinton's book sells more than a million copies in one month, forcing conservatives to eat their words.

(APPLAUSE)

UNIDENTIFIED MALE: I'll be...

SEN. HILLARY CLINTON (D), NEW YORK: Now, I really want you to notice, Tucker that this is a wing tip. It's a right wing tip.

(LAUGHTER)

SCHNEIDER: Senator Clinton is the toast of the Democratic Party, even upstaging the presidential candidates in Iowa. No, she insists, she's not running in 2004. But if President Bush gets reelected, and 2008 is wide open it couldn't hurt for her to show up in Afghanistan and Iraq.

Play number three, Thanksgiving trumps top gun. President Bush's top gun landing on an aircraft carrier under a banner that said "Mission Accomplished" was becoming an ironic joke. More Americans got killed in Iraq after that famous photo op than before. The president needed a new photo op. So in a carefully planned, deftly executed maneuver, President Bush showed up in Baghdad to have Thanksgiving dinner with the troops.

BUSH: I bring a message on behalf of America. We thank you for your service. We're proud of you. And America stands solidly behind you.

(APPLAUSE)

SCHNEIDER: The president rallied the public as well as the troops. Two weeks later, the payoff.

PAUL BREMER, U.S. ADMINISTRATOR IN IRAQ: Ladies and gentlemen, we got him! SCHNEIDER: Saddam in captivity. Suddenly, the war turned from a political liability to a political asset for President Bush, at least for now. And a big political problem for the Democrats who were betting on anti-war sentiment to bring them back to power.

Play number two, Howard Dean wins the invisible primary. That's the race for money and poll standings the year before the campaign actually begins. Polls standings, Dean has surged into the lead. Money? Dean's raised enough to allow him to turn down public financing. He's done it with small contributions. The first candidate to exploit fully the power of the Internet. Dean's objective is to match President Bush's likely total, $200 million.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: The way we're going to beat George Bush is we're going to get two million people to give us a $100 apiece. I think there are two million people out there who would gladly part with the price of a one-way bus ticket from the White House to Crawford, Texas.

SCHNEIDER: What's the payoff for winning the invisible primary? Every contender who has started the primary season with more money and higher poll standings than his rivals has ultimately won the nomination.

And now, the political play of the year! "The Terminator" becomes the governator. Arnold Schwarzenegger appears on NBC's "Tonight Show" to make an announcement that electrifies American politics.

UNIDENTIFIED MALE: I'm going to run for governor of the state of California.

(APPLAUSE)

(CHEERING)

SCHNEIDER: As a Republican, but Schwarzenegger's no right winger. He's married to a Kennedy. Schwarzenegger played up his outsider image.

UNIDENTIFIED MALE: I will pump up Sacramento...

(APPLAUSE)

UNIDENTIFIED MALE: Arnold, thank you buddy.

SCHNEIDER: The Democrats threw everything they had at him.

BILL CLINTON, FORMER PRESIDENT: Don't do this. Don't do this.

SCHNEIDER: Women came forward to charge Schwarzenegger with sexual harassment, but the timing of the charges made the voters suspicious. They saw them as politically motivated. In the end, Schwarzenegger accomplished a political miracle. In a field of 135 candidates, Schwarzenegger ended up with more votes than Governor Gray Davis. ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOVERNOR-ELECT: I will not fail you. I will not disappoint you, and I will not let you down.

(APPLAUSE)

SCHNEIDER (on camera): 2003 was a year of unexpected triumphs for two familiar names. Democrat Hillary Clinton and Republican George W. Bush. And for two new names, Democrat Howard Dean, and Republican Arnold Schwarzenegger. That's the rule in American politics. Expect the unexpected.

Bill Schneider, CNN, Los Angeles.

(END VIDEOTAPE)

CROWLEY: His first public words of 2004, the president of the United States has been talking to reporters in Texas. Now you and I are going to hear it too.

(BEGIN VIDEOTAPE)

QUESTION: (UNINTELLIGIBLE)

BUSH: ... everybody a Happy New Year. A good way to start the new year, outdoors, in my case with my dad. And you know, I know this part of Texas real well. Spectacular part of our state, and we were just on a ranch with -- owned by a lady who knows it's important to protect the environment by taking care of the land, and as a result of her taking care of the land, worrying about bird habitats we happened to see a lot of birds today.

But most importantly, I was with my dad. It's a great way to start 2004. I'm looking forward to 2004. I'm going to continue to stay focused on our economy so people can find work and stay focused on working to keep the peace. And by spreading freedom and by holding people to account who are willing to harm innocent people around the world.

But it's -- I think 2004 is going to be a great year. And in the spirit of great years I'll answer a few questions.

QUESTION: (UNINTELLIGIBLE)

BUSH: It was good fun. You know when you hunt quail, you get a lot of exercise. As you know, I like exercise and so my dad and I and Ms. Nagele (ph), whose ranch we were on, walked a lot of territory, watched the dogs work and knocked down some birds.

QUESTION: How many?

BUSH: I think I shot five. The limit in Texas, I believe, is 15. Not that good a shot, but it was a lot of fun.

QUESTION: (UNINTELLIGIBLE)

BUSH: Pardon me? QUESTION: Did you talk to Secretary Baker?

BUSH: I did talk to Secretary Baker. He came by for lunch. First, I thanked him for spending as much time as he did on the road for our country. As you know, he went to Europe first and then recently went to the Far East. He reported on his visits with Prime Minister Coy Zoomi (ph) and President Hu Jintao and he was very positive about his meetings. He's going to come back up and brief Condi and me in a little bit of time. Yes ma'am.

QUESTION: (UNINTELLIGIBLE)

BUSH: Where is he going next? He's yet to go to the Middle East and he's going to let me know when he thinks the timing is good for that.

QUESTION: (UNINTELLIGIBLE) what you did for Iran in terms of the easing (UNINTELLIGIBLE)...

BUSH: Yes.

QUESTION: ... does this represent an easing of our relationship...

BUSH: No,, what we're doing in Iran is we're showing the Iranian people the American people care, that we've got great compassion for human suffering and I ease restrictions in order to be able to get humanitarian aid into the country. The Iranian government must listen to the voices of those who long for freedom, must turn over al Qaeda that are in their custody, and must abandon their nuclear weapons program.

In the meantime, you know, we appreciate the fact the Iranian government is willing to allow our humanitarian aid flights into their country, and it's a good thing to do. It's right to take care of people when they hurt and we're doing that.

QUESTION: Do you see any signs that the Iranian government is doing any of the things that could lead to a stronger relationship...

BUSH: My hope is, is that they will hand over al Qaeda to their countries of origin, that they will get rid of their nuclear weapons program in a verifiable way, that they will listen to the IAEA and the United Nations and get rid of the programs they said that they're willing to do. And as well, it's very important for them to listen to those voices in their country who are demanding freedom. And we stand strongly with those who demand freedom. Yes, Mark.

QUESTION: Mr. President, how worried are you about the attempts on the life of President Musharraf and what does it mean for the security of Pakistan's nuclear weapons?

BUSH: Well I appreciated talking to President Musharraf. I told him how much I was hopeful that, you know, that he continued to join us in the war on terror. Obviously, terrorists are after him. And he sounded very confident that his security forces would be able to deal with the threat. President Musharraf has been a friend of the United States. He's been a stand-up guy when it comes to dealing with the terrorists. We're making progress against al Qaeda because of his cooperation. We need to do more, particularly on the Pakistan-Afghan border. But, you know, I'm -- he sounded confident and therefore I feel confident about his security situation.

QUESTION: And what about Pakistan's nuclear weapons. Are they...

BUSH: Yes, they are secure. He's -- and that's important. It's also important that India, as well, have a secure nuclear weapons program. We're hopeful that the Indians and the Pakistanis in upcoming meetings will be able to begin a dialogue and -- on a variety of issues. It looks like they're making progress towards reconciling differences. Slowly but surely, positive things are taking place, and I commend the leaders of both countries for taking steps toward a peaceful reconciliation of major issues that have divided them.

QUESTION: Mr. President, did Attorney General Ashcroft take too long to recuse himself in the leak investigation?

BUSH: Did he take too long?

QUESTION: Why did he take so long?

BUSH: Oh I think that you know you're going to have to ask him. I mean, I don't know the details which caused him to recuse himself. That's up to people inside of D.C. to tell you what's going on with the case. He doesn't talk to me about it. He doesn't brief me on it.

(CROSSTALK)

BUSH: My only point is, is that I'd like to find out the truth as quickly as possible and...

QUESTION: (UNINTELLIGIBLE) taking as long as it is?

BUSH: I just -- you know I'm not involved with the investigation in any way, shape or form. I've told the members of the White House to totally cooperate. I think you'll find that there has been total cooperation. And the Justice Department and the investigative team which, by the way, is a team comprised of professionals who have done this in the past, will proceed at a pace necessary to find out the truth. And the sooner they find out the truth, the better, as far as I'm concerned. Last question, then we've got to go back to Crawford.

QUESTION: (UNINTELLIGIBLE)

BUSH: Did we do what?

QUESTION: (UNINTELLIGIBLE)

BUSH: Well I've talked to Secretary Veneman about this issue. I told her that I want her to take the steps necessary to make sure that the food supply is safe and that the American consumer can be confident. And she is looking at different ways to do that. As a matter of fact, she announced some measures the other day.

QUESTION: (UNINTELLIGIBLE)

BUSH: I think they should be. As a matter of fact, I ate beef today and will continue to eat beef.

Thank you all very much.

QUESTION: (UNINTELLIGIBLE)

(CROSSTALK)

BUSH: Thank you.

QUESTION: (UNINTELLIGIBLE)

BUSH: My New Year's resolution this year is to work -- stay physically fit to the point where I can run. I'm going to rehab my knee. I miss running. The elliptical machine is good, but it just doesn't have that same sense that running gave me. And so that's one of my resolutions, which may require eating less desserts, kind of getting a little trimmer to take the pressure off the knee.

I wish everybody a Happy New Year and 2004 is going to be a great year for this country. It's going to be a year in which the world will become more peaceful and more people will be able to find work, and that's important. Thank you all.

QUESTION: (UNINTELLIGIBLE)

(END VIDEOTAPE)

CROWLEY: President of the United States having finished up a day of quail hunting with his father and former Treasury Secretary James Baker, who has also been on a trip to the Middle East.

We're joined now by Suzanne Malveaux in Crawford, where the president's now headed or has arrived or is going. You know Suzanne, here's what struck me, is he started out talking about the economy and peace and he ended up talking about the economy and peace. And I'm thinking we sort of heard the campaign subjects.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You definitely have Candy. It's all about the economy and, of course, the war on terror. What was striking to me, the fact that so many of these topics, these questions dealt with his international policies, security and really very much how President Bush's own success or failures are linked to the fate of other leaders. We're talking about those who are willing to forgive Iraqi debt, they're also talking about Iran and its willingness to give up its own nuclear weapons program and finally, the fate of Pakistan's Musharraf and what happens to his own nuclear weapons program if that gets in the hands of the wrong people, just how stable that country is going to be, if, in fact, Musharraf, if they get to him and he is successfully assassinated.

All of these leaders, of course, playing a very critical role in President Bush's own success in his war on terror. I want you to notice, however, President Bush has been saying for some time that politics comes in its own due course. But if you take a look at the pictures that we saw today, really, a picture's worth a thousand words here. You're looking at a man who is shaking hands. He is also kissing babies as well. Certainly looks like he is politicking on the first day of this New Year. He has gone to at least 50 fund raisers that he's headlined and raised about $120 million for his campaign. This is really going to start off and only intensify in the months to come, Candy.

CROWLEY: I think we're probably in that point where it's going to be hard to tell governance from politics. It gets more and more that way as the year goes on. Listen, what sort of strategy do you think the Bush White House is testing out at this point?

MALVEAUX: Well, what's really revealing is a letter that the president sent just yesterday to his party faithful, to the supporters, where essentially he talks about how he is going to be the positive candidate and the person that he is likely to go up against is going to be one that is really going to play to the negative aspects. In this letter, he says that he is already testing a few themes and headlines. He says here that the pace of the presidential campaign is picking up and we will soon know who the Democratic nominee will be.

Whoever wins the nomination will have done so by energizing their party's left wing with angry attacks. Republican strategists believe that the candidate he's going to go up against is Dr. Dean. They believe that he is angry, that he is appealing only to the left wing and that they believe that the president can capitalize off this by portraying himself as a positive candidate.

There's another aspect in this letter as well that is very revealing. He says here, "During the course of the campaign I will lay out a positive and hopeful agenda to make our country a stronger, safer and more prosperous for every single person whose fortunate enough to call themselves an American."

Now, this is something that we have heard really the last couple of months over and over. Not just by the president, but also by the secretary of state, as well as defense, saying that Americans are safer than they were two years ago, the time of the September 11 attack. This is something the administration is going to continue to talk about. That and the fact that they believe that the economy is on the upswing - Candy.

CROWLEY: CNN's Suzanne Malveaux, hanging out in Crawford for us this New Year's Day. Thanks, Suzanne.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

CROWLEY: When it comes to sentencing criminals, federal judges don't want Congress telling them exactly what to do. Chief Justice William Rehnquist uses his year-end report to sharply criticize a new law that limits a judge's ability to give lighter sentences than federal guidelines call for. Rehnquist also calls it troubling that Congress is keeping tabs on which judges give lighter sentences. The provisions were sponsored by Republican Congressman Tom Feeney of Florida and supported by Attorney General John Ashcroft.

That's it for INSIDE POLITICS. I'm Candy Crowley. "CROSSFIRE" is next, but first, a look at the headlines.

(NEWS BREAK)

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How will the progress in Iraq affect President Bush's reelection campaign?>


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